Are Vendors Ignoring Users in Business Process?

So among the many things crossing my Google alerts in the past week is this little gem posted on ZDNet and referring to recent Butler Group research which suggests that Business Process Management vendors are tech-obsessed, creating features at the expense of users needs.
According to the article.

BPM typically allows business professionals to develop operational processes which reflect their business requirements, according to a Butler Group report, with application development, modelling and integration services driving the users' need for the technology.

However, vendors tend to get carried away with technical aspects of BPM rather than responding to users' real needs, Butler Group said: "One worrying issue is that BPM has a history of hooking into the latest and greatest technology wave."

While users focus more on the human interaction angle of BPM, vendors prefer to see the system as a "technology sell" — a standpoint which can negatively affect communication, according to Butler.

No issue with what BPM is and what drives it. However, I am not sure why anyone should be surprised to find that when integration services are potentially an important part of the equation, then vendors might look for more features. The fact that BPM is often a technology sell speaks both to who the buyers are (at least 50% of the time in IT) and maybe more importantly, who is selling it.

When you view the summary of the Butler report, you find that their recommended short list for vendors in the current state of the market includes BEA (soon to be Oracle), Pegasystems, Metastorm, TIBCO, and Software AG. There are many things I could take issue with regardng this leader short list and I can only assume they have a very European centric view of the market, but the reality is that 4-5 of those vendors, if not 5-5 of those vendors are focused on and have built their business on IT driven sales. So the idea that IT vendors selling with an IT slant a particular technology that is also applicable to business people might cause issues with the communication of value of said solution is a surprise why?

The simple reality here is that all these vendors have arrived at the BPM party by trying to come up-stack to include business analyst and senior management related tools like stand alone process modeling, condition logic, business activity monitoring, custom forms, dashboards, etc to capitalize on the growing interest in BPM. This also helps them compete with pure play leaders in the space (Savvion, Appian, Lombardi) who focus more on the business side of the value equation. Core to BPM's rapid growth and success as a category is that the value proposition is easy to understand: rapidly develop process solutions (usually sub 90 days for the first application) which are easy for business users to specify, define, and then manage once implemented. The fact that these solutions help close the gaps between existing legacy applications and work with whatever the organization has in the back office is very compelling to both business and IT. Often the business value and ROI is very high.

Both the article and the research summary also suggest that SOA is a threat to BPM. This is not likely unless a BPM project gets caught up in the wheels of SOA strategy and never gets executed. The reality is that companies who are smart about BPM use the capabilities around modeling and rapid solution development to scope and execute on enterprise wide SOA strategies which deliver both high value in terms of business readiness and lowered cost. That would be a great topic for more research and much more helpful then the suggestion in the article, which is obviously incorrect, that SOA is a new feature of BPM. Yawn. However it does a pose a threat to business value when one of the big platform or IT guys sells BPM as one more thing on the price list while they are trying to sell integration technology or application servers. In that scenario, everyone loses.

Process Management Gone Wild

It took Doug Henschen at Intelligent Enterprise doing a Q&A with Janelle Hill from Gartner on the state of play in the business process management segment, as well as the recent IE Dozen Editors choice awards, to prompt me to make some comments on the state of play in process management.

The Q&A with Janelle was related to Doug's blog commenting on Gartner's BPMS problem. Doug mentions that Gartner has a problem because vendors are upset this may be the last BPMS MQ, a notion that Janelle rejects - at least mostly. It is under review, but Doug comments on the concern of one unnamed vendor that Gartner's concept of a Business Process Platform (BPP) favors the big vendors. Like the ones who sell platforms. Ya think? Doug also notes that the genie is out of the bottle for process vendors, and he is likely right. The game is on and process is now something that is offered by a variety of vendors.

The leaders quadrant for BPMS, in rough order of placement (yes, high and to the right matters)

Pegasystems
Savvion
Lombardi
BEA
Tibco
Metastorm
Global 360
Software AG
Appian
IBM

On the outside of the leader section looking in: Oracle, Adobe, EMC and more. To quote a friend from Texas, this looks like a goat rodeo, and there are a lot of goats. And a couple things that make you go, hmmm.

Among the big headlines for Business Process Management:

First, the category has clearly arrived. BPMS is one of the fastest growing in software, yet what is interesting is how many different types of organizations are spending on capability to make process explicit in their offering and aggressively market it.

Second, the top three players in the space combined for less than $200M in revenue in FY '07. This suggests that not only are they potential acquisition targets, but that the bar to distinguish themselves with innovation has just been raised. Claiming leadership in this market is more difficult now, and the competition punches much harder.

Third, two of the big 4 platform guys are notable by their absence - SAP and Microsoft. SAP gets mention in the report for recognition of the importance of process management and some gaps, especially on the human side, but they are working on it, mostly in the Netweaver end of the house. MSFT is missing in action, but I have heard that the good folks in Redmond are up to something on BPMS. They are also a strong lead feeder to the .Net players in this space like Metastorm.

Finally, can it really be a category when everyone is a leader? Among the concerns here for customers as well as for vendors is the overall criteria and scoring. There are many marked differences among the leading vendors, yet they are hard to discern from the MQ, much less by someone new to the party. This is like when my brother founded the math club in high school and one of the bi-laws was that everyone in the club had the title of president, that way they could submit their college applications with a little something extra. Now think about what happens the next time someone in IT issues an RFP for process management. Goats gone wild.

My guess is that the shelf life of this quad will be about 18 months, much like the last one, and then it will not be renewed. High and right is full, no more leaders please.

One other note from the BPMS Magic Quad. It was published on December 14th by Janelle Hill and Eric Deitert with a couple other analysts. Gartner announced this week that Deitert has left Gartner for a position at Pegasystems, where he was a former employee. Just another thing that makes you go hmmm...

Lucid Predictions for BI in 2008 and Beyond

December means holiday sales, all you can eat football, any excuse for a holiday party, and operating plan reviews. Often this includes a look back at the year and a look ahead. Our good friends at LucidEra added their good cheer and prognostication to the BI market with a press release and blog on what is ahead for BI in 2008. According to team Lucid:

1. SaaS BI will gain market traction. (We assumed this based on Lucid's funding round this year)
2. Innovation will be led by smaller vendors (Hmmm)
3. There will be a shift away from tools to pre-built apps (may not be great for Lucid)
4. Applications that integrate data and improve processes across transactional systems will drive the next wave of SaaS (they are on to something here)
5. A new breed of BI channel partner will emerge (or old partners breed new services and offers)

Full credit to LucidEra for having a point of view and sharing it via multiple channels. I would not be surprised to find they are growing, especially via their Salesforce relationship and focus on applications tied to revenue visibility. Every CEO wants to know, "where is my deal?" so this makes all the sense in the world.

However, if prediction 3 is right, it does not bode well for Lucid and small fry. Now that Cognos, Hyperion and Business Objects have all moved their BI platforms and applications to the P/L statements of larger applications providers, the law of the jungle suggests that unless the small guys deliver a discontinuous innovation with high barrier to entry, the large full stack applications vendors will win early and often.

An entertaining rebuttal to the Lucid top 5 was posted by Seth Grimes in his weblog with Intelligent Enterprise. Seth gives Ken Rudin credit for insight, followed by suggesting that his top 5 list was "mighty solipsistic". Ouch. Like Dennis Miller ouch. (Yeah, I didn't either so I looked it up with my friend Merriam.) Not sure this makes Ken Rudin out to be Bill Parcells, but maybe it explains why LucidEra lists itself in their own customer list. Got to say, I don't think I have seen that one before.

Seth then adds his own list of BI prognostications for 2008:

6. Ever increasing attention to data quality
7. BI integration of streaming and text-extracted data.
8. Location intelligence.
9. Collaborative analytics.
10. Advances in natural-language query and question-answering capabilities, which will all the same remain far from mature.
11. The start of attention to data provenance, reliability, and uncertainty

Generally not bad additions, but I don't know that I buy the idea that data quality is any more important next year than it has been over the last 10. Since Seth points out that his list is not exhaustive, I would like to add a couple highlights not covered in either of the above lists.

12. The intersection of business process with business intelligence and performance management. Gartner suggested in their last BI MQ that combining BI with process management was likely to happen this year. It did with Tibco buying Spotfire as we noted here. Both Forrester and Gartner indicate this is a no-brainer, and Ken's item #4 starts to point this direction, but this is by no means limited to SaaS and is much more about process than data.

It is only a matter of time because process management as a market is projected to be a $6B stand alone market by 2010 by IDC, and it is growing at about 25% CAGR. Looks pretty sexy next to the BI growth numbers, however the BI guys don't have a good solution. Oracle has some notion of integration-centric process management, Business Objects has no actual process management capability but SAP is heading in this direction via Netweaver, Cognos relationship with Lombardi is dead, and SAS appears to be doing barney partnerships with a couple vendors while they try to figure it out. It is coming. Write it down.

13. Open source BI is big and getting bigger. See also JasperSoft and Pentaho. What don't you get about free?

14. Simplicity and ease of use. Somebody commented on this in a response to Seth's blog and is right on point. Why can't my BI portal be as sexy as my fantasy football dashboard and reports? It remains my contention that if everyone could customize their applications, dashboards and reports with everything from their favorite sports team to their Second Life avatar, BI usage would skyrocket.

15. Predictive analytics. This crosses into the process management world as well as complex data mining and modeling. Business Objects just announced a partnership with SPSS as we noted here. If predictive analytics can continue to be simplified and broadly available, things will get interesting.

It seems we could discuss further the intersection of the BI and performance management, but rationalization of overlap in the portfolios of the big vendors will happen naturally over time.

Here's to an exciting 2008!

2008 - All About Process Management

The word of the day is process. The word for 2008 is Process Management. At the most recent Gartner IT Symposium in Orlando, the keynote laid out their 10 strategic technologies for 2008. The strategic technologies were defined as capable of disrupting IT, business or both, requiring strategic investment (Eg: real money), and Gartner is suggesting you don't want to be late or left behind. Check this eweek slide show for the overview. Gartner's top 10.

1. Green IT
2. Unified communications (seems like we have talked about this before)
3. BUSINESS PROCESS MANAGEMENT
4. Metadata management
5. Virtualization 2.0
6. Mash-ups and composite applications
7. Web platform and WOA
8. Computing Fabric
9. Real World Web
10. Social Software

Among the things of note is that business process shows up on the top of the software stack as a must have. Maybe this is response to the Moore's Law effect currently happening to analyst BPM forcasts - the size of supposed market doubles every 18 months according to Forrester, IDC and Gartner. Also interesting that Gartner makes reference to starting with process modeling for all classes of users with the idea that complete process management suites are required to bridge the gap between process as a discipline and whatever is happening in IT regarding SOA.

This topic is likely top of mind for many organizations as they look to unlock the next generation of repeatable performance based on process. Watch this space for more details.

Process is the New BI

Is BI growing up, getting paid up, or maybe just getting passed up? Depends on who you ask, and what seat they occupy. At a minimum, there is activity on all fronts.

BI is all grows up? You know you are a full adult when Microsoft decides you are a real market. All the cycles around Performance Point signal that the Redmond death star is now fully operational and now focused on market share. If you have a market cap like MSFT, everyone not named you in any chosen category has a market cap the size of the resistance organization. They are big, but nobody seems to be going home. In fact, there are multiple pockets of resistance. Do not be surprised if the Redmond BI team enlists the Master Chief, available tomorrow, to counter the resistance. Can't wait to get in on the road show. Other notes of interest...

Item #1, the fact that the upstart is getting press in your father's newspaper. On demand BI with LucidEra is validated in the Wall Street Journal Technology section. Check this article that talks about the value of BI and mentions Cognos, Business Objects and LucidEra. Note to LucidEra - forward the article back to VCs that funded the new round and declare mission accomplished. New money to fund marketing, new WSJ article. You do the math. It took Business Objects about 10 years to get in the Journal. Guess the new guys are on to something.

Item #2. Business Objects and Goldman - Let's make a deal. Are they for sale? If you ask executives at the company, probably not. At least not publicly. However, when someone shows up with an offer, you either take it, or your hire a firm to conduct a process. Just because nobody is shopping does not mean nobody is buying. Do not be surprised if they get bought. By the same token, do not be surprised if nothing happens. I heard a couple times last year that multiple people had it on good authority that Oracle tried to buy BOBJ when the stock was trading in the low 30s. I heard that got punted when Business Objects said the price started at $40 per share. Looks like a good position, especially considering the current cycles. This could go either way this year.

Item #3. Unsolicited offer for SAS. My understanding from a good source is that a player that matters showed up with an offer. The response back from SAS was, "Bidding starts at $20 Billion." $20 Billion?!? 10X+ trailing twelve month revenues? Goodnight indeed. If you spend 20 years building the company in your own image, hold the controlling shares, and live in a hot market, would you sell? File this one under the simulation scenarios you wish you had. My money is on team North Carolina holding firm and staying private.

Item #4. Forrester reminds people that BI needs to get actionable and mentions TIBCO as a thought leader. You have that right, TIBCO runs BI. Boris Evelson and Colin Teubner from Forrester put out a report last week titled, From BPM to Optimization. The subtitle notes that while "BI vendors fiddle while TIBCO burnishes its BPM offering with Spotfire." This is essentially like calling out BI vendors as unfit to parent, much like Brittany Spears. This makes TIBCO out to be K-FED. Nobody has seen them parent, but sometimes proximity wins you points by association. I happened to speak to someone in product management last week from Cognos who indicated that Spotfire was last seen on the street about 20 seconds before TIBCO purchased them. This makes them an excellent candidate for Cold Case, assuming anyone was interested and wanted to tune in to another Law and Order knock off on visualization and analytics purchased by a platform wanna be. Which begs the question, do BPM analysts at Forrester not get BI inquiries, so believe their own press? Or, is the BI market turning into process management market and the BI players are asleep at the switch? Note to Ottawa, Cary and San Jose - check your dashboards!

Regardless of how you score, BI is hot. Looks like we are in for an exciting end of year finish.

The Arrogance of the BI Vendors

Is it arrogance, is it lack of interest, or do they not get it? You might think I am referencing Nic's post below with photo that seems to imply that Microsoft is the evil empire and PerformancePoint Server is the Death Star of BI. This, while plausible, was not where I was going.

I managed to carve out some cycles last week to spend time at OMG's Think Tank on standards for business process management - as in BPM. Not performance management. The think tank was by turns thought provoking and painful, often within a matter of minutes. It is always great to get a bunch of vendors and analysts together on a neutral site and watch the games begin under the guise of "helping the industry." If you want the blow by blow on who was thinking what, I recommend you check out Sandy Kemsley's blog. However, one of the things I found of interest was Colin Teubner's lunch keynote that discussed the relationship between BI and process management.

Colin is an analyst at Forrester Research, focused on business process management. He gave a lunch time keynote focused on BPM with two main discussions - the relationship between process and BI, as well as BPM intersecting with collaboration and information. Both are much longer topics for discussion, but Colin presented some more recent thinking from Forrester on the intersection of process and business intelligence. Colin suggested 5 specific use cases on how the two technologies work together.

1. Business intelligence on a process - analysis and reporting on process applications
2. BI triggering or changing a process - BI kicking off a process
3. BI inside a process decision - when executing a process, BI should help
4. BI to help humans work with process -more information is better to make decisions
5. BI to predict the future of process work - think trend analysis and data mining

Look for this to be a topic of further research from Forrester building on work that was started initially by Keith Gile (Now doing strategy for Business Objects) and Connie Moore, a VP and research director at Forrester. Colin is working on this with a number of contributors. Of particular interest were two of Colin's comments.

The first is that from the Forrester point of view, BI converging with BPM is a no-brainer. I tend to agree on this point and you can see this starting to happen with BPM companies introducing BI capability as core to their offering and partnering with BI vendors. MSFT performance point is also heading in this direction. See also the Spotfire acquisition by Tibco that I commented on when it happened. So what is the hold up?

According to Colin, one of the big issues around this discussion is the arrogance of the BI vendors. He noted that BI vendors should get it, but that they don't understand it well enough and they are too caught up with themselves. He was also specific that none of the top players really offered real process functionality today. This is a very interesting observation, especially when you consider how long BI vendors have been trying to explain their relevance and importance, especially relative to the ERP big guys. Guy commented on this here and here. Seems to be going on 20 years now. Nothing worse than a young adult with a sizable IQ and low self esteem.

Is this arrogance, insecurity, too much navel gazing, or not enough interest to motivate action? Maybe this is just as simple as the devil you know - much easier to deal with than the devil you don't and the associated multiples required.

I think this is an open question and something to watch. This post both catches me up on posting and addresses the open questions to me by my performance partners in crime. Now about this Death Star issue...

Smart Enough Systems - Read All About It

James Taylor and Neil Raden are out today with their new book, Smart (Enough) Systems, a look at the process of decisioning and a detailed overview of the intersection between business rules, process, business intelligence and measurable business impact. Data and technology you have vs. how you run the business everyday and what people use to make decisions.

I had the chance to preview the book and I think Taylor and Raden do a great job of setting up the arguments and then delivering a lively play by play on how to make technology work in the real world. The book is a great read for anyone struggling with how to make the rubber meet the road and providing information that is relevant about making process an operational discipline. Among the things I like about this book is the passion of the authors (the book starts with a manifesto!), as well as the number use cases and examples they come back to. Many books are great at citing examples from big clients, this book does a great job of painting the use case on an industry level that should make it broadly applicable for near term help and longer term reference. It is kind of nice to read a book with a POV, a how-to, and that also happens to be an interesting read.

Both these guys are well known in the industry and their views can readily be found at conferences and in blogs like James on Decisioning on eBizQ, and Neil on BI in Intelligent Enterprise. I am sure their book will be a success. You can purchase it from Amazon here.

As for the blog, I am back from early month vacation and typical end of quarter excitement and ready to provide some much needed balance to the resident performance Guy. Thanks to Guy for all the heavy lifting over the past several weeks.

TIBCO acquires Spotfire - Another One Bites the Dust

This just in from the land of M&A - TIBCO announced its intent to acquire Spotfire, a small BI vendor who positions themselves as next generation BI and analytics. However, this BI acquisition is different for a variety of reasons including who got bought, who did the buying and the fact that this really has less to do with BI and more to do with business process management and platforms. While many people have been writing about the intersection of BI, BPM, BAM and performance management, this time a player in BPM (as in business process) purchased a BI company. This represents one of the first acquisitions in the space and may well change the game for a variety of reasons.

TIBCO positions itself as a leader in BPM, but their focus and background is in integration centric process management. They tried to move up-stack and expand their footprint and relevance with the acquisition of Staffware a couple years ago, but they have had limited success in selling it. Gartner positions them as "process-aware middleware", but market reality is that they are an industrial strength ESB trying to come upstack to position themselves as a BPM player with focus on SOA - much the same aproach as BEA, just without the focus on application servers and aqua anything. They have clearly lacked optimization and analytics, something BPM vendors get very hot and bothered about. Enter Spotfire.

Spotfire positions themselves as the information insight company, and the leader in actionable analytics. They also position themselves as a leader and TIBCO promotes the same. Like most things, this is a function of what angle you look in the mirror. In the Gartner Magic Quadrant for BI Suites, published in January, Spotfire appeared for the first time, but smack in the bottom left quad. Gartner gives them credit as the only new entry in the category and calls out excellence in interactive analysis and in-memory analysis with capabilities for business analysts, not IT. This last piece is critically important to TIBCO and why this acquisition makes sense for all parties. Gartner also docks Spotfire for the things they don't have as a platform to compete in BI. Turns out maybe this is not about BI, especially not for TIBCO.

Among the things Gartner calls out is that Spotfire had limited channel strategy and reach. Joining the TIBCO family and getting access to their resources solves this problem in a big hurry. TIBCO's recognition that Spotfire gives them some sex appeal, solves their optimization gap and gives them something to talk about in analytics helps this make sense. It gives them something else to throw at market leaders like Savvion, Lombardi, and certainly BEA, who they most resemble. At a minimum this keeps things interesting.

A couple other observations:
1. There is not much precedent for infrastructure vendors to come up-stack and get relevant to business audiences in a business context like analytics and business intelligence. TIBCO's prior acquisition of Staffware for human centric process management has not proved to be successful to this audience, so this round either changes fortunes or looks like groundhog day.
2. The hype around optimization and analytics for process management by vendors and analysts just got a $200M validation. Does this signal something bigger?
3. The Gartner MQ for BI notes that the BI industry has now adopted a "process and strategy driven vision of BI." Interesting that the first real play in the space was not a BI company, but an integration focused BPM company putting their money where their website claims they are. Is the reality that BI is a nice add-on to BPM, not the other way around? Is the tail about to wag the dog?
4. The Gartner MQ notes an expectation of "co-mingling" between BI and BPM and calls out TIBCO and BEA by name. How long have these vendors been talking to Gartner about this? Who is next?

Interesting that today BEA announced a miss and the impact was speculation that BEA is next on the block to be acquired by Oracle or HP. Maybe we should be watching for BEA to make a play for a BI vendor. Look for things to get even more interesting.

What’s Hot this Week in BI?

In this week’s review of “what’s hot” I wanted to focus in on BPM, aka Business Process Management a rapidly growing category that fits under the BI umbrella. In 2007 the BPM market exceeded $1 billion and analysts predict an average growth of 24 percent through the year 2011.

What is driving such "hotness" you ask? Today, more than ever technologies are driving a more collaborative work environment and information assets (ie. data organizations are producing) are also growing at a more rapid pace. This relates back to IT searching for ways to optimize their systems to adapt to these changing business conditions, enter SOA (aka Service Oriented Architecture). SOA and BPM go hand in hand as their is a substantial dollar figure tied to an organizations ability to connect their systems to repeatable, streamlined business processes.

What’s the result you ask? Well you can be sure to watch for your favorite BPM vendor get snapped up by one of the larger software players as they look to capitalize on this growth area and build on organizations investments in SOA. Here’s an article that adds some additional color to this topic.