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BPM technology is addressing an ever-growing variety of issues.
Business process management (BPM) technology is no longer the preserve of insurance companies, mortgage lenders and other early adopters. "We are seeing uptake in use and benefits in the banking, finance, credit card, healthcare, pharmaceutical, government and discrete manufacturing industry sectors as well," says Gartner analyst Jim Sinur.
Backing up that sentiment, some recent surveys have found evidence of surprisingly high recognition levels among enterprises from a whole raft of sectors. One study, by analyst firm Meta Group, found that 85% of organisations are expected to have a BPM initiative underway by the end of 2003. Another survey, by Delphi Group, was less bullish but it still found that 75% of respondents were planning BPM projects by 2005.
Hot topic
What requirements are driving such rapid market growth? "No matter where you look, the name of the game right now is automation. That is why BPM is becoming such a hot topic,"
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He says that especially big gains are being made when automating the underlying processes that drive the production of commodity goods and services. He points to the example of mortgage lenders that compete largely on price. Automating core business processes does not affect the nature of the product but it does drive down costs significantly, he says.
Given that, it is not surprising to hear some analysts arguing that many early BPM projects have been purely 'tactical'.
But John Connell, chairman and CEO of Staffware, a BPM specialist, disputes this, pointing to several Staffware customers, including a bank that used BPM to streamline mortgage application processing.
"This was not tactical in any sense, because this process is the lifeblood of its business. These are serious applications," he says. "BPM is [capable of] addressing any issue that is process-centric, as opposed to being data-centric. It tackles issues of customer service, user productivity and co-ordination between departments."
Fashion and compliance
There are fashionable issues driving growth too. For one thing, there is a notion that business partners can get much more out of their relationship from BPM without having to engage in expensive and risky mergers and acquisitions.
"Partnerships will replace M&As since BPM software reduces the cost and risk of working with partners," says a CSC research paper. "World-class [business process] components will be new sources of revenue - capabilities that will be provided to customers, complementary businesses, even to competitors. Components that are not world class will be sold or shut down."
Another driver is the avalanche of new regulations cascading over businesses today. "The Sarbanes-Oxley legislation requires that the business processes [of companies listed on US stock markets] are certified to produce financial reports as well as certifying the reports themselves," says Gartner's Sinur. Another raft of regulations that is driving BPM comes in the form of the Basel II accord, under which financial institutions must tackle a wide range of risk-management issues by 2005.
But what can be more fashionable - at any time in business - than cutting costs while increasing value? That is why so many companies are embracing BPM. In the next section, we look at some examples.
