2009 BPM Market State

I
{COVER PAGE}
2009 Transformation & Innovation
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About the Author: Nathaniel Palmer

This report is based on research conducted by Transformation & Innovation in conjunction with BPM Education Associates, BPM.com and the Workflow Management Coalition. Nathaniel Palmer is a Principal and Chief BPM Strategist with SRA International, Inc. [NYSE: SRX] a $1.5 Billion system integrator based in Washington, D.C., where he serves as a leader of the BPM and SOA Practice. He is also Editor-in-Chief of BPM.com, the leading online media outlet focused on business process management, as well as the Executive Director of the Workow Management Coalition, since 1993 the only industry consortium and standards body focused exclusively on business process management. Previously Nathaniel was Director, Business Consulting for Perot Systems Corp [NYSE: PER] and served corporate-wide as a primary subject matter expert and general ombudsman for a variety of global clients on matters of business transformation. Prior to joining Perot Systems, Nathaniel spent over a decade with Delphi Group as Vice President and Chief Analyst, building one of the fastest growing business units and helping lead the transformation of a local IT provider into a global enterprise with offices on five continents. Nathaniel is recognized as a Master of Information Technology and was the first to be awarded the distinction of Laureate in Workflow. He has personally benchmarked and profiled over 200 individual software platforms in the BPM, SOA, Web 2.0 and related fields. He frequently participates in third party verification and validation of software products, as well as serves on a variety of industry juries and judging panels, such as the Annual Global Excellence in Workflow Awards. Nathaniel is the author of several dozen research studies as well as co-author of the criticallyacclaimed management text The X-Economy: Proting from Instant Commerce (Texere, 2001) as well as contributing author to The BPM and Workow Handbook, BPM in Practice, and The Encyclopaedia of Database Systems (Springer, 2009.) He has been featured in numerous media ranging from Fortune to The New York Times, plus over 100 by-lined articles in IT publications such as CIO and InformationWeek. He has also been featured as a guest expert on National Public Radio and World Business Review. Nathaniel led some of industrys first (starting in 1993) and most research initiatives on workflow and business process modeling, as well as designed the industrys first commercial-of-the-shelf methodology and product independent modeling tool, The Workflow Factory. Nathaniel can be reached via email at editor@bpm.com
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Contents
List of Figures .......................................................................................................................... 4 List of Tables ........................................................................................................................... 5 BPM Adoption and Usage ........................................................................................................ 7 Section 1: Current Issues with BPM ....................................................................................... 14 Section 2: Role of the CoE/PMO ............................................................................................ 21 Section 3: Approach to BPMS................................................................................................ 31 Section 4: Investment Appraisal and BPMS ........................................................................... 44
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List of Figures
Figure 1: Regional Distribution.........................................................................................................................8 Figure 2: Company Size ...................................................................................................................................9 Figure 3: Industrial Sector ..............................................................................................................................10 Figure 4: Respondent Role in BPM ...............................................................................................................12 Figure 5: Respondent Role in Organization..................................................................................................13 Figure 6: Previous Involvement with BPM ....................................................................................................15 Figure 7: Previous Experience and Current Role with BPM ........................................................................16 Figure 7A: Number of Initiatives.....................................................................................................................18 Figure 8: Current Usage of BPM....................................................................................................................19 Figure 9: Approach to BPM Centre of Excellence ........................................................................................20 Figure 10: Role of IT in CoE...........................................................................................................................22 Figure 11: Staffing Composition of CoE ........................................................................................................23 Figure 12: Setup of CoE .................................................................................................................................24 Figure 13: Reporting Lines for CoE ...............................................................................................................25 Figure 14: Focus of CoE.................................................................................................................................26 Figure 15: Business Role of CoE...................................................................................................................27 Figure 16: Adoption of Popular Methodologies.............................................................................................28 Figure 17: Adoption of Less-Popular Methodologies ...................................................................................29 Figure 18: Current Experience with BPMS ...................................................................................................32 Figure 19: Correlation Between CoE and BPMS Adoption..........................................................................33 Figure 20: Expenditure of BPM (to date).......................................................................................................34 Figure 21: Current Focus of BPM ..................................................................................................................35 Figure 22: Allocation of Time within BPMS Activities ...................................................................................36 Figure 23: Allocation of Expenditure to Support BPMS ...............................................................................37 Figure 24: Allocation of Expenditure to Support BPMS, CoE Implemented ...............................................38 Figure 25: Composition of BPMS teams .......................................................................................................39 Figure 26: Composition of BPMS Teams, CoE Established........................................................................40 Figure 27: Methodology Used to Support BPM ............................................................................................41 Figure 28: Methodology Used to Support BPM vs. Approach to CoE ........................................................42 Figure 29: Degree of Success in Using BPM................................................................................................43 Figure 30: Investment Appraisal of BPMS ....................................................................................................45 Figure 31: Investment Appraisal of BPMS vs. Approach to CoE ................................................................46 Figure 32: Time Period for Return on Investment ........................................................................................47 Figure 32A: Time Period for Return on Investment and Approach to CoE.................................................48 Figure 33: Actual Rate of Return ...................................................................................................................49 Figure 33A: Actual Rate of Return and Approach to CoE............................................................................50 Figure 34: Actual Rate of Return and Project Length ..................................................................................51 Figure 35: Method Used to Evaluate ROI .....................................................................................................52 Figure 36: Expected ROI Period ....................................................................................................................53 Figure 36A: Expected ROI Period Compared to CoE Approach.................................................................54 Figure 37: Average Future BPMS Expenditure Pattern ...............................................................................56 Figure 38: Top Priority for BPM Software .....................................................................................................57 Figure 39: Source of Funding for BPMS .......................................................................................................58 Figure 40: Success Metrics for BPMS...........................................................................................................59 Figure 40A: Success Metrics for BPMS and Approach to CoE...................................................................60 Figure 41: Focus for Future BPMS ................................................................................................................61 Figure 42: Preferred Pricing Model for BPM Investment .............................................................................62 Figure 43: Future BPM Development Environment......................................................................................63 Figure 44: Reasons for not investing in BPMS Software .............................................................................64 Figure 45: Consideration of Open Source Software.....................................................................................65 Figure 46: Effect of downturn on approach to IT suppliers ..........................................................................66 Figure 47: Market Mindshare Leading BPM Software Brands .................................................................68
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List of Tables
Table 1: Distribution of Company Size by Region ..........................................................................................9 Table 2: Distribution of Industrial Sector by Region .....................................................................................10 Table 3: Distribution of Industrial Sector by Organizational Size ................................................................11 Table 4: Organizational Role and Role in respect to BPM ..........................................................................13 Table 5: Organizational Role and Previous Experience of BPM .................................................................16 Table 6: Single Greatest Benefit of BPM ......................................................................................................17 Table 7: Number of Initiatives ........................................................................................................................18 Table 8: Title of Centre of Excellence............................................................................................................20 Table 11: Correlation between future financial expectations and past performance .................................54 Table 13: Different Approaches to supplier selection strategy? ..................................................................67
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Introduction
This survey explores current practices within all organizations and government agencies, regarding business process management, process Modeling and re-engineering. In total approximately 500 respondents spanning a range of countries, industrial sector and company size completed the survey. Responses were individually validated and scrubbed of BPM vendors or any obvious bogus answers. This version of the report presents the early results and initial analysis, including various cross-tabulations and examinations for statistical significance. Additional commentary regarding the interpretation of these findings may be released later this year.
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BPM Adoption and Usage
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FIGURE 1: REGIONAL DISTRIBUTION
S America, 11.58%
Africa/Middle East, 4.21%
Asia/Oceania, 18.95%
N America, 32.11% Europe, 33.16%
Source: Transformation & Innovation
The majority of the respondents were based in either Europe or North America and cover almost 60 individual countries (of which the United States was the single most common.)
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FIGURE 2: COMPANY SIZE
2-99, 18.95%
> 5000, 33.68%
100-500, 15.79% 500-1000, 10.53% 1000-2500, 12.11% 2500-5000, 8.95%
Roughly one-third of the respondents worked for firms with more than 5000 employees but equally one-third worked for firms with between 2 and 500 employees. When company size and region are compared, in the main the spread is reasonably consistent except that very large firms are overly represented in the Africa/Middle East sample and smaller firms particularly common in Europe and South America. Overall those two regions show a very similar distribution by company size as: Table 1: Distribution of Company Size by Region
How Many Individuals are Employed in TOTAL at Your Organization? 25001000> 5000 5000 2500 500-1000 100-500 2-99 62.50% 12.50% 0.00% 0.00% 0.00% 25.00% 33.33% 11.11% 8.33% 19.44% 11.11% 16.67% 28.57% 4.76% 12.70% 7.94% 23.81% 22.22% 37.70% 13.11% 11.48% 11.48% 11.48% 14.75% 27.27% 4.55% 22.73% 4.55% 18.18% 22.73% 33.68% 8.95% 12.11% 10.53% 15.79% 18.95%
Region Africa/Middle East Asia/Oceania Europe N America S America Grand Total
Grand Total 100.00% 100.00% 100.00% 100.00% 100.00% 100.00%
The respondents are spread across a range of industrial sectors, with the majority in the IT sector or financial services, shown in Figure 3.
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FIGURE 3: INDUSTRIAL SECTOR
Manufacturing, 14.74%
Utility, 4.74%
Financial Services, 25.79%
IT, 38.42%
Government, 16.32%
These firms are divided globally as: Table 2: Distribution of Industrial Sector by Region
Region Africa/Middle East Asia/Oceania Europe N America S America Grand Total Financial Services 38% 33% 24% 28% 9% 26% Government 38% 11% 16% 15% 23% 16% IT 25% 44% 43% 28% 50% 38% MFG 0% 8% 16% 20% 14% 15% Utility 0% 3% 2% 10% 5% 5% Grand Total 100% 100% 100% 100% 100% 100%
Again, broadly the distribution is fairly even although Financial Services and Government are over-represented in Africa and the Middle East whilst IT firms constitute over 50% of the respondents from South and Central America.
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In turn, it is possible to compare sector and organizational size. In this case for simplicity, large firms are those with other 2500 employees, medium firms have between 501 and 2500 employees and small firms are those with between 2 and 500. The distribution is: Table 3: Distribution of Industrial Sector by Organizational Size
Company Size: Large Medium Small Grand Total Financial Services 32.10% 23.26% 19.70% 25.79% Government 13.58% 25.58% 13.64% 16.32% IT 38.27% 25.58% 46.97% 38.42% MFG 9.88% 18.60% 18.18% 14.74% Utility 6.17% 6.98% 1.52% 4.74% Grand Total 100.00% 100.00% 100.00% 100.00%
In this case, the only significant exception to the normal distribution is that, on the whole, IT firms tend to smaller than other respondents. Finally, those completing the survey were asked to indicate both their own role in the company and their involvement in BPM.
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FIGURE 4: RESPONDENT ROLE IN BPM

35.00% 30.00% 25.00% 20.00% 15.00% 10.00% 5.00% 0.00%
Outside Consultant/Supplier
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30.48%
32.10%
12.24% 6.70% 3.46%

Internal Adviser Financial Sponsor of Initiative
10.85% 4.16%
End User
Define Business Requirements
Design IT Specification
Overall, most of the respondents were actively involved in BPM either as defining the business requirements (30%) or in designing the IT specification (32%). It is also notable that approximately12% indicated they serve in an internal practitioner capacity -- a role similar to an external consultant but were they are already employed by the firm.
None
FIGURE 5: RESPONDENT ROLE IN ORGANIZATION

60.00% 50.00% 40.00% 30.00% 20.00% 10.00% 0.00%
35.79% 11.05% 14.21% 1.05%
37.89%
HR Manager or Human Performance Practitioner
Executive (CEO, COO, CFO)
IT Manager/IT Developer
Again, the majority of the respondents indicated that their overall corporate role was as either IT manager or in terms of Process and Business Analysis. When the two attributes are compared, some interesting information emerges which re-appear throughout this survey. Table 4: Organizational Role and Role in respect to BPM
Which of the Following Best Describes Your Job Function? (Choose one) Executive (CEO, COO, CFO) Line of Business Manager HR Manager or HR Practitioner IT Manager/IT Developer Process /Business Analyst Define Business Requirements 19.05% 55.56% 100.00% 19.70% 44.29% Design IT Specification 14.29% 3.70% 0.00% 62.12% 14.29% Financial Sponsor of Initiative 28.57% 3.70% 0.00% 1.52% 0.00% Internal Adviser 38.10% 25.93% 0.00% 15.15% 40.00%
End User 0.00% 11.11% 0.00% 1.52% 1.43%
Thus most of the CEO respondents see themselves as financial sponsors or in terms of defining the business requirements. None report themselves as end users and, overall, very few respondents saw themselves in this role. To explore this, respondents were asked a series of questions around their own experience, the type of initiatives currently in use, the benefits so far from BPM and how (if at all) they are using the approach of a BPM centre of achievement.
Process Practitioner/Busines s Analyst

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Business or Line of Business Manager
2009 BPM Market Report
Section 1: Current Approach to BPM
Section 1: Current Issues with BPM
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FIGURE 6: PREVIOUS INVOLVEMENT WITH BPM
Neither participated or observed, 14.78% Observed, 19.63% Directly participated, 65.59%
Overwhelmingly (almost 66%) the respondents indicated direct personal involvement with BPM and a further 20% have observed a previous implementation.
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FIGURE 7: PREVIOUS EXPERIENCE AND CURRENT ROLE WITH BPM

Outside Consultant/Supplier Internal Adviser Financial Sponsor of Initiative End User Design IT Specification Define Business Requirements 0% 10% 53% 59% 67% 70% 20% 30% 40% 50% 60% 60% 77% 33% 28% 19% 14% 28% 13% 21% 13% 14% 14% 15% 2% Directly participated Observed Neither participated or observed
70% 80% 90% 100%
When this degree of previous involvement is compared to the identified current role it becomes clear that a substantive number of those who are financially sponsoring BPM have had little or no previous practical experience. Thus 46% of financial sponsors have either never had any previous engagement (13%) or have only observed (33%). By contrast those most closely involved in specifying the Business requirements, or the IT specification, or to have been engaged as outside consultants, are also very likely to have had previous direct experience. Finally it is also possible to relate overall organizational role to previous direct experience with BPM. The spread is interesting, but the emphasis is that those with a senior managerial role or a business analyst background are more likely to have previous experience of BPM than those from a technical IT background. Table 5: Organizational Role and Previous Experience of BPM
Directly Participated 67% 81% 50% 59% 74% 66% Observed 33% 19% 0% 28% 13% 20% Neither Participated or Observed 0% 0% 50% 13% 14% 15% Grand Total 100% 100% 100% 100% 100% 100%
Line of Business Manager Executive (CEO, COO, CFO) HR Manager or Human Performance Practitioner IT Developer Business Analyst Grand Total
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Respondents were asked to indicate what had been their firms single greatest benefit from using BPM to date: Table 6: Single Greatest Benefit of BPM
Which of the Following Would You Rate As the Single Greatest Benefit of Any BPM Software You Are Using? Ability to Visualize, Simulate, and Trouble-Shoot Business Processes Analytical Reporting and Business Performance Management Automation of Standard Procedures and Processes Change Business Rules and Processes Without Impacting Underlying Applications Enforce Best Practices and Required Procedures Ensure Accurate and Consistent Data Entry or Document Creation Manage and Monitoring the Performance of Operations and Personnel Standardize Interchange of Process Models Total 19% 7% 28% 17% 10% 4% 11% 3%
Thus the majority (28%) had had previous success in using BPM to automate their standard procedures and a sizeable number (17%) had used it to change their operating procedures without having to change their core software systems. A further 19% report that BPM had been used successfully to clarify and resolve existing problems. Relatively few identified either standardisation or accuracy in terms of data entry. In terms of current usage of BPM, respondents were asked to indicate which of the following applied to their organization:
Enterprise Architecture Initiative Focused on Existing Systems and Infrastructure Re-Engineering Program Involving Modeling Processes Benchmarking Initiative Aimed At Measuring Organization Performance Re-Engineering Program Involving Redesigning A Major Business Process Automation Of Business Processes Via BPM Software Management Of Business Processes Via ERP Or Similar Enterprise Applications System Or Infrastructure Modernization Involving Service-Oriented Architecture (SOA)
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FIGURE 7A: NUMBER OF INITIATIVES
Each respondent could indicate more than one and while the largest number (almost 45%) indicated they were pursuing just one at the moment around 12% were involved in five or more categories.
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FIGURE 8: CURRENT USAGE OF BPM
Benchmarking Initiative Management Of Business Processes Enterprise Architecture Initiative Major Business Process Service-Oriented Architecture (SOA) Re-Engineering Program Automation Of Business Processes
18% 28% 32% 33% 36% 38% 55%
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
Of the options, at the moment most firms are engaged in automation of existing business processes (55%). However, overall re-engineering is the most popular current usage, either for a major business process (32%) or a Modeling process (38%). Relatively few respondents (18%) are currently using BPM for benchmarking.
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FIGURE 9: APPROACH TO BPM CENTRE OF EXCELLENCE
No Plans Already have a Centre of Excellence Long term consulting arrangement Already created a team As Soon as Possible 0% 5% 10% 15% 20% 25% 30% 12% 15% 29%
32%
32% 35% 40% 45% 50%
Finally, respondents were asked to indicate the status of a BPM Centers of Excellence (or equivalent group) focused on either BPM, Re-Engineering, or Enterprise Architecture. They could select as many of the following as were appropriate:
Our Goal is to Create a Business Process or BPM Center of Excellence as Soon as Possible We Have Identified and Defined a Specific Internal Team Tasked With Providing Business Process Optimization Services We Have a Long-Term Consulting Relationship Providing Onsite Business Process Services We Have Successfully Implemented an Internal Center of Excellence Do Not Have Plans for a Formalized CoE or PMO Type Group for BPM
In this case, very few indicated more than one approach (82% indicated they were pursuing a single model). Only 12% respondents have set an existing Centre of Excellence although a further 29% have a specific internal team dealing with BPM. Different Organizations give their Centre of Excellence different titles as: Table 8: Title of Centre of Excellence
Title We Call it a "Program Management Office" We Indeed Officially Call it a "Center of Excellence" We Call it Neither CoE or PMO But Something Else Total 36.84% 38.76% 24.40%
Most of those who indicated a different title tended to describe it as a Business Process Unit or Process Analysis/Office. The next section looks at the role and structure of the CoE/PMO in more detail.
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Section 2: Role of CoE/PMO
Section 2: Role of the CoE/PMO
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FIGURE 10: ROLE OF IT IN COE

100% IT and IT Leadership, 17%
0% IT , 10% Less Than 50% IT, 19%
50% IT / 50% Business Program Management, 53%
As set out in figure 9, over 40% of the respondents have already set up either a CoE or have a dedicated team in place and a further 32% intend to do so in the near future. In terms of direction and input into a CoE/PMO, over 50% of respondents indicated this was made up fairly equally of IT and BPM.
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FIGURE 11: STAFFING COMPOSITION OF COE
52% New Area of the Organization involving New Hires 25% New Area Composed Entirely or Mostly of Existing Staff Rebranding of Existing Unit With No Impact on Staff
23%
Those who indicated 0% IT involvement described this as no involvement by IT other than support roles, as with any business area. The majority also indicated that even if the office was new, the majority of the staff had been employed elsewhere in the organization before. Only 25% reported the need to have hired a considerable number of new staff.
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FIGURE 12: SETUP OF COE
Setup By Specialized BPM or Re-engineering Firm
8%
Setup By Management Consulting Firm (non-IT) Setup By Internal Team (following external methods but not using external staff)
11%
71%
Setup By a Third Party IT Services Firm 0%
10% 10% 20% 30% 40% 50% 60% 70% 80%

In many cases, this usage of internal staff reflects how the office was originally set up, with over 70% reporting the CoE had been created by internal staff.
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FIGURE 13: REPORTING LINES FOR COE
Reporting is up through the CIO Reporting is up through the CFO Reporting is up through the CEO Reporting is to Another Area 0.00% 5.00% 10.00 %
38.94%
8.65%
36.06%
16.35% 15.00 % 20.00 % 25.00 30.00 35.00 40.00 45.00 % Source: % Transformation % % & Innovation %
The reporting lines for the CoE were varied but in almost 75% of cases this was to the CEO or CIO. For those who indicated another area the most common structure was reporting to the COO or a similar function.
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FIGURE 14: FOCUS OF COE
Only Focused on Business Process Reengineering and Improvement
27%
Focused on Multiple Areas of IT (not limited to BPM/BPMS)
27%
Focused on Full Spectrum of BPR/BPA/BPM/BPMS Implementation
46%
0% 5% 10% 15% 20% 25% 30% 35% 40% 45% 50%
In most instances the CoE has a wide focus across the organization.
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FIGURE 15: BUSINESS ROLE OF COE
Specialized Team Focused on Specific Number of Discrete Projects
40%
Professional Services Team Focused on External Customers
21%
Internal Service Center Designed as an Internal Consulting Resource
39%
0% 5% 10% 15% 20% 25% 30% 35% 40% 45%
The great majority of respondents were using their CoE to focus on internal issues and problems: Next Respondents were asked to indicate what software or formal approaches were used by their CoE. The options included: ISO 9004:2000 ISO 15504-4: 200 QFD Kaizen Zero Defect Program Six Sigma PDCA Taguchi Lean Manufacturing Kansei Engineering TQM (Total Quality Management) TRIZ Balance Scorecard ARIS Six Sigma Lean Six Sigma BusinessGenetics/eXtended Business Modeling Language (xBML) Standard CMMI Appraisal Method for Process Improvement (SCAMPISM) Agile Development
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FIGURE 16: ADOPTION OF POPULAR METHODOLOGIES

TQM (Total Quality Management) Standard CMMI Appraisal Method Six Sigma Six Sigma ISO 9004:2000 Lean Six Sigma Kaizen Balance Scorecard ARIS Agile Development 0% 14% 23% 10% 20% 8% 11% 15% 15% 14% 11% 19% 16% 27% 12% 26% 30% 40% 50% 60% 24% 18% 20% 22% 14% 10% 28% Other Approach Established CoE
The figure above shows the adoption across the categories of the most popular tools and methods identified as used by more than 10% of respondents. Each respondent could indicate that they used more than one approach. The most popular group of processes were the various variants of Six Sigma that were used by 48% of respondents who had some approach to a CoE and 64% of those who had already established a CoE. Beyond this Balanced Scorecard was used by 27% and 24% respectively. Overall those respondents with a CoE were more likely to also use more individual approaches than those using a different approach (or at a different stage of their development). Those with a CoE reported that on average they used 2.1 different approaches and those with a different approach (or in the process of setting up a CoE) used an average of 1.8 approaches.
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FIGURE 17: ADOPTION OF LESS-POPULAR METHODOLOGIES

Zero Defect Program TRIZ Taguchi QFD PDCA Lean Manufacturing Kansei Engineering ISO 15504-4: 200 BusinessGenetics/(xBML) 0% 2% 1% 0% 4% 6% 4% 6% 8% 4% 8% 10% 12% 14% 16% 6% 3% 1% 0% 1% 3% 7% 2% 4% 6% 8% 4%
Other Ap
Establis
If the slightly higher rate of adoption of individual processes is controlled for then there is no significant difference between the two groups (T=0.04, critical value=0.48, df=18).
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Organizations with a CoE also use a variety of tools to support the work of the unit. They were asked to identify what use they made of the following approaches: EA Tools (System Architect, Telelogic, etc) Enterprise Portal (SharePoint, Plumtree, etc) Process Modeling Tools BPM Suite (separate from above) Repository Manager (Enterprise Elements, etc) Project Management Other Tools Specific to CoE
In each case a wide variety of different software approaches were identified. This was particularly the case for EA tools (were System Architect, the single most popular choice was only used in 18% of cases), BPM (where IBM with under 10% and Tibco with just over 5% were the most popular) and for Process Modeling tools (where the wider Visio suite was used by just under 16%). The Enterprise Portal area was dominated by Sharepoint (over 68% indicated they used one version or another), and the most popular Repository Manager approach was supplied by Oracle (just over 20%). The most common source for other tools was internally written procedures (20%) and, in general, internally developed software was a common solution for every category.
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Section 3: Approach to BPMS
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FIGURE 18: CURRENT EXPERIENCE WITH BPMS

6% We Have Current Experience Implementing Business Process Management 40% We Plan to Implement a BPMS or BPM Intiative We have No Current or Future BPM/BPMS Plans
55%
The majority of the respondents (55%) indicated they had current experience in implementing BPMS.
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FIGURE 19: CORRELATION BETWEEN COE AND BPMS ADOPTION
All Consulting Relationship Internal Team Have CoE asap Have CoE 0%
55% 54% 47% 53% 71% 20% 40% 60%
40% 42% 46% 42% 24% 80%
6% 4% Current Experience 7% 4% 5% 100% Plan to Implement No Current Plans
Perhaps not surprisingly the current experience is related to the approach used in respect of a CoE model (i.e., formally to do it this way, or have adopted a variant).
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FIGURE 20: EXPENDITURE OF BPM (TO DATE)

100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0%
No th in g
28%
20%
30%
17% 41% 19% 41% 52% 42% 17% 50%

Business Process Services
33%
47%
34%
12% 36%
21% 67% 37%
0% 50%
BPM Training BPM Software
39%
33%
36%
< $1 $1 00 01 ,0 ,0 00 00 -$ $2 25 51 0, 00 ,0 00 0 -$ $5 50 01 0, ,0 00 00 0 -$ $1 1 ,0 ,0 01 00 ,0 ,0 00 00 -$ $2 2, ,5 50 00 0, ,0 00 00 0 -$ 5, 00 0, 00 0 > $5 ,0 00 ,0 00
($ 0)
Business Process Services BPM Training and Methods BPM Software
So quite clearly (and not surprisingly) those organizations that have an established CoE are also those most likely to have current experience of BPMS implementation. In general, almost all the organizations with a firm commitment in this field have some experience or plans to implement BPMS. Expenditure so far on BPMS varies quite considerably. Most commonly respondents indicated that they had spent (to date) up to $250,000 on BPM specifically on one or more of: BPM Software; BPM Training and Methods; and, Business Process Services. However a number of respondents indicated they had spent over $1bn and this was most often connected with expenditure on software.
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FIGURE 21: CURRENT FOCUS OF BPM

Supply Chain or Other Logistics Sales and Marketing Risk Management R&D Order Entry or Billing Manufacturing/Fulfillment IT/MIS (i.e., Services Management) Human Resources General Administration Customer Service Compliance Management Back Office Operations 0% 10% 21% 49% 20% 30% 40% 50% 38% 45% 52% 22% 25% 60% 70% 80% 18% 17% 31% 26% 56% 21% 29% 22% 56% 26% 90% 100% 19% 17% 41% 26% 26% 22% 38% 23% 22% 30% 55% 26% 29% 22% 58% 61% 39% Current Planned No Plans 49% 40%
Most commonly, respondents are currently applying BPM to their IT services (56%), general admin support (46%), Back Office Operations (49%) and customer service (52%)
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FIGURE 22: ALLOCATION OF TIME WITHIN BPMS ACTIVITIES
User Orientation and Change Management Design and Development of Report Screens Design and Implementation of Integration Logic Translation of Process Models to Software/Object Models Optimization of Process and Business Logic Discovery and Analysis of Processes and Business Rules Tool Selection and Procurement Project Scope and Requirements Development
10% 10% 13% 10% 11% 19% 10% 17% 0% 2% 4% 6% 8% 10 12 14 16 18 20 % % % % %& Innovation % Source: Transformation
The respondents indicated that they were allocating time to the following areas of BPMS: Project Scope and Requirements Development Tool Selection and Procurement Discovery and Analysis of Processes and Business Rules Optimization of Process and Business Logic Translation of Process Models to Software/Object Models Design and Implementation of Integration Logic Design and Development of Report Screens User Orientation and Change Management
The greatest current commitment of time is in respect of project scope (17%) and the discovery analysis of processes and business rules (19%).
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FIGURE 23: ALLOCATION OF EXPENDITURE TO SUPPORT BPMS
Training and Change Management Services Deployment, Integration, and Customization Services New Hardware Software License Process Analysis and/or Requirements Analysis 0% 5% 10%
15% 23% 13% 21% 29% 15% 20% 25% 30% 35%
Process analysis and capturing project or systems requirements emerged as the main areas of both activity and expenditure. Given the historic importance of expenditure on software (see previous figure) it is perhaps surprising to see that software licences are only absorbing around 20% of all expenditure.
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FIGURE 24: ALLOCATION OF EXPENDITURE TO SUPPORT BPMS, COE IMPLEMENTED
Training and Change Management Services Deployment, Integration, and Customization Services New Hardware Software License Process Analysis and/or Requirements Analysis 0% 5% 10% 10%
14% 26%
21% 27% 15% 20% 25% 30%
The pattern of expenditure where a CoE model had already been introduced is shown above. Although the differences are relatively small, nonetheless, those firms with an established CoE were able to spend more on the deployment, integration and customization of services (26% against 23%) and notably less on new hardware (10% against 13%) presumably as these costs have been met earlier in the development cycle.
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FIGURE 25: COMPOSITION OF BPMS TEAMS

Other Roles Outside Technical Staff Outside Process Consultants EAI Architects QA or Testing Roles Application Architects/Programmers Business Process Modelers Security Analysts Solution Architects Enterprise Architects End Users Line-of-Business or Program Managers Domain Experts Project Managers 60% 68% 66% 82% 78% 86% 92% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100 % Source: Transformation & Innovation 28% 46% 55% 55% 72% 76% 77%
Thus of those who reported a structured approach to BPMS, 92% included Project Managers in their BPMS implementation teams. Clearly membership is most likely to include Project Managers, Domain Experts and Subject Specialists, End Users, Line Managers, Business Process Modellers and Application Architects (all involved in 75% or more of such teams).
Page 39 of 68
FIGURE 26: COMPOSITION OF BPMS TEAMS, COE ESTABLISHED

Other Roles Outside Technical Staff Outside Process Consultants EAI Architects QA or Testing Roles Application Architects/Programmers Business Process Modelers Security Analysts Solution Architects Enterprise Architects End Users Line-of-Business or Program Managers Domain Experts Project Managers 55% 75% 77% 83% 83% 92% 92% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100 % Source: Transformation & Innovation 67% 92% 92% 0% 42% 42% 85%
What is interesting when the responses for those organizations with an established CoE are separated out is the much more uniform nature of the responses. Effectively a fairly standard staffing group of Project Managers, Domain Experts, Business Process Modellers and Application Architects are drawn together and supplemented by other staff as needed. Also, whilst the usage of external technical staff is similar (42% in each case), there is a lower usage of external consultants where a CoE has already been established. Respondents were then asked to identify the Role Played by Internal Methodology and Formalized Methods In Your BP Programs and BPM Implementations.
Page 40 of 68
FIGURE 27: METHODOLOGY USED TO SUPPORT BPM
11%
22%
Trained in a Specific Set of Methods and Continues to Use Those Today Standardized on an InternallyDeveloped Set of Methods Used by all Internal Practitioners Use a Variety of Informal Tools and No Single/Specific Methodology Use Third-Party Tools and Methodology
44%
23%
Thus overall, respondents are actually fairly evenly split between those who are pragmatic in their approach (44%) as opposed to those who tend to use similar methods in each instance (45% combined). Again, the approach to the structure of their CoE has some impact on this:
Page 41 of 68
FIGURE 28: METHODOLOGY USED TO SUPPORT BPM VS. APPROACH TO COE
Developing CoE Consulting Arrangement Internal Team CoE All 0%
20% 33% 30% 31% 22%
17% 28%
47% 22%
17% Specific Set of Methods 17% 20% 7% 8% 11% 80% 100%

43% 62% 23% 40% 44% 60%
Standardized on an InternallyDeveloped Set of Methods Variety of Informal Tools Use Third-Party Tools and Methodology
20%
Again, as with the evidence in Figure 27, what is clear is that those organizations with a CoE already in place tend to use very similar approaches to BPMS implementation. In this case, overwhelmingly, they rely on the use of a standard set of internally developed methods (62%) and most of the others rely on a set of specific methods that were implemented following external training (31%). What is quite interesting is that it is those organizations that are seeking to implement the CoE model that are most likely to be using informal, ad-hoc approaches or rely on third party tools and methodologies. What is not clear is whether this is due to a temporary experimental phase or if the desire to move to a structured CoE is actually an attempt to reduce this diversity of approach. Although excluded from figure 28, those organizations with no plans to move to a structured approach are even more likely to be using ad-hoc approaches (62%). Finally, respondents were asked to summarise their success to date with BPM. To do this they were asked to indicate their agreement with the following statements: We Have Found Little to No Success With BP and BPM Initiatives, and Have Not Received Much Executive Support as a Result We Had Initially Encountered Significant Challenges but Have Since Found Success We Have Found Discrete or Departmental Success, but Not Widespread Results We Have Successfully Leveraged Early Success Stories and Have Translated This Into a Repeatable Business Process Improvement Capacity
Page 42 of 68
FIGURE 29: DEGREE OF SUCCESS IN USING BPM

No Plans for CoE Developing CoE Consulting 4% Arrangement Internal Team 3% CoE 4% 17% All 16% 0% 20%
33% 23% 38% 42% 32%
37% 23% 30% 28% 39% 32% 40% 26% 60%
15%
15% Little to No Success 23%
30% 28% 39% 26% 80% 100%
Initially Encountered Significant Challenges Discrete or Departmental Success, but Not Widespread Results Successfully Leveraged Early Success Stories
Here again there is a clear correlation between implementation of a CoE and the level of reported success in BPM implementation. Almost 80% of the organizations with a CoE report some degree of success. Whilst those who use an internal team or rely on an external consulting arrangement have rarely had no success they also consistently report that there were significant early difficulties in BPM implementation. Again, the position of those seeking to implement a CoE methodology stands out. They report considerable problems with early set backs (almost 55%) but are obviously committed to BPM as a model. Those organizations that have reported no plans for a CoE style approach also report an even higher rate of early set backs (70%) and presumably have stepped back from their commitment to BPM as a consequence.
Page 43 of 68
Section 4: Investment Appraisal and BPMS
Page 44 of 68
FIGURE 30: INVESTMENT APPRAISAL OF BPMS
ROI Analysis is Done Periodically as Part of an Ongoing Assessment 8% 11% 11% ROI was Analyzed After the Initial Pilot ROI was Analyzed in Advance as Part of Project Planning and Cost Justification 32% ROI was not Analyzed for the Project ROI was/will be Analyzed Upon Final Rollout
37%
The respondents were then asked a series of questions as to their investment appraisal of BPMS, how this was calculated and over what time span. Thus, around 43% of respondents reported carrying out ROI either before starting or at the end of a pilot phase. However, 37% indicated they had not carried out any Return on Investment Analysis and a further 11% intend to do this once the project is implemented.
Page 45 of 68
FIGURE 31: INVESTMENT APPRAISAL OF BPMS VS. APPROACH TO COE
5% 26% No Plans for CoE 8% Developing CoE 9% 22% Consulting Arrangement 11% 21% Internal Team CoE 16% 13% 20% 27% 32% 40% 28% 42% 38%
54% 31%
8% 9%
ROI Analysis is Done Periodically ROI was Analyzed After the Initial Pilot ROI was Analyzed in Advance ROI was not Analyzed for the Project ROI was/will be Analyzed Upon Final Rollout
16% 11% 22% 13% 40% 37% 7% 7% 8%
All 11%11% 0% 20%
60%
80% 100%
Again, as is perhaps to be expected, it is those firms who take a structured approach to BPMS who are also the most likely to undertake ROI either before or at the end of the pilot phase. This covered between 63% and 67% of those who either had established a CoE or had a long term consulting arrangement. Those organizations with no plans to introduce a CoE were particularly likely to either not carry out ROI (54%) or to plan to do so at the end of the project (8%). [Nathaniel the following section {figs 32-34} comes out of breaking the question Please Identify the Measured Financial Benefit Was Generated as a Result of the BPM Initiative, For Example "payback in 18 months" or "33% positive ROI in year 2": into 3 sub-sections, time, rate of return and measure, and also doing a comparison to the v limited data on original targets suggest not using this as so few responses and even fewer actually match up to how success has been measured this really becomes useful when you get to table 11 a couple of pages on} Of those who used ROI, or another financial measure, the final rates of return varied substantively, as: Respondents were then asked to identify the financial benefit they received from the BPM initiative. Most expressed this in terms of ROI but a number of other measures such as IRR and cost savings were also identified. Most respondents suggested that the initiative had run for two years or less (80%) as:
Page 46 of 68
FIGURE 32: TIME PERIOD FOR RETURN ON INVESTMENT
3 years, 14%
5 years, 3% 4 years, 3%
< 1 year, 13%
2 years, 23% 1-2 years, 13%
1 year, 32%
The time period of return on investment shows some variation depending on what approach the company has taken to setting up (or not) an internal Centre of Excellence.
Page 47 of 68
FIGURE 32A: TIME PERIOD FOR RETURN ON INVESTMENT AND APPROACH TO COE
No Plans
13%
19%
6%
25%
31%
6% 0%
Plan to set up CoE
7%
29%
29%
21%
0% 7%
7%
< 1 year 1 year 1-2 years
Similar Approach
7%
21%
21%
36%
14%
0%
2 years 3 years 4 years
Use CoE
11%
22%
33%
22%
0% 11%
5 years
All
11%
30%
15%
24%
13%
4% 4%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
In the main, those organizations with a CoE structure in place were looking for quicker payback periods. 88% of these firms expected payback in two years or less compared to 80% of all respondents. By contrast only 63% of respondents who had explicitly rejected the CoE model were looking at payback periods of two years or less. As noted, various measures were in use to assess the value of a BPMS project, including: Table 10: Measures for Payback
Cost Savings Customer Satisfaction Productivity ROI Other Payback Measure 5.68% 4.55% 3.41% 79.55% 6.82%
Thus whilst most expressed the results in terms of Return on Investment, around 14% used measures such as customer satisfaction, cost savings and productivity increases.
Page 48 of 68
FIGURE 33: ACTUAL RATE OF RETURN
18% <25% 25%-50% 51%-99% 100%+ 31% 4%
48%
In effect, almost half (48% the respondents indicated that their rate of return (where they used ROI or a similar measure) was at or over 100%. However, 49% reported that the outcome was a rate of return under 50%. The expected ROI can again be compared to the approach used in respect of an Internal Centre of Excellence.
Page 49 of 68
FIGURE 33A: ACTUAL RATE OF RETURN AND APPROACH TO COE
No Plans
26%
26%
47%
Plan to set up CoE
33%
42%
25% Under 25%
Similar Approach
25%
31%
44%
25% -100% 100% +
Use CoE 0%
38%
63%
All
21%
30%
48%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
In this case, over 60% of the firms with a CoE were looking for rate of return of at least 100% and none were prepared to accept a rate lower than 25%. Again, those firms either with no current CoE model, or no plans to adopt this approach also tended to expect the lowest rates of return on their BPMS activities (26-33% expecting a rate lower than 25%). In combination, those firms that reported a high outcome in terms of ROI, also tended to have completed their BPMS initiative in less than two years.
Page 50 of 68
FIGURE 34: ACTUAL RATE OF RETURN AND PROJECT LENGTH
100%+
15%
31%
12%
23%
15% 0% 4% < 1 year 1 year 1-2 years 2 years 3 years 4 years 5 years
51-99% 0%
ROI %
100%
0%
25-50%
8%
17%
17%
33%
17% 0%8%
Under 25%
10% 0%
30% 20%
0% 40%
30% 60%
10% 80%
20%
0% 100%
Thus 46% of those who reported a 100% ROI had completed the project in a year or less and this increases to 71% over a two-year period. By contrast, of those reporting a less than 25% ROI, 40% completed in a year and 30% took 3 years or more.
Page 51 of 68
FIGURE 35: METHOD USED TO EVALUATE ROI

Elimination of Outside Services Elimination of FTEs Reduction of Cost Of Goods Sold Inventory Turnover Return On Equity (ROE) Return On Capital Employed (ROCE) Return On Assets (ROA) Cost Per Transaction Profit Per Account Cost Per Sale Employee Retention Customer Satisfaction/Feedback 0% 5% 10% 15% 20% 5% 7% 21% 25% 8% 3% 16% 4% 4% 5% 8% 8% 12%
Respondents were then asked to indicate what measures were used in the calculation of Return on Investment, and were asked to Select All That Apply from the following: Customer Satisfaction/Feedback Employee Retention Cost Per Sale Profit Per Account Cost Per Transaction Return On Assets (ROA) Return On Capital Employed (ROCE) Return On Equity (ROE) Inventory Turnover Reduction of Cost Of Goods Sold Elimination of FTEs Elimination of Outside Services
Quite clearly, in most cases, the value of BPMS is seen as improved customer satisfaction (21% of all responses), followed by cost per transaction reductions (16%) and the elimination of FTEs (12%).
Page 52 of 68
FIGURE 36: EXPECTED ROI PERIOD
20%
19%
Project Must be Profitable in the First Year Project Must Break-Even in First Year 13% Positive ROI Required Within 2 Years Positive ROI Required Within 3 Years Other or None of the Above
22%
25%
In terms of planning future BPMS, respondents were asked to indicate the payback time frame they expected to use, 32% expect the project to at least break even in the first year and 57% of respondents are looking for a positive return in the first two years. These expectations can be compared to past performance as: Again those firms with a CoE in place are much more demanding in their future expectations than those with no plans to develop such a function:
Page 53 of 68
FIGURE 36A: EXPECTED ROI PERIOD COMPARED TO COE APPROACH
No Plans
13%
13%
13%
30%
30%
Plan to set up CoE
28%
6%
39%
17%
11% Project Must be Profitable in the First Year Project Must Break-Even in First Year
Similar Approach
5%
20%
40%
20%
15%
Positive ROI Required Within 2 Years Positive ROI Required Within 3 Years Other or None of the Above
Use CoE
23%
15%
46%
0% 15%
All
19%
13%
25%
22%
20%
0%
20%
40%
60%
80%
100%
What is interesting is to compare these future expectations, especially in terms of time span with the reported previous performance (figures 32 and 34 above). To simplify that data, those who reported an ROI of 100% or more are described as success (i.e., it met the criteria set out in figure 36) and the time periods are broken into 1 year or less, 2 years, 3 years or 4 or more years. This gives a table as: Table 11: Correlation between future financial expectations and past performance
1 year or 1 year or less, less, Return 1-2 years, success under 100% success 54% 31% 0% 50% 50% 0% 13% 6% 31% 0% 0% 21% 0% 40% 20% 22% 19% 17% 1-2 years, Return under 3 years, 100% success 15% 0% 0% 0% 44% 0% 21% 29% 0% 0% 22% 7% 3 years, Return 4 years or under more, 100% success 0% 0% 0% 0% 0% 6% 21% 0% 0% 0% 6% 2% 4 years or more, Return under 100% Grand Total 0% 100% 0% 100% 0% 100% 7% 100% 40% 100% 6% 100%
Response Profitable in the First Year Break-Even in First Year Positive ROI Within 2 Years Positive ROI Within 3 Years Other or None of the Above Grand Total
Thus, and perhaps oddly, those organizations with previous experience of relatively slow projects (3 years or more) are not particularly looking for quicker payback periods in the future. Thus 57% of those who expect a positive ROI within 3 years had taken 3 or more years on previous projects (and more than half of them report a ROI below their stated break-even value). On the other hand, those organizations looking for payback in a year have in the past managed very quick completion even if their success rate has been a little more variable. What stands out is that those organizations with the most exacting targets (profitable in the first year) completed 85% of previous projects in a year and report, overall that 69% of their projects managed, at least, to break even.
Page 54 of 68
Section 5: Funding and Focus of Future BPMS
Section 5: Funding and Focus of Future BPMS The next set of questions asked respondents to identify their future funding plans, initiatives and what metrics would be used to gauge the success of their BPMS approach. Respondents were asked to indicate how they intended to spread their BPMS expenditure between: Software licenses Hardware Integration services Consulting services
Page 55 of 68
FIGURE 37: AVERAGE FUTURE BPMS EXPENDITURE PATTERN

$120,000 $100,000 $80,000 $60,000 $40,000 $20,000 $Software licenses Hardware Integration services Consulting services $49,054 $97,742 $85,016 $102,323
Thus on average, firms are planning to spend over $100,000 on consulting services and less than $50,000 on hardware. This pattern of expenditure is roughly in line with figure 24 but there are some significant differences. Table 12: Changing Pattern of Expenditure?
Software Hardware Deployment, Integration, and Customization Services Process Analysis, Training and Consulting Past 21% 10% 26% 41% Future 26% 14% 29% 31%
Overall, the indication is that firms see a continuing need for substantial expenditure on software and hardware, but a quite significant drop in the use of consulting services (some of this difference may be related to the different categories but the trend is clear). However, expenditure on deployment and integration is more or less static at between 25-30%. In view of the importance of software expenditure, respondents were asked to describe your top priority for implementing BPM Software (e.g., which if successfully addressed would most likely enable you to invest)?
Page 56 of 68
FIGURE 38: TOP PRIORITY FOR BPM SOFTWARE

Routing document according to defined business rules and event triggers Monitoring the performance of personnel and business activities Gaining the ability to define syntactically, depict visually, and trouble-shoot business processes Extending the life or reducing maintenance of existing enterprise applications Ensuring the integrity of transactions executed across the Internet Enforcing business rules while working with business partners Enabling an enterprise-wide redesign of business processes Connecting multiple applications within the organization (data-level application integration) 0% 5% 10% 10% 15% 20% 25% 30% 35% 40% 5% 4% 5% 36% 9% 13% 17%
In this case, quite clearly the most dominant request is for software that will enable enterprise-wide redesign of business processes (36%). Other popular requests include the ability to set out and trouble shoot business processes (17%), monitor performance (13%) and link multiple applications (10%).
Page 57 of 68
FIGURE 39: SOURCE OF FUNDING FOR BPMS
Senior management (other than CIO) Marketing Line, or Business management External source (grant, parent company, business partner) CIO or IT Manager 5% 25% 3% 25%
42%
0% 5% 10% 15% 20% 25% 30% 35% 40% 45%
Funding for the next BPM Initiative was mostly expected from the enterprises senior management as: Thus in 67% of cases, future funding would come from senior management in general or the CIO and/or IT manager in particular.
Page 58 of 68
FIGURE 40: SUCCESS METRICS FOR BPMS

Lower Total Cost of Ownership (acquisition and on-going maintenance) Lower IT support staff costs (on-going application support levels) Initial deployment costs (ease of application integration) Faster Time to market (deployment time) Use of internal development resources (ability to deploy IT resources to other initiatives) Utilization of existing infrastructure and software assets 0% 5% 12% 13% 19% 16% 21%
Source: & Innovation 10% Transformation 15% 20% 25%
19%
Respondents were asked to indicate what set of metrics would be used to justify moving to a BPM architecture. The options included (and respondents could choose more than one response): Utilization of existing infrastructure and software assets (ability to implement services in language of choice) Use of internal development resources (ability to deploy IT resources to other initiatives) Faster Time to market (deployment time) Initial deployment costs (ease of application integration) Lower IT support staff costs (on-going application support levels) Lower Total Cost of Ownership (acquisition and on-going maintenance)
In effect, a variety of metrics are in place including improved utilizations of existing resources (21%), lower maintenance costs (19%), faster product development (19%) and the ability to free up IT resources for other initiatives (16%). In the main, lowering costs as such, is not a commonly used metric.
Page 59 of 68
FIGURE 40A: SUCCESS METRICS FOR BPMS AND APPROACH TO COE
No Plans
15%
9%
21%
16%
19%
20%
Utilization of existing infrastructure and software assets Use of internal development resources (ability to deploy IT resources to other initiatives) Faster Time to market (deployment time)
Plan to set up CoE
27%
20%
16%
11%
11%
16%
Similar Approach
21%
18%
18%
14%
10%
20% Initial deployment costs (ease of application integration)
Use CoE
15%
9%
21%
16%
19%
20% Lower IT support staff costs (on-going application support levels)
All
21%
16%
19%
13%
12%
19%
Lower Total Cost of Ownership (acquisition and on-going maintenance) 100%
0%
20%
40%
60%
80%
In this case, firms with different approaches to CoE had also tended to identify different ongoing success metrics. Those with an established CoE tended to emphasise cost and speed of development as the key issues. On the other hand, those with plans to develop a CoE approach tended to place the stress on utilization of existing infrastructure and software assets.
Page 60 of 68
FIGURE 41: FOCUS FOR FUTURE BPMS

Process modeling and analysis unrelated to Six Sigma Lean Six Sigma or other Six Sigma process improvement projects Implementation or introduction of Balanced Scorecard methods/program Training and/or skills-development in process modeling and management Establishment of performance metrics and management Development and/or certification of an Enterprise Architecture 0% 5% 10% 15% 15% 20% 25% 30% 21% 9%
19%
9%
27%
Respondents were asked to indicate which BPMS initiatives were planned in the coming year, from: Development and/or certification of an Enterprise Architecture Establishment of performance metrics and management Training and/or skills-development in process Modeling and management Implementation or introduction of Balanced Scorecard methods/program Lean Six Sigma or other Six Sigma process improvement projects Process Modeling and analysis unrelated to Six Sigma
Effectively the goal for many organizations is to focus on BPMS training and skills development (27%), to establish a set of performance metrics (21%) and for process Modeling (19%). In general there is relatively limited focus on more structured approaches such as Six Sigma or Balanced Scorecard methodologies.
Page 61 of 68
FIGURE 42: PREFERRED PRICING MODEL FOR BPM INVESTMENT

Subscription fee based on processing volume and usage Single, fixed price for development environment (plus annual maintenance fee) Service Level Agreement Price per user Price per process managed or per singleprocess application Price per CPU Open Source Licensing (free of license costs) 0% 5% 10% 6% 15% 16% 15% 20% 25% 16% 18%
6% 22%
The different pricing models used for BPM investment. In this case, many firms are opting for a fixed fee model (22%) or to use open source software (16%) so as to fix costs. However, costing based on volume of users (18%) and CPU (15%) are also popular.
Page 62 of 68
FIGURE 43: FUTURE BPM DEVELOPMENT ENVIRONMENT

Other DBMS Sybase Oracle DB MS SQL Server IBM DB2 Thin-clients (non-Windows; not pure web) Web Clients (other than SharePoint) SharePoint (MOSS 2007) Clients Windows Clients SaaS Unix Server J2EE Windows Server 0% 2% 4% 6% 8% 5% 8% 13% 17% 10% 12% 14% 16% 18% 8% 9% 2% 3% 10% 9% 1% 13% 3%
In terms of future environments, respondents were asked to indicate which of the following (they could select more than one), they planned to focus on: Windows Server J2EE Unix Server SaaS Windows Clients SharePoint (MOSS 2007) Clients Web Clients (other than SharePoint) Thin-clients (non-Windows; not pure web) IBM DB2 MS SQL Server Oracle DB Sybase Other DBMS
In this case, most will opt to base the BPMS software on Windows Servers (17%), J2EE (13%), OracleDB (13%) or WebClients (10%). Combined these account for 53% of all organizations. A number of firms indicated that they had not yet invested in specialist BPMS software.
Page 63 of 68
FIGURE 44: REASONS FOR NOT INVESTING IN BPMS SOFTWARE

Utilizing Workflow Management Inside of ERP Software or Another Packaged Application (Financials, HRMS, Supply Chain, etc) Unable to Find Project Sponsor (desire is there, but no funding is available) Unable to Demonstrate a Compelling Business Case Lack of Internal Skill Set Needed to Support a BPM Initiative 20%
25%
17%
14%
Lack of Internal Motivation (no compelling need) Expect Current Capabilities to be Absorbed and/or Offered by the Platform, Such as SAP or SharePoint (MOSS) 0% 5%
16%
8%
10% 15% 20% 25% 30% Source: Transformation & Innovation
In general, these organizations clearly feel that this is not holding them back and 33% feel that one of two existing solutions (either packaged within other software 25%, or in wider platform 8%) are sufficient for their needs. A further 33% indicate that they can see no compelling need for such an investment. The balance would like to adopt more specialist software, but find they either broadly lack the skillset to use it (14%) or cannot find a funding source (20%). As noted in figure 42, some 16% of firms already use open-source software to reduce their licensing fees.
Page 64 of 68
FIGURE 45: CONSIDERATION OF OPEN SOURCE SOFTWARE
42% 53%
"No, it remains a consideration but no significant changes planned" "Yes, Open Source Software is being taken more seriously now than previously."
However, 42% of the other firms are now seriously considering a shift to open-source software. Other cost reduction measures are also under consideration.
Page 65 of 68
FIGURE 46: EFFECT OF DOWNTURN ON APPROACH TO IT SUPPLIERS

We will reduce the number of suppliers (consultants, resellers and vendors) to a core group based on existing relationships and past performance We will focus on commodity, COTS solutions requiring less specialized skills to support in order to reduce the cost of maintaining our existing systems We will focus more on solutions aligned with our existing skills and infrastructure We will expand the number of suppliers in order to introduce greater price competition We are more likely to buy from smaller vendors with cheaper offerings We are more likely to buy from larger vendors with dominant market position The current economic environment will have little affect on our approach to IT suppliers 0% 5% 10% 15% 6%
25%
33%
5%
6%
8%
16%
20%
25%
30%
35%
Although very few respondents indicated that there would be no change (16%), the response varied quite considerably. Most placed greater emphasis on value for money (focus more on solutions aligned with our existing skills and infrastructure 33%) but a significant number indicated they would reduce the range of suppliers they dealt with (25%). However, in contrast, a very small number of respondents indicated their preferred strategy would be to extend their range of suppliers (5%). Those firms that indicated they were investigating open-source software (fig. 45 above), varied a little in their overall approach to supplier choice.
Page 66 of 68
Table 13: Different Approaches to Supplier Selection Strategy?

Review Open Source 18% 7% 7% 5% 30% 9% 24%
ALL The current economic environment will have little affect on our approach to IT suppliers We are more likely to buy from larger vendors with dominant market position We are more likely to buy from smaller vendors with cheaper offerings We will expand the number of suppliers in order to introduce greater price competition We will focus more on solutions aligned with our existing skills and infrastructure We will focus on commodity, COTS solutions requiring less specialized skills to support in order to reduce the cost of maintaining our existing systems We will reduce the number of suppliers (consultants, resellers and vendors) to a core group based on existing relationships and past performance 16% 8% 6% 5% 33% 6% 25%
Thus the interest in open-source, is not just another form of cost-cutting. Those firms are quite likely to indicate that the economic environment will have little effect overall (18%) but are slightly more likely to adopt an overall approach that will reduce costs than other organizations.
Page 67 of 68
FIGURE 47: MARKET MINDSHARE LEADING BPM SOFTWARE BRANDS

40% 35% 30% 25% 20% 15% 10% 5% 0% Oracle IBM Lombardi Microsoft Tibco 15% 14% 11% 11% 2% 7% 6% 7% 4% 6% 1% 9% 5% 8% 2% 2% Appian 11% 9%
Third Place Ranking Second Place Ranking First Place Ranking
3 2 1
Finally respondents were asked to identify what software firms they perceived to be leading in the development of the BPM Vision and to rank up to three suppliers as first, second and third. Above the stacked chart shows in the first tier (blue) the percent first place mentions for each vendor, with percent of second place mentions in the middle, then third place mentions in on top. Respondents were unprompted with a blank box for each of the three rankings. Vendors mentioned less than 1% of the time in either the first, second or third ranking were omitted. Sceptics will decry this type of question as merely a popularity contest, and in fairness that is technically correct this provides only a measure of who has succeeded in getting their brand into the global marketplace. We have found, however, that these answers of who you perceive to lead are invariably more honest and accurate than seeking an assessment of what is currently in use. Therefore this Mindshare assessment is at least a valuable reference point in examining market currents, and arguably is more accurate than more traditional, quantitative market share measurements.
Page 68 of 68

2009 BPM Market State

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2009 Transformation & Innovation

About the Author: Nathaniel Palmer

2009 Transformation & Innovation

2009 Transformation & Innovation

2009 Transformation & Innovation

2009 Transformation & Innovation

2009 Transformation & Innovation

BPM Adoption and Usage

2009 Transformation & Innovation

FIGURE 1: REGIONAL DISTRIBUTION

Africa/Middle East, 4.21%

N America, 32.11% Europe, 33.16%

Source: Transformation & Innovation

2009 Transformation & Innovation

FIGURE 2: COMPANY SIZE

> 5000, 33.68%

100-500, 15.79% 500-1000, 10.53% 1000-2500, 12.11% 2500-5000, 8.95%

Source: Transformation & Innovation

Region Africa/Middle East Asia/Oceania Europe N America S America Grand Total

Grand Total 100.00% 100.00% 100.00% 100.00% 100.00% 100.00%

2009 Transformation & Innovation

FIGURE 3: INDUSTRIAL SECTOR

Financial Services, 25.79%

2009 Transformation & Innovation

2009 Transformation & Innovation

FIGURE 4: RESPONDENT ROLE IN BPM

12.24% 6.70% 3.46%

Define Business Requirements

Source: Transformation & Innovation

2009 Transformation & Innovation

FIGURE 5: RESPONDENT ROLE IN ORGANIZATION

35.79% 11.05% 14.21% 1.05%

HR Manager or Human Performance Practitioner

Executive (CEO, COO, CFO)

Source: Transformation & Innovation

End User 0.00% 11.11% 0.00% 1.52% 1.43%

2009 Transformation & Innovation

Process Practitioner/Busines s Analyst

Business or Line of Business Manager

2009 BPM Market Report

Section 1: Current Approach to BPM

Section 1: Current Issues with BPM

2009 Transformation & Innovation

2009 BPM Market Report

Section 1: Current Approach to BPM

FIGURE 6: PREVIOUS INVOLVEMENT WITH BPM

Neither participated or observed, 14.78% Observed, 19.63% Directly participated, 65.59%

Source: Transformation & Innovation

2009 Transformation & Innovation

2009 BPM Market Report

Section 1: Current Approach to BPM

FIGURE 7: PREVIOUS EXPERIENCE AND CURRENT ROLE WITH BPM

70% 80% 90% 100%

Source: Transformation & Innovation

2009 Transformation & Innovation

2009 BPM Market Report

Section 1: Current Approach to BPM

Source: Transformation & Innovation

2009 Transformation & Innovation

2009 BPM Market Report

Section 1: Current Approach to BPM

FIGURE 7A: NUMBER OF INITIATIVES