Where is the BPM Market Heading?

16th October 2005

Despite the advertising hyperbole, BPM is still at a relatively early stage of its development. The number of companies that have adopted a BPM strategy is easily matched by the number of companies on the sidelines, who are content to pick at the applications they need rather than commit to full scale BPM implementation.

To a certain extent, the reservations of the latter group are understandable. For the last two years, the major suppliers have all made significant acquisitions and well known names such as Adaytum, Frango, Brio, Crystal and SRC have been swallowed up by other organisations. This frenzy of acquisitions and market instability has no doubt contributed to decision makers' reluctance to make strategic moves for the long term. But the dust is settling and most of the available marriage candidates and their suitors have paired up.

This welcome respite means that the major suppliers that have assembled their product portfolios can concentrate on assimilating their purchases, both technically and organisationally and turn their attention on what end users really need from their BPM suppliers. Whilst many of the software houses have acquired their way to a BPM portfolio this has been at the expense of simplicity. As the application and technical platforms have grown, so has the complexity of the overall solutions. This is why implementers at the sharp end of BPM have been particularly welcoming of the latest announcements.

David Jones, Services Director of Paragon Consulting, told FSN, "The reason that revenue growth in the BPM sector has been so sluggish is that the major suppliers have not really delivered on the BPM promise. There has been an assumption that centralisation and web deployment is the answer whether it is group reporting or planning. The reality is that local users have been left out of the frame and are building their own tools or using Excel to do their planning and then populating the very expensively developed group system. If BPM is really going to deliver on its promise then personalized performance metrics and full integration across all of the business processes is pivotal," he said.

John Adams, a Director at consulting firm Deloitte, agrees. He told FSN, "I'm very relieved to see the emphasis on integration and the simplification of the user experience underlined in these announcements."

Adams warns that if the BPM vendors do not get their act together on integration then they leave themselves more vulnerable to competition from the ERP vendors. "The ERP vendors' solutions generally have a much better integrated platform but they simply do not have the functionality in their applications. By announcing better integration, Hyperion has probably given itself a two year lead over the ERP vendors."

But what is integration? Hyperion say that they have not only integrated their applications so that they can share the same data and structural information (meta data) but they have also integrated them with the supporting technology layer so that "for the first time, formerly disparate activities including management and production reporting, advanced analytics, financial reporting and consolidation, enterprise planning, scorecarding and strategic modelling are all accessible through a single, unified Workspace." As a result, they say that Hyperion users are no longer forced to shuffle between applications or sign in and out of separate tools to get answers to vital business questions.

Cognos appear to say something similar but in their most recent announcement concentrate on the BI aspects rather than the business applications. For example, "Cognos 8 BI is the only solution that provides the complete range of BI capabilities in a single product, on a single architecture. It is also the only solution to deliver a simplified, zero-footprint interface for all users, authors and administrators." However, they mention in passing that "Cognos 8 BI capabilities can natively access Cognos Planning and Consolidation Data."

For software houses such as Geac, OutlookSoft and SAS, integration has not been much of an issue because their solutions have been developed as an integrated solution set from day one, rather than acquiring BPM components through takeovers of other companies.

Business users, decision makers and even IT specialists can be forgiven for being slightly confused. Deloitte's Adams says, "No one can claim to have the perfect solution. They all have their strengths and weaknesses and each one tackles the issue of integration in its own way. There is no right or wrong way to do it."

At the detailed level there are of course differences between the technical and functional capabilities of all of the software vendors in the BPM space but this should not be allowed to mask the important trends. Firstly, all suppliers recognise that BPM solutions have to be tightly integrated. Secondly, all realise that the technology has to be simplified if it is to be successful.

Thankfully, with the integration problem largely cracked, the market is looking more imaginatively at improving the so called "user experience". In broad terms, end users do not care whether they are interrogating a multi-dimensional or a relational database. What they require is the ability to get at the information they want, when they want it and using whatever tool they feel comfortable with and without having to 'flip-flop' between applications. This is the idea behind Hyperion's innovative workspace, where users can access and store any information relevant to their role irrespective of the application.

One of the ways that suppliers can strengthen integration and improve the user experience is through stronger links to Microsoft Office. For example, Hyperion's "Smart View for Office" allows users to embed BI content or information from any of their financial management applications in Microsoft Excel, Microsoft Word and Microsoft PowerPoint. Cartesis, OutlookSoft and SAS similarly make a virtue of their links to Microsoft.

Thankfully, with the integration problem largely cracked, the market is looking more imaginatively at improving the so called "user experience". In broad terms, end users do not care whether they are interrogating a multi-dimensional or a relational database. What they require is the ability to get at the information they want, when they want it and using whatever tool they feel comfortable with and without having to 'flip-flop' between applications. This is the idea behind Hyperion's innovative workspace, where users can access and store any information relevant to their role irrespective of the application.

One of the ways that suppliers can strengthen integration and improve the user experience is through stronger links to Microsoft Office. For example, Hyperion's "Smart View for Office" allows users to embed BI content or information from any of their financial management applications in Microsoft Excel, Microsoft Word and Microsoft PowerPoint. Cartesis, OutlookSoft and SAS similarly make a virtue of their links to Microsoft.

So where is the market heading? The BPM industry seems to have reached a watershed. The first phase was about establishing the BPM concept and linking performance management processes in the minds of end users. The second phase has been around assembling the product portfolio and integrating the pieces with each other and the underlying technology. The phase we are now entering is about simplifying the overall offering so that end users can maximize their productivity, reduce the learning curve and minimize the IT costs of ownership. To date, many of the suppliers' offerings have looked similar and much of the effort has been focused on the technology. But there are growing signs of a shakeout. The market leaders will use their dominant position and financial muscle to develop exciting new interfaces, more interoperability between applications and greater process control embedded in their products as a way of differentiating themselves and really delivering on the promise of BPM.