2009 BPM Market State

7/30/2019 2009 BPM Market State

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2009 Transformation & Innovation Page 1 of 68

{COVER PAGE}


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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.........................................................................................................................8Figure 2: Company Size ...................................................................................................................................9Figure 3: Industrial Sector ..............................................................................................................................10Figure 4: Respondent Role in BPM ...............................................................................................................12Figure 5: Respondent Role in Organization ..................................................................................................13Figure 6: Previous Involvement with BPM ....................................................................................................15Figure 7: Previous Experience and Current Role with BPM........................................................................16Figure 7A: Number of Initiatives.....................................................................................................................18Figure 8: Current Usage of BPM....................................................................................................................19Figure 9: Approach to BPM Centre of Excellence........................................................................................20Figure 10: Role of IT in CoE...........................................................................................................................22Figure 11: Staffing Composition of CoE ........................................................................................................23Figure 12: Setup of CoE .................................................................................................................................24Figure 13: Reporting Lines for CoE ...............................................................................................................25Figure 14: Focus of CoE.................................................................................................................................26Figure 15: Business Role of CoE...................................................................................................................27Figure 16: Adoption of Popular Methodologies.............................................................................................28

Figure 17: Adoption of Less-Popular Methodologies ...................................................................................29Figure 18: Current Experience with BPMS ...................................................................................................32Figure 19: Correlation Between CoE and BPMS Adoption..........................................................................33Figure 20: Expenditure of BPM (to date).......................................................................................................34Figure 21: Current Focus of BPM ..................................................................................................................35Figure 22: Allocation of Time within BPMS Activities...................................................................................36Figure 23: Allocation of Expenditure to Support BPMS ...............................................................................37Figure 24: Allocation of Expenditure to Support BPMS, CoE Implemented...............................................38Figure 25: Composition of BPMS teams .......................................................................................................39Figure 26: Composition of BPMS Teams, CoE Established........................................................................40Figure 27: Methodology Used to Support BPM ............................................................................................41Figure 28: Methodology Used to Support BPM vs. Approach to CoE ........................................................42Figure 29: Degree of Success in Using BPM................................................................................................43

Figure 30: Investment Appraisal of BPMS ....................................................................................................45Figure 31: Investment Appraisal of BPMS vs. Approach to CoE ................................................................46Figure 32: Time Period for Return on Investment ........................................................................................47Figure 32A: Time Period for Return on Investment and Approach to CoE.................................................48Figure 33: Actual Rate of Return ...................................................................................................................49Figure 33A: Actual Rate of Return and Approach to CoE............................................................................50Figure 34: Actual Rate of Return and Project Length ..................................................................................51Figure 35: Method Used to Evaluate ROI .....................................................................................................52Figure 36: Expected ROI Period ....................................................................................................................53Figure 36A: Expected ROI Period Compared to CoE Approach.................................................................54Figure 37: Average Future BPMS Expenditure Pattern ...............................................................................56Figure 38: Top Priority for BPM Software .....................................................................................................57Figure 39: Source of Funding for BPMS .......................................................................................................58Figure 40: Success Metrics for BPMS...........................................................................................................59Figure 40A: Success Metrics for BPMS and Approach to CoE...................................................................60Figure 41: Focus for Future BPMS ................................................................................................................61Figure 42: Preferred Pricing Model for BPM Investment .............................................................................62Figure 43: Future BPM Development Environment......................................................................................63Figure 44: Reasons for not investing in BPMS Software .............................................................................64Figure 45: Consideration of Open Source Software.....................................................................................65Figure 46: Effect of downturn on approach to IT suppliers..........................................................................66Figure 47: Market Mindshare Leading BPM Software Brands .................................................................68


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List of Tables

Table 1: Distribution of Company Size by Region..........................................................................................9Table 2: Distribution of Industrial Sector by Region .....................................................................................10Table 3: Distribution of Industrial Sector by Organizational Size ................................................................11Table 4: Organizational Role and Role in respect to BPM ..........................................................................13Table 5: Organizational Role and Previous Experience of BPM .................................................................16Table 6: Single Greatest Benefit of BPM ......................................................................................................17Table 7: Number of Initiatives ........................................................................................................................18Table 8: Title of Centre of Excellence............................................................................................................20Table 11: Correlation between future financial expectations and past performance.................................54Table 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 andcompany size completed the survey. Responses were individually validated and scrubbed ofBPM vendors or any obvious bogus answers.

This version of the report presents the early results and initial analysis, including variouscross-tabulations and examinations for statistical significance. Additional commentaryregarding 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

Africa/Middle Eas t,4.21% Asia/Oceania,

18.95%

Europe, 33.16%

N America, 32.11%

S America, 11.58%

Source: Transformation & Innovation

The majority of the respondents were based in either Europe or North America and coveralmost 60 individual countries (of which the United States was the single most common.)


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FIGURE 2: COMPANY SIZE

> 5000, 33.68%

2500-5000, 8.95%1000-2500, 12.11%

500-1000, 10.53%

100-500, 15.79%

2-99, 18.95%


Roughly one-third of the respondents worked for firms with more than 5000 employees butequally one-third worked for firms with between 2 and 500 employees.

When company size and region are compared, in the main the spread is reasonablyconsistent except that very large firms are overly represented in the Africa/Middle Eastsample and smaller firms particularly common in Europe and South America. Overall thosetwo 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?

Region > 50002500-5000

1000-2500 500-1000 100-500 2-99 Grand Total

Africa/Middle East 62.50% 12.50% 0.00% 0.00% 0.00% 25.00% 100.00%

Asia/Oceania 33.33% 11.11% 8.33% 19.44% 11.11% 16.67% 100.00%

Europe 28.57% 4.76% 12.70% 7.94% 23.81% 22.22% 100.00%

N America 37.70% 13.11% 11.48% 11.48% 11.48% 14.75% 100.00%

S America 27.27% 4.55% 22.73% 4.55% 18.18% 22.73% 100.00%

Grand Total 33.68% 8.95% 12.11% 10.53% 15.79% 18.95% 100.00%

The respondents are spread across a range of industrial sectors, with the majority in the ITsector or financial services, shown in Figure 3.


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FIGURE 3: INDUSTRIAL SECTOR

Financial Services,

25.79%

Government,

16.32%IT, 38.42%

Manufacturing,

14.74%Utility, 4.74%


These firms are divided globally as:

Table 2: Distribution of Industrial Sector by Region

RegionFinancialServices Government IT MFG Utility

GrandTotal

Africa/Middle East 38% 38% 25% 0% 0% 100%

Asia/Oceania 33% 11% 44% 8% 3% 100%

Europe 24% 16% 43% 16% 2% 100%

N America 28% 15% 28% 20% 10% 100%

S America 9% 23% 50% 14% 5% 100%

Grand Total 26% 16% 38% 15% 5% 100%

Again, broadly the distribution is fairly even although Financial Services and Government areover-represented in Africa and the Middle East whilst IT firms constitute over 50% of therespondents 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 2500employees and small firms are those with between 2 and 500. The distribution is:

Table 3: Distribution of Industrial Sector by Organizational Size

Company Size:FinancialServices Government IT MFG Utility

GrandTotal

Large 32.10% 13.58% 38.27% 9.88% 6.17% 100.00%

Medium 23.26% 25.58% 25.58% 18.60% 6.98% 100.00%

Small 19.70% 13.64% 46.97% 18.18% 1.52% 100.00%

Grand Total 25.79% 16.32% 38.42% 14.74% 4.74% 100.00%

In this case, the only significant exception to the normal distribution is that, on the whole, ITfirms tend to smaller than other respondents.

Finally, those completing the survey were asked to indicate both their own role in thecompany and their involvement in BPM.


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FIGURE 4: RESPONDENT ROLE IN BPM

30.48%32.10%

6.70%

3.46%

12.24%

4.16%

10.85%

De

fineBusiness

Requirements

DesignIT

Specification

EndUser

FinancialSponsor

o

fInitiative

InternalAdviser

None

Outside

Consu

ltant/Supplier


Overall, most of the respondents were actively involved in BPM either as defining thebusiness requirements (30%) or in designing the IT specification (32%). It is alsonotable that approximately12% indicated they serve in an internal practitioner capacity -- arole similar to an external consultant but were they are already employed by the firm.


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FIGURE 5: RESPONDENT ROLE IN ORGANIZATION

11.05%14.21%

1.05%

35.79% 37.89%

Executive(CEO,

COO,

CFO)

B

usinessorLineof

B

usinessManager

HR

Manageror

Hu

manPerformance

Practitioner

ITManager/IT

Developer

Process

Pr

actitioner/Busines

sAnalyst


Again, the majority of the respondents indicated that their overall corporate role was as eitherIT manager or in terms of Process and Business Analysis. When the two attributes arecompared, some interesting information emerges which re-appear throughout this survey.

Table 4: Organizational Role and Role in respect to BPM

Which of the Following BestDescribes Your Job Function?(Choose one)

DefineBusiness

RequirementsDesign IT

Specification End User

FinancialSponsor of

InitiativeInternalAdviser

Executive (CEO, COO, CFO) 19.05% 14.29% 0.00% 28.57% 38.10%

Line of Business Manager 55.56% 3.70% 11.11% 3.70% 25.93%

HR Manager or HR Practitioner 100.00% 0.00% 0.00% 0.00% 0.00%

IT Manager/IT Developer 19.70% 62.12% 1.52% 1.52% 15.15%

Process /Business Analyst 44.29% 14.29% 1.43% 0.00% 40.00%

Thus most of the CEO respondents see themselves as financial sponsors or in terms ofdefining the business requirements. None report themselves as end users and, overall,

very few respondents saw themselves in this role. To explore this, respondents were askeda series of questions around their own experience, the type of initiatives currently in use, thebenefits so far from BPM and how (if at all) they are using the approach of a BPM centre ofachievement.


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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

Directly

participated,

65.59%

Observed, 19.63%

Neither participated

or observed,14.78%


Overwhelmingly (almost 66%) the respondents indicated direct personal involvement withBPM and a further 20% have observed a previous implementation.


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FIGURE 7: PREVIOUS EXPERIENCE AND CURRENT ROLE WITH BPM

70%

67%

59%

53%

77%

60%

14%

19%

28%

33%

21%

28%

15%

14%

14%

13%

2%

13%

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

Define Business Requirements

Design IT Specification

End User

Financial Sponsor of Initiative

Internal Adviser

Outside Consultant/Supplier

Directly participated

Observed

Neither participated or observed


When this degree of previous involvement is compared to the identified current role itbecomes clear that a substantive number of those who are financially sponsoring BPM havehad little or no previous practical experience.

Thus 46% of financial sponsors have either never had any previous engagement (13%) orhave only observed (33%). By contrast those most closely involved in specifying theBusiness requirements, or the IT specification, or to have been engaged as outsideconsultants, are also very likely to have had previous direct experience.

Finally it is also possible to relate overall organizational role to previous direct experiencewith BPM. The spread is interesting, but the emphasis is that those with a senior managerialrole or a business analyst background are more likely to have previous experience of BPMthan those from a technical IT background.

Table 5: Organizational Role and Previous Experience of BPM

DirectlyParticipated Observed

Neither Participatedor Observed Grand Total

Line of Business Manager 67% 33% 0% 100%

Executive (CEO, COO, CFO) 81% 19% 0% 100%HR Manager or HumanPerformance Practitioner 50% 0% 50% 100%

IT Developer 59% 28% 13% 100%

Business Analyst 74% 13% 14% 100%

Grand Total 66% 20% 15% 100%


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Respondents were asked to indicate what had been their firms single greatest benefit fromusing BPM to date:

Table 6: Single Greatest Benefit of BPM

Which of the Following Would You Rate As the Single Greatest Benefit of AnyBPM Software You Are Using? Total

Ability to Visualize, Simulate, and Trouble-Shoot Business Processes 19%

Analytical Reporting and Business Performance Management 7%

Automation of Standard Procedures and Processes 28%

Change Business Rules and Processes Without Impacting Underlying Applications 17%

Enforce Best Practices and Required Procedures 10%

Ensure Accurate and Consistent Data Entry or Document Creation 4%

Manage and Monitoring the Performance of Operations and Personnel 11%

Standardize Interchange of Process Models 3%


Thus the majority (28%) had had previous success in using BPM to automate their standardprocedures and a sizeable number (17%) had used it to change their operating procedureswithout having to change their core software systems. A further 19% report that BPM hadbeen used successfully to clarify and resolve existing problems. Relatively few identifiedeither standardisation or accuracy in terms of data entry.

In terms of current usage of BPM, respondents were asked to indicate which of the followingapplied 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 ormore categories.



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FIGURE 8: CURRENT USAGE OF BPM

55%

38%

36%

33%

32%

28%

18%

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

Automation Of Business Processes

Re-Engineering Program

Service-Oriented Architecture (SOA)

Major Business Process

Enterprise Architecture Initiative

Management Of Business Processes

Benchmarking Initiative


Of the options, at the moment most firms are engaged in automation of existing businessprocesses (55%). However, overall re-engineering is the most popular current usage, eitherfor a major business process (32%) or a Modeling process (38%). Relatively fewrespondents (18%) are currently using BPM for benchmarking.


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FIGURE 9: APPROACH TO BPM CENTRE OF EXCELLENCE

32%

29%

15%

12%

32%

As Soon as Possible

Already created a team

Long term consulting

arrangement

Already have a Centre ofExcellence

No Plans


Finally, respondents were asked to indicate the status of a BPM Centers of Excellence (orequivalent group) focused on either BPM, Re-Engineering, or Enterprise Architecture. Theycould 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 ProcessOptimization 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 asingle model). Only 12% respondents have set an existing Centre of Excellence although afurther 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 TotalWe Call it a "Program Management Office" 36.84%

We Indeed Officially Call it a "Center of Excellence" 38.76%

We Call it Neither CoE or PMO But Something Else 24.40%

Most of those who indicated a different title tended to describe it as a Business Process Unitor Process Analysis/Office. The next section looks at the role and structure of the CoE/PMOin more detail.


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2009 BPM Market Report 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%

50% IT / 50%

Business Program

Management, 53%

Less Than 50% IT,

19%

0% IT , 10%


As set out in figure 9, over 40% of the respondents have already set up either a CoE or havea 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 wasmade up fairly equally of IT and BPM.


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FIGURE 11: STAFFING COMPOSITION OF COE

23%

52%

25%

New Area of the Organizationinvolving New Hires

New Area Composed Entirely or

Mostly of Existing Staff

Rebranding of Existing Unit

With No Impact on Staff


Those who indicated 0% IT involvement described this as no involvement by IT other thansupport roles, as with any business area.

The majority also indicated that even if the office was new, the majority of the staff had beenemployed elsewhere in the organization before. Only 25% reported the need to have hired aconsiderable number of new staff.


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FIGURE 12: SETUP OF COE

10%

71%

11%

8%

0% 10% 20% 30% 40% 50% 60% 70% 80%

Setup By a Third Party IT Services Firm

Setup By Internal Team (following external

methods but not using external staff)

Setup By Management Consulting Firm (non-IT)

Setup By Specialized BPM or Re-engineering

Firm


In many cases, this usage of internal staff reflects how the office was originally set up, withover 70% reporting the CoE had been created by internal staff.


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FIGURE 13: REPORTING LINES FOR COE

16.35%

36.06%

8.65%

38.94%

Reporting is to Another

Area

Reporting is up through

the CEO


the CFO


the CIO


The reporting lines for the CoE were varied but in almost 75% of cases this was to the CEOor CIO. For those who indicated another area the most common structure was reporting tothe COO or a similar function.


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FIGURE 14: FOCUS OF COE

46%

27%

27%

Focused on Full Spectrum of

BPR/BPA/BPM/BPMS Implementation

Focused on Multiple Areas of IT (not limited to

BPM/BPMS)

Only Focused on Business Process Re-

engineering and Improvement


In most instances the CoE has a wide focus across the organization.


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FIGURE 15: BUSINESS ROLE OF COE

39%

21%

40%

Internal Service Center Designed as an Internal

Consulting Resource

Professional Services Team Focused on External

Customers

Specialized Team Focused on Specific Number of

Discrete Projects


The great majority of respondents were using their CoE to focus on internal issues andproblems:

Next Respondents were asked to indicate what software or formal approaches were used bytheir 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

23%

14%

27%

8%

19%

11%

14%

15%

15%

11%

26%

12%

24%

16%

28%

10%

14%

22%

20%

18%

0% 10% 20% 30% 40% 50% 60%

Agile Development

ARIS

Balance Scorecard

Kaizen

Lean Six Sigma

ISO 9004:2000

Six Sigma

Six Sigma

Standard CMMI Appraisal Method

TQM (Total Quality Management)

Other Approach

Established CoE


The figure above shows the adoption across the categories of the most popular tools andmethods identified as used by more than 10% of respondents.

Each respondent could indicate that they used more than one approach. The most populargroup 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 alreadyestablished 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 individualapproaches than those using a different approach (or at a different stage of theirdevelopment). Those with a CoE reported that on average they used 2.1 differentapproaches and those with a different approach (or in the process of setting up a CoE) usedan average of 1.8 approaches.


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FIGURE 17: ADOPTION OF LESS-POPULAR METHODOLOGIES

6%

4%

1%

6%

7%

3%

1%

1%

3%

8%

4%

0%

8%

6%

4%

2%

0%

4%

0% 2% 4% 6% 8% 10% 12% 14% 16%

BusinessGenetics/(xBML)

ISO 15504-4: 200

Kansei Engineering

Lean Manufacturing

PDCA

QFD

Taguchi

TRIZ

Zero Defect Program


If the slightly higher rate of adoption of individual processes is controlled for then there is nosignificant 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. Theywere 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 wasparticularly the case for EA tools (were System Architect, the single most popular choice wasonly 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 usedby just under 16%).

The Enterprise Portal area was dominated by Sharepoint (over 68% indicated they used oneversion or another), and the most popular Repository Manager approach was supplied byOracle (just over 20%). The most common source for other tools was internally writtenprocedures (20%) and, in general, internally developed software was a common solution forevery category.


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2009 BPM Market Report Section 3: Approach to BPMS


Section 3: Approach to BPMS


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FIGURE 18: CURRENT EXPERIENCE WITH BPMS

55%40%

6%

We Have Current Experience

Implementing Business ProcessManagement

We Plan to Implement a BPMS

or BPM Intiative

We have No Current or Future

BPM/BPMS Plans


The majority of the respondents (55%) indicated they had current experience in implementingBPMS.


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FIGURE 19: CORRELATION BETWEEN COE AND BPMS ADOPTION

71%

53%

47%

54%

55%

24%

42%

46%

42%

40%

5%

4%

7%

4%

6%

0% 20% 40% 60% 80% 100%

Have CoE

Have CoE asap

Internal Team

ConsultingRelationship

All

Current Experience

Plan to Implement

No Current Plans


Perhaps not surprisingly the current experience is related to the approach used in respect ofa 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)

39% 33% 36%41% 36% 37%

67%50%

33% 47% 34% 19%12%

21%

17%

0%

28%20%

30%

41% 52% 42%

17%

50%

0%

10%20%

30%40%

50%60%70%80%

90%

100%

Nothing

($0)

$5

,000,00

0


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 orplans to implement BPMS.

Expenditure so far on BPMS varies quite considerably. Most commonly respondentsindicated 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 anumber of respondents indicated they had spent over $1bn and this was most oftenconnected with expenditure on software.

Business Process Services

BPM Training

BPM Software


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FIGURE 21: CURRENT FOCUS OF BPM

49%

21%

52%

45%

38%

56%

26%

31%

17%

18%

38%

22%

25%

22%

22%

29%

21%

17%

19%

30%

22%

23%

22%

29%

26%

56%

26%

26%

41%

26%

55%

39%

61%

58%

40%

49%

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

Back Office Operations

Compliance Management

Customer Service

General Administration

Human Resources

IT/MIS (i.e., Services Management)

Manufacturing/Fulfillment

Order Entry or Billing

R&D

Risk Management

Sales and Marketing

Supply Chain or Other Logistics

Current

Planned

No Plans


Most commonly, respondents are currently applying BPM to their IT services (56%), generaladmin support (46%), Back Office Operations (49%) and customer service (52%)


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FIGURE 22: ALLOCATION OF TIME WITHIN BPMS ACTIVITIES

17%

10%

19%

11%

10%

13%

10%

10%

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 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 thediscovery analysis of processes and business rules (19%).


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FIGURE 23: ALLOCATION OF EXPENDITURE TO SUPPORT BPMS

29%

21%

13%

23%

15%

0% 5% 10% 15% 20% 25% 30% 35%

Process Analysis and/or Requirements Analysis

Software License

New Hardware

Deployment, Integration, and Customization

Services

Training and Change Management Services


Process analysis and capturing project or systems requirements emerged as the main areasof 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 absorbingaround 20% of all expenditure.


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FIGURE 24: ALLOCATION OF EXPENDITURE TO SUPPORT BPMS, COE IMPLEMENTED

27%

21%

10%

26%

14%

0% 5% 10% 15% 20% 25% 30%

Process Analysis and/or Requirements Analysis

Software License

New Hardware

Deployment, Integration, and Customization

Services

Training and Change Management Services


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 establishedCoE 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 asthese costs have been met earlier in the development cycle.


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FIGURE 25: COMPOSITION OF BPMS TEAMS

92%

86%

78%

82%

66%

68%

60%

77%

76%

72%

55%

55%

46%

28%

Project Managers

Domain Experts

Line-of-Business or Program Managers

End Users

Enterprise Architects

Solution Architects

Security Analysts

Business Process Modelers

Application Architects/Programmers

QA or Testing Roles

EAI Architects

Outside Process Consultants

Outside Technical Staff

Other Roles


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 ProjectManagers, Domain Experts and Subject Specialists, End Users, Line Managers, BusinessProcess Modellers and Application Architects (all involved in 75% or more of such teams).


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FIGURE 26: COMPOSITION OF BPMS TEAMS, COE ESTABLISHED

92%

92%

83%

83%

77%

75%

55%

92%

92%

67%

85%

42%

42%

0%

Project Managers

Domain Experts

Line-of-Business or Program Managers

End Users

Enterprise Architects

Solution Architects

Security Analysts

Business Process Modelers

Application Architects/Programmers

QA or Testing Roles

EAI Architects

Outside Process Consultants

Outside Technical Staff

Other Roles


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 standardstaffing 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 lowerusage of external consultants where a CoE has already been established.

Respondents were then asked to identify the Role Played by Internal Methodology andFormalized Methods In Your BP Programs and BPM Implementations.


41/68



FIGURE 27: METHODOLOGY USED TO SUPPORT BPM

22%

23%44%

11%

Trained in a Specific Set of

Methods and Continues to Use

Those Today

Standardized on an Internally-

Developed 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


Thus overall, respondents are actually fairly evenly split between those who are pragmatic intheir 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:


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FIGURE 28: METHODOLOGY USED TO SUPPORT BPM VS. APPROACH TO COE

22%

31%

30%

33%

20%

23%

62%

43%

28%

17%

44%

8%

20%

22%

47%

11%

7%

17%

17%

0% 20% 40% 60% 80% 100%

All

CoE

Internal Team

ConsultingArrangement

Developing CoE

Specific Set of Methods

Standardized on an Internally-

Developed Set of Methods

Variety of Informal Tools

Use Third-Party Tools and

Methodology


Again, as with the evidence in Figure 27, what is clear is that those organizations with a CoEalready 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 followingexternal training (31%). What is quite interesting is that it is those organizations that areseeking to implement the CoE model that are most likely to be using informal, ad-hocapproaches or rely on third party tools and methodologies. What is not clear is whether thisis due to a temporary experimental phase or if the desire to move to a structured CoE isactually an attempt to reduce this diversity of approach.

Although excluded from figure 28, those organizations with no plans to move to a structuredapproach 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 thisthey were asked to indicate their agreement with the following statements:

We Have Found Little to No Success With BP and BPM Initiatives, and Have NotReceived 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


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FIGURE 29: DEGREE OF SUCCESS IN USING BPM

16%

4%

3%

4%

23%

33%

32%

17%

42%

38%

32%

37%

26%

39%

28%

30%

23%

15%

26%

39%

28%

30%

23%

15%

0% 20% 40% 60% 80% 100%

All

CoE

Internal Team

Consulting

Arrangement

Developing

CoE

No Plans for

CoELittle to No Success

Initially Encountered SignificantChallenges

Discrete or DepartmentalSuccess, but Not Widespread

Results

Successfully Leveraged EarlySuccess Stories


Here again there is a clear correlation between implementation of a CoE and the level ofreported success in BPM implementation. Almost 80% of the organizations with a CoE reportsome degree of success. Whilst those who use an internal team or rely on an externalconsulting arrangement have rarely had no success they also consistently report that therewere significant early difficulties in BPM implementation.

Again, the position of those seeking to implement a CoE methodology stands out. Theyreport considerable problems with early set backs (almost 55%) but are obviously committedto BPM as a model. Those organizations that have reported no plans for a CoE styleapproach also report an even higher rate of early set backs (70%) and presumably havestepped back from their commitment to BPM as a consequence.


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2009 BPM Market Report Section 4: Investment Appraisal and BPMS


Section 4: Investment Appraisal and BPMS


45/68



FIGURE 30: INVESTMENT APPRAISAL OF BPMS

11%

11%

32%

37%

8%

ROI Analysis is Done

Periodically as Part of an

Ongoing AssessmentROI was Analyzed After the

Initial Pilot

ROI was Analyzed in Advance

as Part of Project Planning and

Cost Justification

ROI was not Analyzed for the

Project

ROI was/will be Analyzed Upon

Final Rollout


The respondents were then asked a series of questions as to their investment appraisal ofBPMS, how this was calculated and over what time span.

Thus, around 43% of respondents reported carrying out ROI either before starting or at theend of a pilot phase. However, 37% indicated they had not carried out any Return onInvestment Analysis and a further 11% intend to do this once the project is implemented.


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FIGURE 31: INVESTMENT APPRAISAL OF BPMS VS. APPROACH TO COE

11%

20%

16%

11%

9%

8%

11%

27%

13%

21%

22%

5%

32%

40%

38%

42%

28%

26%

37%

7%

22%

16%

31%

54%

8%

7%

13%

11%

9%

8%

0% 20% 40% 60% 80% 100%

All

CoE

Internal Team

Consulting Arrangement

Developing CoE

No Plans for CoEROI Analysis is Done

PeriodicallyROI 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


Again, as is perhaps to be expected, it is those firms who take a structured approach toBPMS who are also the most likely to undertake ROI either before or at the end of the pilotphase. This covered between 63% and 67% of those who either had established a CoE orhad a long term consulting arrangement. Those organizations with no plans to introduce aCoE were particularly likely to either not carry out ROI (54%) or to plan to do so at the end ofthe project (8%).

[Nathaniel the following section {figs 32-34} comes out of breaking the questionPlease Identify the Measured Financial Benefit Was Generated as a Result of the BPMInitiative, For Example "payback in 18 months" or "33% positive ROI in year 2": into 3sub-sections, time, rate of return and measure, and also doing a comparison to the vlimited data on original targets suggest not using this as so few responses and evenfewer actually match up to how success has been measured this really becomesuseful 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 variedsubstantively, as:

Respondents were then asked to identify the financial benefit they received from the BPMinitiative. Most expressed this in terms of ROI but a number of other measures such as IRRand cost savings were also identified. Most respondents suggested that the initiative had runfor two years or less (80%) as:


47/68



FIGURE 32: TIME PERIOD FOR RETURN ON INVESTMENT

< 1 year, 13%

1 year, 32%

1-2 years, 13%

2 years, 23%

3 years, 14%4 years, 3%5 years, 3%


The time period of return on investment shows some variation depending on what approachthe company has taken to setting up (or not) an internal Centre of Excellence.


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FIGURE 32A: TIME PERIOD FOR RETURN ON INVESTMENT AND APPROACH TO COE

11%

11%

7%

7%

13%

30%

22%

21%

29%

19%

15%

33%

21%

29%

6%

24%

22%

36%

21%

25%

13%

0%

14%

0%

31%

4%

0%

0%

7%

6%

4%

11%

0%

7%

0%

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

All

Use CoE

Similar Approach

Plan to set up CoE

No Plans

< 1 year

1 year

1-2 years

2 years

3 years

4 years

5 years


In the main, those organizations with a CoE structure in place were looking for quickerpayback periods. 88% of these firms expected payback in two years or less compared to80% of all respondents. By contrast only 63% of respondents who had explicitly rejected theCoE 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 PaybackCost Savings 5.68%

Customer Satisfaction 4.55%

Productivity 3.41%

ROI 79.55%Other PaybackMeasure 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.


49/68



FIGURE 33: ACTUAL RATE OF RETURN

18%

31%

4%

48%


50/68



FIGURE 33A: ACTUAL RATE OF RETURN AND APPROACH TO COE

21%

0%

25%

33%

26%

30%

38%

31%

42%

26%

48%

63%

44%

25%

47%

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

All

Use CoE

Similar Approach

Plan to set up CoE

No Plans

Under 25%

25%-100%

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 nocurrent CoE model, or no plans to adopt this approach also tended to expect the lowest ratesof 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.


51/68



FIGURE 34: ACTUAL RATE OF RETURN AND PROJECT LENGTH

10%

8%

0%

15%

30%

17%

0%

31%

0%

17%

100%

12%

30%

33%

0%

23%

10%

17%

0%

15%

20%

0%

0%

0%

0%

8%

0%

4%

0% 20% 40% 60% 80% 100%

Under 25%

25-50%

51-99%

100%+

ROI%

< 1 year1 year

1-2 years

2 years

3 years

4 years

5 years


Thus 46% of those who reported a 100% ROI had completed the project in a year or less andthis 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.


52/68



FIGURE 35: METHOD USED TO EVALUATE ROI

21%

7%

5%

8%

16%

3%

5%

4%

4%

8%

12%

8%

Customer Satis faction/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


Respondents were then asked to indicate what measures were used in the calculation ofReturn 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 eliminationof FTEs (12%).


53/68



FIGURE 36: EXPECTED ROI PERIOD

19%

13%

25%

22%

20% Project Must be Profitable in the

First YearProject Must Break-Even in

First Year

Positive ROI Required Within 2

Years

Positive ROI Required Within 3

Years

Other or None of the Above


In terms of planning future BPMS, respondents were asked to indicate the payback timeframe they expected to use, 32% expect the project to at least break even in the first yearand 57% of respondents are looking for a positive return in the first two years. Theseexpectations can be compared to past performance as:

Again those firms with a CoE in place are much more demanding in their future expectationsthan those with no plans to develop such a function:


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FIGURE 36A: EXPECTED ROI PERIOD COMPARED TO COE APPROACH

19%

23%

5%

28%

13%

13%

15%

20%

6%

13%

25%

46%

40%

39%

13%

22%

0%

20%

17%

30%

20%

15%

15%

11%

30%

0% 20% 40% 60% 80% 100%

All

Use CoE

Similar Approach

Plan to set up CoE

No Plans

Project Must be Profitable in the First Year

Project Must Break-Even in First Year

Positive ROI Required Within 2 Years

Positive ROI Required Within 3 Years

Other or None of the Above


What is interesting is to compare these future expectations, especially in terms of time spanwith 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 thecriteria set out in figure 36) and the time periods are broken into 1 year or less, 2 years, 3years or 4 or more years. This gives a table as:

Table 11: Correlation between future financial expectations and past performance

Response

1 year or less,

success

1 year or

less, Return

under 100%

1-2 years,

success

1-2 years,

Return

under

100%

3 years,

success

3 years,

Return

under

100%

4 years or

more,

success

4 years or

more,

Return

under

100% Grand Tota

Profitable in the First Year 54% 31% 0% 15% 0% 0% 0% 0% 100%

Break-Even in First Year 50% 50% 0% 0% 0% 0% 0% 0% 100%

Positive ROI Within 2 Years 13% 6% 31% 44% 0% 0% 6% 0% 100%

Positive ROI Within 3 Years 0% 0% 21% 21% 29% 21% 0% 7% 100%

Other or None of the Above 0% 40% 20% 0% 0% 0% 0% 40% 100%

Grand Total 22% 19% 17% 22% 7% 6% 2% 6% 100%

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 thefuture. Thus 57% of those who expect a positive ROI within 3 years had taken 3 or moreyears on previous projects (and more than half of them report a ROI below their statedbreak-even value). On the other hand, those organizations looking for payback in a yearhave in the past managed very quick completion even if their success rate has been a littlemore 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, overallthat 69% of their projects managed, at least, to break even.


55/68

2009 BPM Market Report 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, initiativesand 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


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FIGURE 37: AVERAGE FUTURE BPMS EXPENDITURE PATTERN

$85,016

$49,054

$97,742$102,323

$-

$20,000

$40,000

$60,000

$80,000

$100,000

$120,000

Software licenses Hardware Integration services Consulting services


Thus on average, firms are planning to spend over $100,000 on consulting services and lessthan $50,000 on hardware. This pattern of expenditure is roughly in line with figure 24 butthere are some significant differences.

Table 12: Changing Pattern of Expenditure?

Past Future

Software 21% 26%

Hardware 10% 14%

Deployment, Integration, and Customization Services 26% 29%

Process Analysis, Training and Consulting 41% 31%

Overall, the indication is that firms see a continuing need for substantial expenditure onsoftware and hardware, but a quite significant drop in the use of consulting services (some ofthis 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 yourtop priority for implementing BPM Software (e.g., which if successfully addressed would mostlikely enable you to invest)?


57/68



FIGURE 38: TOP PRIORITY FOR BPM SOFTWARE

10%

36%

5%

4%

5%

17%

13%

9%

Connecting multiple applications within the organization

(data-level application integration)

Enabling an enterprise-wide redesign of business

processes

Enforcing business rules while working with business

partners

Ensuring the integrity of transactions executed across the

Internet

Extending the life or reducing maintenance of existing

enterprise applications

Gaining the ability to define syntactically, depict visually,

and trouble-shoot business processes

Monitoring the performance of personnel and business

activities

Routing document according to defined business rules

and event triggers


In this case, quite clearly the most dominant request is for software that will enableenterprise-wide redesign of business processes (36%). Other popular requests include theability to set out and trouble shoot business processes (17%), monitor performance (13%)and link multiple applications (10%).


58/68



FIGURE 39: SOURCE OF FUNDING FOR BPMS

25%

5%

25%

3%

42%

0% 5% 10% 15% 20% 25% 30% 35% 40% 45%

CIO or IT Manager

External source (grant, parent company, business

partner)

Line, or Business management

Marketing

Senior management (other than CIO)


Funding for the next BPM Initiative was mostly expected from the enterprises seniormanagement as:

Thus in 67% of cases, future funding would come from senior management in general or theCIO and/or IT manager in particular.


59/68



FIGURE 40: SUCCESS METRICS FOR BPMS

21%

16%

19%

13%

12%

19%

Utilization of existing infrastructure and softwareassets

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)


Respondents were asked to indicate what set of metrics would be used to justify moving to aBPM architecture. The options included (and respondents could choose more than oneresponse):

Utilization of existing infrastructure and software assets (ability to implement servicesin language of choice)

Use of internal development resources (ability to deploy IT resources to otherinitiatives)

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 tofree up IT resources for other initiatives (16%). In the main, lowering costs as such, is not a

commonly used metric.


60/68



FIGURE 40A: SUCCESS METRICS FOR BPMS AND APPROACH TO COE

21%

15%

21%

27%

15%

16%

9%

18%

20%

9%

19%

21%

18%

16%

21%

13%

16%

14%

11%

16%

12%

19%

10%

11%

19%

19%

20%

20%

16%

20%

0% 20% 40% 60% 80% 100%

All

Use CoE

Similar Approach

Plan to set up CoE

No PlansUtilization 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)

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 this case, firms with different approaches to CoE had also tended to identify differentongoing success metrics. Those with an established CoE tended to emphasise cost andspeed of development as the key issues. On the other hand, those with plans to develop aCoE approach tended to place the stress on utilization of existing infrastructure and softwareassets.


61/68



FIGURE 41: FOCUS FOR FUTURE BPMS

15%

21%

27%

9%

9%

19%

0% 5% 10% 15% 20% 25% 30%

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


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 processModeling (19%). In general there is relatively limited focus on more structured approachessuch as Six Sigma or Balanced Scorecard methodologies.


62/68



FIGURE 42: PREFERRED PRICING MODEL FOR BPM INVESTMENT

16%

15%

6%

18%

16%

22%

6%

0% 5% 10% 15% 20% 25%

Open Source Licensing (free of license costs)

Price per CPU

Price per process managed or per single-

process application

Price per user

Service Level Agreement

Single, fixed price for development environment(plus annual maintenance fee)

Subscription fee based on processing volume

and usage


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%) andCPU (15%) are also popular.


63/68



FIGURE 43: FUTURE BPM DEVELOPMENT ENVIRONMENT

17%

13%

8%

5%

9%

8%

10%

3%

2%

9%13%

1%

3%

Windows Server

J2EE

Unix Server

SaaS

Windows Clients

SharePoint (MOSS 2007) Clients

Web Clients (other than SharePoint)

hin-clients (non-Windows; not pure web)

IBM DB2

MS SQL ServerOracle DB

Sybase

Other DBMS


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 allorganizations.

A number of firms indicated that they had not yet invested in specialist BPMS software.


64/68



FIGURE 44: REASONS FOR NOT INVESTING IN BPMS SOFTWARE

8%

16%

14%

17%

20%

25%

Expect Current Capabilities to be Absorbed and/or

Offered by the Platform, Such as SAP or

SharePoint (MOSS)

Lack of Internal Motivation (no compelling need)

Lack of Internal Skill Set Needed to Support a BPM

Initiative

Unable to Demonstrate a Compelling Business

Case

Unable to Find Project Sponsor (desire is there,

but no funding is available)

Utilizing Workflow Management Inside of ERP

Software or Another Packaged Application

(Financ ials, HRMS, Supply Chain, etc)


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 widerplatform 8%) are sufficient for their needs. A further 33% indicate that they can see nocompelling need for such an investment. The balance would like to adopt more specialistsoftware, but find they either broadly lack the skillset to use it (14%) or cannot find a fundingsource (20%).

As noted in figure 42, some 16% of firms already use open-source software to reduce theirlicensing fees.


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FIGURE 45: CONSIDERATION OF OPEN SOURCE SOFTWARE

53%

42%

"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-sourcesoftware.

Other cost reduction measures are also under consideration.


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FIGURE 46: EFFECT OF DOWNTURN ON APPROACH TO IT SUPPLIERS

16%

8%

6%

5%

33%

6%

25%

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


Although very few respondents indicated that there would be no change (16%), the responsevaried quite considerably. Most placed greater emphasis on value for money (focus more onsolutions aligned with our existing skills and infrastructure 33%) but a significant numberindicated they would reduce the range of suppliers they dealt with (25%). However, incontrast, a very small number of respondents indicated their preferred strategy would be toextend 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.


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Table 13: Different Approaches to Supplier Selection Strategy?

ALL

ReviewOpen

Source

The current economic environment will have little affect on our approach to IT suppliers 16% 18%

We are more likely to buy from larger vendors with dominant market position 8% 7%

We are more likely to buy from smaller vendors with cheaper offerings 6% 7%

We will expand the number of suppliers in order to introduce greater price competition 5% 5%

We will focus more on solutions aligned with our existing skills and infrastructure 33% 30%We will focus on commodity, COTS solutions requiring less specialized skills to supportin order to reduce the cost of maintaining our existing systems 6% 9%We will reduce the number of suppliers (consultants, resellers and vendors) to a coregroup based on existing relationships and past performance 25% 24%

Thus the interest in open-source, is not just another form of cost-cutting. Those firms arequite likely to indicate that the economic environment will have little effect overall (18%) butare slightly more likely to adopt an overall approach that will reduce costs than otherorganizations.


68/68


FIGURE 47: MARKET MINDSHARE LEADING BPM SOFTWARE BRANDS

15% 14%

6% 6% 5%2%

11% 11%

7%4%

9%

2%

11%9%

2% 7% 1%

8%

Oracle IBM Lombardi Microsoft Tibco Appian


Finally respondents were asked to identify what software firms they perceived to be leadingin the development of the BPM Vision and to rank up to three suppliers as first, second andthird. 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 mentionsin 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 wereomitted.

Sceptics will decry this type of question as merely a popularity contest, and in fairness that istechnically correct this provides only a measure of who has succeeded in getting theirbrand into the global marketplace. We have found, however, that these answers of who youperceive to lead are invariably more honest and accurate than seeking an assessment ofwhat is currently in use. Therefore this Mindshare assessment is at least a valuablereference point in examining market currents, and arguably is more accurate than more

traditional, quantitative market share measurements.

Third Place Ranking

Second Place Ranking

First Place Ranking

Documents

2009 BPM Market State