There are many business process management (BPM) tools on the market today for enterprise CIOs to choose from. The selection process should begin with defining both your business and technical requirements -- reviewing the vendor options should be the last step.
In this podcast, Mike Kavis, an independent consultant and chief technology officer at MDot, offers tips for identifying your business and technical requirements and how to get the most out of your vendor research. Kavis has more than 23 years of IT experience, including 12 years in leadership positions. His areas of expertise include IT strategy and planning, organizational change management, BPM, service-oriented architecture, enterprise architecture, Web 2.0, cloud computing, business intelligence, outsourcing and turnarounds. In addition, he is a freelance technology writer, researcher and frequent conference and corporate event speaker.
Hello. My name is Karen Guglielmo, the executive editor for SearchCIO.com, and I'd like to welcome you to today's expert podcast on evaluating business process management or BPM tools.
What is the first step in selecting your BPM tools?
Kavis: The first step is to clearly define your requirements -- from both the business and technology sides. There are a lot of tools out there and they have a lot of functionality, but you really need to get the tool that matches your requirements. Some of the questions you need to ask include are you going to be doing business rules, because some tools have extensive use of business rules and some don't. You should also ask yourself who is going to be using the modeling tools -- is it the business people or the IT people? That will make a difference on the type of tool you select. How far are you going to take business processing? Are you going to do simulations and 'what if' scenarios? These type of features can separate one tool from another. How many features do you need? Can the open source alternatives meet all your needs and save you some money? What are the skill sets of the people you have in-house? There are a lot of questions you need to answer before you dive into picking tools.
What is the BPM tool market like today? Are there many choices out there for enterprise IT shops?
Kavis: There are a lot of options. A few years ago when I was selecting tools for my organization, we were afraid of a lot of companies getting bought up because there were a lot of pure players in the market. But the irony is that the big guys got bought up, like the BEAs, and the pure players like Lombardi and Savvion and Pega are still out there and they're not getting bought up. This I find interesting because there are a lot of industries today getting bought up. You see a lot of the rules tools players getting bought by the bigger players. So you end up having some of the big-stack guys like IBM and Oracle and some of the pure players like I mentioned.
You also have a nice selection of open source alternatives like Intalio, jBPM and WSO2. There are a lot out there to choose from. There's also a lot of hype about the integrated stack. You'll hear vendors tell you that if you already have enterprise service bus and you're already doing SOA, you might as well buy the BPM tool from the stack vendor. I wouldn't buy into the hype because most of the stack vendors basically bought a pure player and they're not any more integrated as any of the other tools. Just be careful about the hype out there and do your homework.
What about cost? How much are companies in general spending on BPM tools?
Kavis: That's a good question, and that's all over the place as well. It really depends on the scope of what you're trying to do. I've seen some companies, myself included, leverage open source technologies and spend very little -- basically pay for support and services and spend very little on tools. At a previous job, we spent $200,000 to $500,000 on licensing, support and training. That doesn't include professional services and actual development. Some of the bigger corporations are spending more than $1 million. So it depends on the size of the company and the scope of what you're trying to do.
What specific tips can you offer on how to make the most of the vendor evaluation process?
Kavis: I have some good recommendations for this. A lot of companies just go to the Gartner Magic Quadrant or Forrester Wave and go to the upper right corner, find two or three vendors and go. This isn't good advice. Those are tools, and they should just be one of many things you should look at when you're evaluating these software tools.
I recommend to get out there and leverage social networking tools and read some blogs from people who have done it [BPM]. Go to BPMInstitute.org and read some of the community content they have out there. Get into social networking, reach out to your peers and people who have been through these processes and can tell you what the vendor marketing slides don't tell you. Also check out client references, user groups and conferences.
You really need to narrow it [your choice] down to three to four vendors. You should create a weighted matrix that says here are the requirements, here are the ones most important and then start scoring these guys. Then send a detailed RFI out to each of them. It sounds like a lot of work, but there are tools on the Web to help. You can pay $250 for a template with 80% of what you need. You just then need to refine it. Try to keep it to three [vendors] -- otherwise, it's a lot of work. These completed RFIs come back and they're 20, 30, 40 pages long.
Once you get it to three [final vendors], you process the information. The real important part is an on-site demo or proof of concept. All the vendors have great marketing slides and PowerPoint presentations. It all looks fantastic. But the proof is in the pudding. What I've done in the past, is to define a one-day proof of concept, which actually took a small process and made it real to our business. Each vendor came in on their own day and had to prove that they could go through and knock this out in a day, and it was as easy as they said. We also had them stub out calls to some services in our customer environment. This was a big eye opener for us. The leader from the business standpoint came in and fell flat on their face because they had nice marketing content, but when it came time to do the work, they couldn't get it done in time, couldn't connect to our services. While one of the other tools came in and blew them away.
So you really have to look past the marketing slides and actually get them to roll up their sleeves and do stuff in front of you. Don't let them do it off-site and bring it in on-site. That will help you determine who has the best tool for your environment.
I have one final question for you. What is the average ROI of any BPM tool implementation?
Kavis: That's another tough question, and again it's all over the place and again it depends on the size and scope of the project. Some BPM projects are departmental in scope, and they're just trying to fix some form processes or some HR processes. But other ones are game changers. You take an organization that really has four operational processes, and bring in BPM and totally revamp and transform the organization on the way they do things. For those, I've seen eight- and nine-figure ROIs based on those type of projects. The challenge there is those are huge projects that require transformation, and they are very hard to accomplish.
The key is to align the ROI with the business deliverables. I've seen some organizations do BPM for the sake of technology. You really have to do it for the sake of the business. Where you really see ROI is in increased throughput, increased sales, reduction of costs, limiting waste, customer satisfaction, employee satisfaction and, in some cases, competitive advantage. If you're, say, in the insurance industry and there's so much competition -- just by improving your business processes can give you competitive advantage over your competition. Some of those things are hard to measure. How do measure competitive advantage? If it's done right, BPM can bring back six-, seven- and even eight-figure return on your investment.
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