When Bob Farrell joined business process management (BPM) specialist Metastorm in mid-2002, he was pretty sure his timing was right, or would be eventually. A former president at enterprise application integration vendor Mercator, Farrell had also worked as COO at Dataware Technologies, which built algorithms for unstructured content search. But it was watching technology interface with people and the way they work that caught him emotionally. "I got really excited about the ability to use a combination of information in the organization as a way to drive new business, to drive agility and respond to changes in the market." Though still a subculture to constrained minds, BPM is now going mainstream, and Farrell plans to grow his once $5 million business to $100 million by 2008, as he explained to DM Review editorial director Jim Ericson.
DMR: How does it feel to a "process guy" to see business process management (BPM) gain traction in our data-centric world?
Bob Farrell: I think evangelists like you and I have made businesses stop and say, wait, data is a snapshot of information at a point in time. Data doesn't really allow us to run anything or do anything. The progressive customers we've talked to look at how they manage an activity and support it with content, with structured data, with services, with a bunch of other things including human activities, all in one model. There are great companies out there doing this that haven't abandoned data management; they still view their data as an asset, but they view it as an asset among many assets within a structure of a process model.
DMR: Hasn't part of the problem been that IT projects don't account much for human-to-human and human-to-system interactions?
BF: Exactly. Just think about when you're checking in at the airport and you want to switch flights, switch seats or upgrade yourself and the person you're traveling with. It can be amazing to watch the number of keystrokes that go on behind the counter. You ask yourself why that is and why certain airlines make it easy and others make it difficult. I think the answer is if you take a process-centric view as some airlines have and orchestrate the human activities and integrate the data and system activities into one process stream, you can really improve efficiency and ideally increase revenue. Certainly, checking inventory on a flight is a database call, and you're getting the results back; but the automation of the process has to guide the person to do that - and perhaps it even happens without them knowing.
DMR: Suddenly, enterprise software vendors, integration software vendors, content management vendors seem to be offering BPM modeling. How does a pure play like Metastorm fit into the mix?
BF: I think there are four approaches. The enterprise app vendors are deploying workflow at a proprietary level within their app environment. They'll talk about their ability to have independence and the ability to integrate with other applications, but the reality is, at best, they have workflow. The second approach is the EAI guys, the webMethods, IBM and BEAs of the world who take a plumbing approach. At Mercator we'd have said we have BPM, but we didn't; we had business process integration and a lot of data mapping and low-level stuff that drives processes. The third box I would call the document management approach, like FileNet or Open Text. These guys take a document-centric approach to managing processes, and it can be a successful way to go. The fourth box is pureplays like Metastorm; we're using process management as the center of the universe and incorporating all of those things.
DMR: I've seen organizations doing process modeling or analysis but not a lot seems to come out of it. Why is that?
BF: We always get a little worried when we get into a situation on the business side where someone just wants to do modeling. We don't belittle it, but modeling needs to result in something more than charts and diagrams on the walls. About 60 percent of the situations we walk into come through the business, so designers in the BPM space are tools used by business analysts to outline the business using their own nomenclature. Once the business takes its pass through the model, you need to involve IT because that model is definitely going to have integration points on it. It will say, "Get this piece of data out of DB2, or go grab this from SAP." A business guy can draw a block on a diagram but the integration behind that is typically complex. Our modeler has wizards to generate the programming to set that up, but you can't do anything without IT providing the right security levels and the data integrity. It really requires a tight marriage of business and IT, and we have not seen any project of significance done without having both camps as part of the solution. On the other hand, you may have seen a study from Gartner that says 95 percent of all BPM projects have been deemed a success, versus 20 percent for all IT projects. The reason for that is that a BPM project isn't an IT project. So as much as IT people need to be involved, it's still a business-driven project, which will generate more success than failure.
DMR: Has that led successful clients to step up to an enterprise approach to BPM?
BF: Most organizations need to take an incremental approach if for no other reason than it's a huge cultural change for people to think in a process versus data-centric way, and we've had to adopt our selling model to fit this. You can't implement a BPM project at the top of an organization with an enterprise perspective overnight. What is different compared to five years ago is that initial process projects are much more mission critical. Five years ago everybody would start off with some human resources management project or the like. Nowadays people are saying, we're a retail organization. Our big pain is new store openings; we're in hyper growth and we need to open five stores a day in order to make our revenue goals. So they'll tackle the process of acquiring new real estate or signing up new franchisees. Then they'll take it to the next level and add the construction problem. We have customers with hundreds of processes implemented; in some cases like Wilmington Trust or Channel 4 in the UK, their entire businesses are run off of Metastorm BPM. Last year,
we had more large deals than we had in the prior couple of years combined because we had a number of customers make it through the funnel and graduate to having enterprise licenses and implementations at the enterprise level. It takes some time, and you have to show proof points along the way - not just on the balance sheet side but on the innovation and revenue side.
DMR: Why do business process and business intelligence remain so disconnected?
BF: When you look at operational BI, you're running a process; you're collecting metrics and thinking about change. To me, that is process intelligence. We see performance management as something that can be driven on the back side of BPM very significantly. Records and case management, business rules; all these things are converging and need continuous improvement. All these things are core; they have to come together over time. We'll be investing and expanding our suite to be there as we go forward.
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