The benefits of business process management technology are gaining the recognition of both vendors and corporate users, with one estimate putting the BPM market at $1 billion this year, up more than half over 2001.

But the market needs a boost of information about how it can positively corporate operations before reaching its real potential, analysts say.

To compete in today’s economy, business managers must have the flexibility to adapt to market changes and new competitive strategies, such as switching sales channels. Their IT staffs, meanwhile, must be able to support such nimbleness without running into system bottlenecks.

Simply integrating enterprise applications is not enough, warns Eric Austvold, an analyst at AMR Research Inc., Boston. Enterprise application integration is about moving data among applications, but it’s not about improving business performance, he says. That’s where BPM comes in.

A growing number of vendors are offering strong BPM technology, though the market is still developing. The BPM community includes so-called pure-play vendors such as Lombardi, Savvion, Fuego and Intalio, as well as established EAI vendors, such as webMethods, Mercator, Tibco and Vitria, who are adding BPM technology to their offerings. Microsoft is expected to be a major player in the long term with its BizTalk platform.

But choosing among vendors may not be easy. The newer players like Lombardi and Savvion appear to offer more application functionality and ease of use for non-technical business managers – a key ingredient of BPM – but actual adoption of their technologies is still quite limited – less than 100 customers, according to Austold, who wrote an AMR report on the BPM market last year.

Meanwhile, the established EAI vendors are moving to develop their own BPM market differentiation. Mercator, for instance, has begun incorporating BPM technology from Versata and expects to develop a market edge among companies heavily invested in electronic data interchange.

“We were late to the table” with BPM, says Jonathan Cohen, vice president of corporate communications for Mercator, adding, “When you can’t say you have a robust business process integration capability in your product basket or in your road map to be able to offer it soon, the market is conditioned now to think that you’re a vendor that can’t provide true integration.”

But with Versata’s BPM technology incorporated into Mercator data integration technology, which includes a forte in integrating with back-end legacy and EDI systems, Mercator sees “a very strong market going forward,” Cohen says.

Despite the expected growth in the BPM technology sales, the corporate world at large could use more information about how it fits into business strategies. A major challenge for all BPM providers going forward, says Austvold, is to do a better job of educating the market – business managers as well as IT directors – about the value of BPM. “The BPM community in general has to convince the market what BPM can do for them,” he says.

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