Is the BPM Industry stuck in no-man’s land?

I have noticed three constants in my 14-years in the BPM/workflow industry. First, every BPM market forecast prepared by reputable firms has estimated a market size of anywhere from $1 to $3 billion, and a growth rate ranging from 10% to 20% per annum. Even if I take a conservative forecast and assume that the market was $1 billion in 1998 and growing at 15% per annum, it should be at least $4 billion today. But the most recent forecast continue to put it in the $2 billion range. So where does all the growth fizzle away? Second, every BPM vendor and analyst can provide a number of actual case studies of BPM deployments that demonstrate remarkable ROI and productivity benefits. And it is relatively easy for senior management to understand why BPM can deliver such results. Yet the penetration of BPM in organizations is still small and I would venture to say that less than 10% of processes are automated despite all the ROI and productivity proof points. Third, every year BPM vendors claim impressive growth and publish a roster of new customers. Yet most pure-play BPM vendors are relatively small companies and none have been able to go public despite the claims of growth and the fact that many of them have raised tens of millions of dollars in venture capital.

It seems to me that the BPM industry is stuck in a no-man’s land. The pure play vendors neither have the flexibility of really small companies, nor the resources or clout of large companies. While BPM has tremendous potential, the challenges which these vendors face are very significant which makes growth akin to progress in trench warfare. First, BPM sounds glamorous, but it is not easy. This is because human beings work in extremely complex ways. Developing software that caters to all these ways is not easy. The “human interface” of BPM is complex and challenging. Second, the IT environments in which BPM has to thrive are very complex, varied and in constant flux. BPM cannot be successful without seamless integration with the rest of the IT infrastructure. The “application interface” of BPM is complex and challenging. Third, as the size and impact of BPM projects becomes larger, buying decisions gets escalated to executive leaders. Executive leaders prefer to deal with large platform vendors such as IBM, SAP, Microsoft and Oracle, and this preference limits the opportunities of pure play vendors. The “market interface” of BPM is also complex and challenging. 

I believe that pure play BPM vendors are stuck in the no-man’s land because of the challenges of the “human interface”, the “application interface and the “market interface”. However, I am still optimistic about the market and its opportunities.  I am optimistic because extreme focus and technology changes generally benefit the smaller and more agile companies. We are again going through a period of technological change that can be leveraged by the pure play vendors. Web 2.0 provides an excellent opportunity for pure play vendors to attack the “human interface” challenge. The increasing maturity of SOA provides an excellent opportunity to address the “application interface” challenge. And finally, time, relentless focus and persistence provide the means to address the “market challenge”.

What do you think?

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5 comments so far

  1. workflow on

    I think perhaps the problem lies not so much in the tools but in the practitioners that deliver solutions using the tools. We currently are having a lot of trouble finding enough skilled people with relevent experience. You can create installation disk after installation disk but unfortunately people who are skilled on the implementation side and understanding how businesses work and how to improve them do not grow on trees.

  2. Rashid Khan on

    Yes, I agree that the lack of skilled people is a constraint. However, I think, the lack of skills is a consequence of the “human interface” and “application interface” challanges that I talk about. As an extreme example, we do not have a lack of skills in the number of people able to use an Internet browser or a word processor. Why is that? Because the “interfaces” of these applications are easy. To realzie its true potential, BPM has to become as easy as the browser or the word processor to deploy and to use. That is because it has to be used by a very large number of users. So the challange is for the vendors to constantly focus on making it easier intrinsicly, not by dumbing it down.

  3. Linda Mason on

    The challenge of adopting BPM successfully has more to do with adapting behavior than solving technical challenges. The difficulties in addressing the challenge are two-fold in nature: BPM vendors and implementers have confidence that the BPM tool will, by virtue of its functionality drive organizational compliance and the clients, in what is invariably a false economy, are resistant to the idea of investing the the change management activities and services necessary to move the organization, in total, to full adoption of a new operating model. without this commitment internal resistance to change is often stronger and more persistent than the relationship of BPM vendor with client sponsor so initiatives are scaled back in the face of discord, or abandoned altogether and the initial promise of success that could lead to further adoption is compromised making subsequent BPM projects all the harder to justify and sell.

  4. Rashid Khan on

    Linda, you have made a good observation and I agree with you that this is another factor that impedes the growth of the market. Most BPM vendors are more experts in technology and less in change management. And BPM is trying to fundamentally change the way people work, which means there should be a strong emphasis on change management as you point out.

  5. [...] of assesing the global market let me refer to the point made by Rashid Khan. It has special value because until recently he headed a well-known BPMS vendor Ultimus, and now [...]


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