Wednesday, September 30, 2009

SMBs and the BPM vendors' dirty little secret

What's the hidden trend in the business process market? Targeting the benefits of business process management at small and medium sized businesses (SMBs). I strongly believe that the SMB market is underserved by the traditional BPM suite vendors, because their business models don't allow, and because they have industry analyst rankings to chase. This is a shame, as in my opinion there SMB market for real process improvement ranges up to a level of $250 million companies. Not so small really.

One of the big issues with traditional BPM software is just too expensive, or the cheaper stuff requires just too much custom software development to be appealing to mid-sized businesses. BPM tries to be 'everything to everybody', rather than 'enough for you'. It is impossible to build a generic suite that doesn't need a huge investment in custom software development to glue it together in any way you want.

Want to know the dirty little secret that really proves this point? If it was truly easy to deploy BPM, why is it so rare for BPM vendors to install their own software in-house. Is it too big and complex for what they really need, and they can't free up the resources to do the work? Or maybe it doesn't offer them the value to justify the effort?

Brian Reale has an article on ebizQ today that talks about business process improvement, or workflow, from an SMB perspective, and his thoughts mirror mine:
Every business manager instinctively knows which processes are inefficient, and probably has a vision of how they ought to work in an ideal world. But there's also a sense that a lot of effort would be required to make this happen. Three-letter acronyms such as 'BPM' recall other three-letter acronyms, such as ‘ERP’, conjuring up unappealing thoughts of expensive, months-long implementation projects.

Brian goes on to list six items that are important points to pay attention to when selecting a product for your new workflow implementations. I do feel that these are very much centered on what his open source product offers, though we all skew our writing to our products, so he is forgiven for a couple of the points. The two that I can really buy into though are these:
1) Flexibility. Choose a tool that lets you create the documents and processes that you need, rather than one that requires you to change your ways to fit with what it provides. For example, does it let you create, edit and format your own forms, or does it just provide standard forms templates?
4) Ease of Use. A workflow automation tool should not require specialist technical skills to operate. Look for one that’s easy and intuitive to use and that can get you up and running quickly without extensive user training. If it’s a web-based tool, make sure it’s properly architected for a web environment, and not just an old client/server package with a web front end. Check that help and support are easily obtainable.
If these truly are features of his product he has picked well, as I believe they are essential for SMBs, so companies don't have to spend more on implementation than the product itself. Also, Brian's points do help to guide buyers away from Big Blue's, 'this is not really an IBM product, so don't run away' web-based offerings; and the other enterprise software vendors out there doing the same thing with infrastructure products with a little lipstick.

I have been working on some similar concepts for a product that is inherently easy to get up and running. Consected is an online (SaaS) system that helps businesses of any size to run and automate workflows and business processes that help their employees to improve the way they deliver, organize, find and escalate work without requiring a complex software to be developed or installed.

Consected, and Brian's company, Colosa, have similar aims for their customers. Ease of use, flexibility and a cost that can be stomached by SMBs. Beyond that, I'm sure we are very different, but that's a good thing. There is room for everyone in the vast SMB market that the traditional vendors choose to ignore.

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Chris Adams, VP of Product Management and Product Marketing said...

When I read stories about the difficulty of BPM penetration into the SMB space, I often see arguments based on BPM Suite (BPMS) functionality and BPMS pricing. I think both of these points are valid, but not unique to the SMB space. Large scale companies want the same “ease of use” and “flexibility” in a BPMS that SMBs do. And while large scale companies, on a whole, have bigger pockets, BPMS purchases by the large scale companies are not always at the enterprise level. As such, many of same pricing and licensing constraints are encountered by the large company’s individual department that is considering the BPMS purchase.

I argue that the single most constraint for SMBs is time. SMBs can be slow to adopt a BPMS because of the fact that everyone in the SMB is “heads down” in executing their day-to-day processes just to maintain their business (even if their processes are not efficient and/or cost controlling as they would like them to be). If the SMB spares even one resource to commit to a BPM initiative, that is one less person involved in operating their mission critical processes today. Over and above SMBs needing a flexible and powerful BPMS, SMBs need help from the BPMS providers themselves to augment their limited available resources. BPMS providers need to provide a full BPM solution to the SMBs which should include:

• Centers of Excellence (staffed by the BPM provider) which consults into the SMB

• Flexible E-Learning programs where SMBs can regularly and routinely learn how to leverage the BPMS

• Process Templates (which provide pre-built and “canned” common process solutions which are “plug and play”)

• Virtual, Hosted, and SaaS BPMS solutions which allow the SMBs the avoidance of having to invest time and money into hardware and on-premise software

• Online BPM Communities, where SMBs can share knowledge, processes, best practices, and information

Phil Ayres said...

Chris, you have articulated some great points here. You are completely right about the departmental purchases of process improvement technology. Not many global companies have implemented their precious BPM suites in more than a couple of departments. Perhaps this is leaving huge potential for the BPM vendors, but it is also telling about the technology itself. What makes it so hard for organizations to adopt technology that is supposed to be so good for them if the ROI really does add up? So, let's not leave the departments of large enterprises out of the discussion.

Your point that that the biggest constraint to SMBs is time, seems reasonable. For that, the complex methodologies for BPM projects, involving business analysts, software developers, IT and half of your valuable operations resources just don't fly. Honestly if I was a department head and you told me that I needed a project manager, process analyst and at least one software developer to put in place an expense claims solution or HR employee onboarding process, I'd laugh. I don't neeed to be a lean, mean AP or HR machine, I need to make sure that work gets to the right people and can be found when needed, with minimal user training. Saving 5 minutes a day for each employee in HR is not worth the complete hell of a software project for 3 months (and all the people involved will back me up on that).

For my critical processes, the ones that make my company unique, sure, let's spend a little more time looking at them. My opinion here is that most organizations need to see how a system, any system, will affect their operations so that they can understand really where to focus their efforts in more detail. When consulting on BPM strategy I push this point with clients routinely when they are implementing BPM for the first time. They push back, because they want to really feel like big change is happening with the software investment they made. But in phase two they thank me, because they realize that some of their initial ideas were misplaced and would have been expensive unused features.

So, the five items you speak about are important for BPM. Though I feel that Centers of Excellence and E-learning give the impression of 'big software' and 'business re-engineering' and probably put a department head or SMB buyer on the defensive from the start. Your experience may well be different and I'd love to hear about it.

markinson said...

Till date I hardly knew about the job profile and the kind of work done by SMPs and BPM vendors.Reading this post I got to understand the clear image of their work profile and my conclusion come to the point that SMB market is under-served by the traditional BPM suite vendors.
Business Process Management