Ever worry that you company doesn’t take the issue of “business process management” (BPM) seriously?

If you do, consider this: Microsoft’s Communications Sector (CS) organisation – which sells Windows to Telcos and ISPs – only set up its own business process management system three months ago.

Microsoft CS’s recent adoption of this simple business management and monitoring process testifies to how warily even the most forward-looking companies are allowing modern business process management to encroach on their operations.

Business process management is just one method of benchmarking product and system development so that work items are identified and tracked as they are created. Microsoft CS uses it to ensure that the package of services, products, documentation, tech support, marketing and licensing that it rolls into a “solution” are all being created on time and meet a given solution’s specific requirements.

It’s simply project management on a corporate scale. But you might want to start putting IT budget aside for it. That’s because business process management is one of the new growth areas in ERP. Part of a triad that includes “business performance management” – where you track delivery times, customer satisfaction, etc – and the vaguely-named “business intelligence” (BI) – where you track customer perceptions.

Business process management has not made household names of any of the established players in this business – MAPICS, Metastorm, BizFlow, QPR – but in manufacturing, where managing supplies is critical, it’s visibly distorting ERP revenue numbers.

Cambashi consultant Dan Roberts says you can treat giant SAP’s troubled business as a proxy for what is going on in the traditional ERP market. Its percentage sales changes for each of its ERP market sectors gives a reasonably accurate snapshot of the changing sales in the industry:

Sector 2002-2003 sales change (%)
Traditional ERP (HR and financials) -14
Customer Relationship Management -7
Product Lifecycle Management -8
Supply Chain Management +3
Supplier Relationship Management, BI, Marketplaces +5

You can’t quite run to your CFO with these numbers. According to Roberts you first have to process them for US$/Euro currency fluctuations. That is because SAP derives a lot of its sales revenue in US$ but reports in Euros. It means that the real numbers, and therefore the overall ERP business, is probably healthier than these numbers show.

The second adjustment is more critical. It is that software vendors’ traditional ERP business revenue is a mix of new license sales, from maintenance and from the sale of add-ons. A consequence of that is that yesterday’s successful new license sales can generate maintenance and add-on business today, while the slow-down in today’s new license sales will have a knock-on effect tomorrow, when those non-sales fail to create maintenance and add-on sales.

In other words, traditional ERP revenue growth may yet decline but supply chain management (SCM) is growing. Until last year’s sales revenues are announced it’s difficult to finger exactly what is driving the SCM talk. Roberts points to the buzz surrounding RFID and the Wall Mart effect as two likely driving factors.

“If you supply Wal-Mart then you play it Wal-Mart’s way,” he says, “And that means supply chain management.” More interesting are the rumblings around business process management, business performance management and BI in the service industries. Those rumblings don’t yet show up strongly in SAP’s numbers but they are growing louder.

“That’s my gut feel,” says Roberts. “Well, at least in terms of hype.”

Obstructing corporate adoption of software systems to process and performance management are two obstacles: the corporate preference for cost cutting in the face of current economic uncertainty and the tough challenge of applying metrics to many business performance concepts. After all, if you know you can’t measure success, why spend the money?

“Corporate performance management is an area that has not been taken up properly by the big guys,” Roberts says.

But ERP vendors recognise that there’s an opportunity to make it easier for them. SAP’s introduction of NetWeaver and Xapps suggests that the frontrunner of these concepts will probably be corporate process management. That’s because there is a relatively easy set of metrics available by which to judge success or failure.

Those metrics measure the time required to notice change, plan a solution and implement that solution. And, of course, to keep processes on-track during solution development. “Put a GUI on it so that instead of spending six months re-engineering, you spend a weekend on it with a couple of consultants,” observes Roberts – tongue only partially in cheek.

For most corporate IT managers, BI and process management remain so close to the edge of the radar that they’re hardly denting lunchtime conversation, let alone dominating it. However, BI is on the screen in Redmond, where Microsoft coders are busy writing a business intelligence solution that will probably be integrated into Microsoft Office. That’s code from a company that is still trying to figure out how to integrate business intelligence into its own solution planning mechanisms.

And that highlights the key questions for managers of IT budgets: how do you integrate new software classes like these with your existing data and how would the software that does it work? Today, you pay expensive consultants or you don’t do it. So few do it.

The Business Process Management Institute (BPMI) thinks it may have the answer to that. It’s promoting the RDBMS of business process management - the Business Process Management Stack (BPMS). BPMI co-chairman Howard Smith says the stack would contain new and existing ERP software equipped with interfaces to a universal language – the BPMI’s cross-software Business Process Query Language (BPQL).

BPQL would, ultimately, enable disparate, multi-vendor software tools in such a stack to talk to each other and that has a big implication. Says Smith: “Using BPQL, business process process-oriented applications will be able to directly manipulate whole processes – not just discrete components of a given business process.”

Before that can happen, many other elements have to be in place: companies have to understand the concepts, map them to their own businesses and work out how to specify software to enable it.
Given that CRM and business performance management have barely established a toe-hold outside of the biggest enterprises, all this work may turn out to be hype for a patchwork of mini-ERP tools.
But Roberts’ quip about simply adding a GUI is not completely facetious. Taking Microsoft’s recently launched CRM as an example, he notes – as have many that have used it – that not being revolutionary doesn’t mean you won’t spark a revolution.

“But when Excel came out it wasn’t necessarily the best spreadsheet, but combined with Word and PowerPoint, the average was better,” he says. “MS CRM is at that sort of level – and people will use it simply because it is another tab on your interface.”

In other words, just making the software available gets vendors to version one. And version one gets the users thinking; their thinking provides all vendors with user feedback – and the software develops from there. Until relying on software to rework your business processes is as commonplace as it is to use Excel to tot up the babysitter’s weekly pay.