BPM: Trend Towards Many More Projects, but Smaller and More Focused

The Business Process Management (BPM) software sector is alive and well.  But there are significant differences between the BPM market of today and the one of even just five years ago.

Technologies like cloud computing and SaaS have changed people’s perspectives and expectations about BPM.  While BPM projects tend now to be smaller, there are more of them.  The total aggregate spending across all BPM projects is up.  Gartner forecasts that 54 percent of organizations will increase their spending on BPM by at least 5 percent in 2011 and 20 percent of organizations will increase spending by more than 10 percent.

Factors that are driving the move to smaller BPM projects include the following:

Lower entry costs. This may be the biggest reason for the move to smaller-scale BPM projects, and the SaaS model is what is enabling the lower prices.  SaaS eliminates the need to make huge one-time investments in BPMS software, and the lower price point and self-service nature of SaaS software allows line-of-business managers to by-pass IT and directly fund and oversee BPM projects specific to their business process.  In fact, Gartner finds that 66 percent of BPM projects today are being funded by line-of-business operations.  Teresa Jones, principal research analyst at Gartner, said that “Many of these budget increases are driven by the fact that BPM is focused on improving business outcomes and explicitly meets the objectives of many organisations’ return-to-growth strategies.”

Focused Objectives.  The recession has caused organizations to be very focused in how they choose which processes to automate and improve.  Garnter’s Jones commented that “Many organizations do not aim to achieve full process automation throughout their enterprise; most people improve process by process.  The survey findings indicate that users might want some BPM software capabilities but not necessarily a full blown BPM [suite]. Understanding the real benefits and how to measure them will help organizations create better business cases and get the expected business results.”

Gartner found that, on average, organizations are now making initial investments of somewhere between $100,000 and $200,000 on BPM projects which is significantly lower than the pricetag for implementing full BPM software suites.