LIB-2002-08-3

8/13/2019 LIB-2002-08-3

1/31

8/13/2019 LIB-2002-08-3

2/31

Copyright 2003 Howard Smith and Peter Fingar

About this BookWhile the vision of process management is not new, existing theories

and systems have not been able to cope with the reality of business proc-essesuntil now. By placing business processes on center stage, corpora-tions can gain the capabilities they need to innovate, reenergize perform-ance and deliver the value todays markets demand. This book heralds abreakthrough in process thinking that obliterates the business-IT divide,utterly transforms todays information systems and reduces the lag betweenmanagement intent and execution.

A process-managed enterprise makes agile course corrections, embedsSix Sigma quality and reduces cumulative costs across the value chain. I tpursues strategic initiatives with confidence, including mergers, consolida-tion, alliances, acquisitions, outsourcing and global expansion. Processmanagement is the only way to achieve these objectives with transparency,management control and accountability. During the reengineering wave of

the 1990s, management prophets books full of stories about other compa-nies were all you had to guide the transformation of your business.Although their underlying theories were based on age-old common senseand general systems theory proposed fifty years earlier, they offered no pathto execution. By contrast, the process-managed enterprise grasps control ofinternal processes and communicates with a universal process language thatenables partners to execute on shared visionto understand each othersoperations in detail, jointly design processes and manage the entire lifecycleof their business improvement initiatives.

Process management is not another form of automation, nor a newkiller-app nor a fashionable new management theory. Process managementdiscovers what you do, and then manages the lifecycle of improvement and

optimization, in a way that translates directly to operation. Whether youwish to adopt industry best practices for efficiency or pursue competitivedifferentiation, you will need process management. Based on a solidmathematical foundation, the BPM breakthrough is for business people.Designed top down in accordance with a companys strategy, business pro-cesses can now be unhindered by the constraints of existing IT systems.Short on stories and long on insight and practical information, this bookwill help you write your own story of success. It provides the firstauthorita-tive analysis of how BPM changes everything in businessand what it por-tends. Welcome to the company of the future, the fully digitized corpora-tionthe process-managed enterprise. Welcome to the next fifty years ofbusiness and IT.

8/13/2019 LIB-2002-08-3

3/31

8/13/2019 LIB-2002-08-3

4/31

8/13/2019 LIB-2002-08-3

5/31


How will this trend be absorbed by end-user organizations? Thereis no doubt that users heavily dependent upon ERP systems will con-tinue to look to their preferred supplier for BPM innovations. But therewill also be huge demand for independent Business Process Manage-ment Systems (BPMS). Companies need BPMS capability today. We areequally convinced that all enterprise applications will eventually berebuilt upon a BPMS foundation.

For all of the reasons above it is not possible to describe a typicalBPMS. Some vendors may not even use that term. Terms such as thefourth tier, business services orchestration(BSO) and composite applicationare allindicators of the BPM movement. Marketing terms such as next-generation workflow, smart middleware, hyper-tierand real-time enterpriseare alsopart of the unfolding story, each shifting processes to the center of IT.

In this book, therefore, our only option is to sketch the features ofa BPMS based on our current understanding of the potential of BPM.

Real products may differ from the descriptions that follow, but if theyare third-wave they will have more than mere process-inside: theywill treat processes as their first-class enti ty. We have, therefore, chosen todescribe an enterprise-class, plain vanilla BPMS. Analysts report thatthis thing called BPM is rapidly becoming the business platform ofchoice for Global 5000 organizations. We believe that this is the basiccapability companies are seeking in their search for control of enterpriseprocesses.

In look and feel, the BPMS is to the process designer what a designworkstation is to the automobile designer. The computer-aided-designand computer-aided manufacturing (CAD/ CAM) system of the auto-mobile designer becomes the computer-aided-modeling/computer-aided

deployment (CAM/ CAD) system of the business process designer.Unlike shrink-wrapped packages, BPM adapts to a companys pro-

cesses, not the other way around. The BPMS is targeted at a new hybridbusiness rolethat combines the skills of the enterprise dataarchitect and enterprise business architect. Theprocess architectwill be thetrue architect of 21st century business.

Underlying the BPMS, as in the case of CAD/CAM systems, is adigital simulationof the real thing with which the designer is working.While the automobile designer works with digital models of such arti-facts as tires, engines, body frames, aerodynamics and so on, the processdesigner works with digital models of such artifacts as orders, the ful-

8/13/2019 LIB-2002-08-3

6/31


fillment services of suppliers, third party billing services, bills ofmaterials, the shipping schedules of trading partners and so on.

When the automobile engineer pushes the make it so button, thecomputer-aided manufacturing part of the system actually implementsthe building of the new car. When the business process engineer pushesthe make it so button, the computer-aided deployment part of thesystem actually implements the mission-critical end-to-end businessprocess.

What about all the C++, Java, scripting, EAI, and other computertechnologies that are involved? Where did they go in all this? They arestill there, only now it is the BPMS that deals with them, not the design-ers and other business people who use the business processworkstations and their underlying BPMS.

With the BPMS, business information systems are developed andevolved by manipulating the business process directly, using the lan-

guage and concepts of business, not the language and concepts ofmachines. The BPMS sits right in the middle of the two worlds of hu-mans and machines, letting people speak in their native tongue and ena-bling machines to understand thema paradigm shift in the world ofbusiness automation that has a significant impact on the way businessesstructure and perform work. Business change now proceeds unham-pered by the rigid machine-oriented business technology of the past.

The Process-Managed Enterprise

Throughout the last decade companies have been using increasinglycomplex processes to maintain their operations, but have yet to see an

IT infrastructure capable of fully supporting these processes. The greatbenefit of the last decades enterprise resource planning (ERP) packageswas supposed to be their ability to promote integrationeverything thebusiness needs, all in one placebut realizing this goal was not reallypossible until now, with the advent of BPMS.

Competition and the escalating influence of the business Internet,have put pressure on companies to create new processes and extendexisting ones to customers, trading partners and suppliers. Processesused to be embedded in ERP and other monolithic systems. It didnttake long to realize that embedding processes in software was a bad idea,but no better ideas were available. The reason for this is threefold. First,

8/13/2019 LIB-2002-08-3

7/31


packaged enterprise applications such as ERP systems manage onlythose parts of the business process that have to be automated at anycosttypically such processes as materials resource planning and finan-cial reporting. Second, the deployment of new end-to-end processes onsome IT infrastructures requires prior organization of enterprise data, aformidable process that has already taken several decades to complete.Third, the processes ingrained in most application packages cannot bechanged easily nor combined with others, let alone integrated or freedup for collaboration.

For these reasons, ERP and similar systems require massive processreengineering efforts even for internal processes; it is therefore unlikelythat anypackagedenterprise software will be able to automate the count-less possible interactions between the processes of multiple businesspartners. There are both theoretical and practical reasons for this.

From a theoretical standpoint, the complexity of integrating multi-

ple processes increases exponentially with the number of processes andthe internal complexity of each process. Take just one example: a stan-dard application for automating the build-to-order process. How couldsuch an application be suitable for all companies in all industries? Toclaim that it could is comparable to claiming that a universal applicationhad been found for implementing the dollars-to-more-dollars process!Application developers who stick to a paradigm based on data and pro-cedures face an uncertain future. Their business model is based on per-fecting processes that appeal to all companies and all situations inall industries. That model is absurd, and developers will soonabandon it: When you find yourself in a hole, stop digging.

From a practical standpoint, business partners have heterogeneous

IT infrastructures provided by various vendors, and as a result, cannotrely on a single solution to cover every possible case. Even if one com-pany does manage to standardize on one application, this standard canrarely be imposed on others. Industry gorillas that believe they canimpose a standard across a value chain are deluding themselves. Thelong lead times for deployment and customization of any standard pack-age is debilitating. Companies seeking value-chain integration shouldinstead separate process innovation from process integration. Integrateapplications once, to the BPMS, and be free ever after to manageend-to-end processes.

The problem of integrating the IT infrastructures of multiple busi-

8/13/2019 LIB-2002-08-3

8/31


ness partners in a vendor-agnostic fashion will be solved in part by thestandardization of collaborative business-to-business interfaces. Exam-ples include, RosettaNet in the high-tech industry, ACORD in the insur-ance industry and CIDX in the chemical industry. Nevertheless, thereremains the question of how to integrate these interface processes withexisting IT infrastructures, which consist of multiple packaged enterpriseapplications that are increasingly complemented by new e-businessapplications such as procurement, fulfillment and service-chain man-agement. But thats not all. Partners want to innovate rapidly and deployinnovations from end to end, not just establish a standard interface atthe boundary between companies. Standards organizations must notrepeat the mistake of packaged software suppliers: They must focus on astandard process representation, not standard processes.

Companies should abandon piece-meal individual integration pro-jects and instead use a process foundation for building a coherent IT

infrastructurean enterprise architecturethat encompasses all pack-aged, departmental and enterprise systems. In this way, unique processescan be extended to business partners and customersa method we callmulti-channel, multi-system and multi-company integration. Its anintegrate-once and customize-many approach. It contrasts sharplywith the approach of distributing packaged software across the industry,which puts a companys proprietary process at risk of being replicated,destroying its competitive edge.

The BPMS enables implementation of business processes directlyon the IT infrastructure without the prohibitive cost of software reengi-neering. The key element of a BPMS is what we call the process virtualmachine, although different vendors may use different names. This is a

scaleable concurrent-processing execution environment for businessprocesses that execute the language of business process much as theJava virtual machine executes the computer programming language Java.

The BPMS does not replace existing applications, although its abil-ity to easily define and execute new processes will be used to replacesome application development as experience gives companies the confi-dence to take that step. Existing heritage systems, however, remain valu-able for both internal and external process-based development, becausetheir functionality, currently ingrained and embedded, can be tapped andencapsulated by the BPMS as software components that contribute tonew or improved business process designs. Nor do we dismiss any

8/13/2019 LIB-2002-08-3

9/31


newly invented best-of-breed applications that companies may wish tointegrate into end-to-end process designs. The flexibility is desirable notonly from the point of view of end users but also from that of softwaresuppliers that want to build a repository of application componentsfrom other vendors, which they can use to manufacture processes thatmeet the needs of particular industries or individual customers. Thisconvergence of application and process will deepen over time. Processmanagement systems already exist that project, or view, standardsoftware in the form of explicit, manageable, process data. This flexibil-ity is what end-user organizations need, and vendors that do not listenwill ultimately pay the price.

Benefits of a BPMS

The BPMS, whether purchased as a separate system or included

with next-generation application packages, will enable the enterprise tolive by the adage Say what you do, and do what you say.Since a packaged application cannot adequately address the chal-

lenges raised by the integration of business processes, the only alterna-tive, in the absence of a BPMS, is extensive custom development involv-ing traditional programming. Even if the software developmentapproach is versatile, a major drawback remains: Software code does notdirectly reflect business processes, and thus becomes incredibly difficultto maintain over time, as processes require modification. Althoughinternal processes can be successfully maintained if current developmentmethodologies are carefully adhered to, the same is not true for proc-esses that extend to partners. Traditional approaches can no longer han-

dle the complexity of the task: All the programmers in the world, even ifa company could afford them, could not keep up with the growingdemand for end-to-end business processes.

The intermediary step between the definition of business processesand their implementation on the IT infrastructure can be avoided with aprocess-centric infrastructure (Figure B.1). This, in turn, confers uponthe IT infrastructure the advantages of adaptability and control.

Adaptability: The BPMS is the primary business velocity engine. Companiesare under great pressure to embrace the unprecedented changes fosteredby the economy, manage dynamic relationships with business partnersand retain an edge over the competition. Business analysts customize

8/13/2019 LIB-2002-08-3

10/31


business processes through user-friendly design tools and through busi-ness rules expressed in natural language. This dramatically reduces thetime required for the deployment of new business processes.

Manageability: The BPMS enables business process intelligence.For thesame competitive reasons, the enterprise needs to measure its perform-ance directly. Analysts, never shy about introducing new three letteracronyms, refer to this as enterprise performance management (EPM).The P in EPM ought to stand for process. EPM is not an amalgamof existing ERP, CRM and SCM applications, as some analysts havedefined it, but should be defined as the third wave of business processmanagement and heralds a shift to BPMS as the foundation forenterprise architecture.

Traditionally, business measurementwhat analysts call businessintelligencehas been based on the analysis of dataextracted after thefactfrom past operations of implicit business processes. The BPMS, on

the other hand, enables business analysts to do real-time process analy-sisto directly measure the business value of explicitly defined business processes.These processes can now be optimized on the fly without the needfor additional software development, tremendously simplifying themanagement of their design over their lifetime.

8/13/2019 LIB-2002-08-3

11/31

8/13/2019 LIB-2002-08-3

12/31


Figure B.2. Mission-Critical Enterprise Software Infrastructure1

Flexibility.Just as flexible relational database management systemswere based on the powerful relational model for the modeling, indexing,and retrieving of data, the business process management system must bebuilt around a powerful business process model for the modeling,deployment, and management of enterprise-wide business processes.

Therefore, as Gartners David McCoy advised,

Enterprises should begin to take advantage of explicitlydefined processes. By 2005, at least 90 percent of large enterpriseswill have BPM in their enterprise nervous system (0.9 probability).Enterprises that continue to hard-code all flow control, or insist on

manual process steps and do not incorporate BPMs benefits, willlose out to competitors that adopt BPM.1Business process man-agements potential for business improvements through advancedprocess automation is the most compelling business reason toimplement an enterprise nervous system (ENS). Where ENS

1The cube is the symbol adopted by the Business Process Management Initiativeto represent the BPMS, as opposed to the cylinder that has traditionally denoted thedatabase management system. The cube and is not a trademark of the BPMI nor of anymember of the BPMI. The top face of the cube always represents processes. The leftand right faces can be used to represent either internal applications and external busi-ness channels, or information sources and process participants.

8/13/2019 LIB-2002-08-3

13/31


implementations risk being seen as infrastructure in search of aproblem, BPM allows enterprises to raise the level of discussionand make specific business process support the primary reason forapplication integration efforts.2

The BPMS must knit process components together and allow theaccurate measurement of the performance of business processes usingadvanced business-process intelligence technologies. It must enablebusiness analysts to customize existing business processes for specificmarket segments, trading partners and customers. The system mustenable the enterprise to leverage its existing IT investments by providingan open architecture based on industry standards, simplifying its integra-tion with any back-office system, enterprise middleware, or packagedapplication, on any platform or operating system. Most importantly, thesystem must support standard business-to-business collaboration proto-cols, without requiring business partners all along the value chain to be

running the same business process management system. This flexibilitywill be augmented by means of building interfaces between process sys-tems, mediated by interface processes that partners agree to use forcollaborative, distributed process management.

Reliability.A process-oriented business infrastructure must provide afoundation for existing mission-critical applications that rely on it togain access to core process services. This has been the case for ERPpackages, which typically rely on an external database management sys-tem provided by a third party. In addition, BPM is based on parallel(concurrent) computing, which means that the business process man-agement system must offer an extreme degree of scalability and reliabil-ityincluding support for clustering, load balancing and failoverso

that the continuous execution of processes is never interrupted.Reliability is usually the result of multiple factors, mainly of a

technical nature. Scalability must be offered in terms of both scope andcomplexity so that the business process management system will be ableto support a broader range of business processes that span an increasingnumber of enterprise applications, corporate departments, and businesspartners. Fault-tolerance should be provided through a properarchitecture that minimizes the number of single-points-of-failure andsupports the redundancy of critical components. Quality of service mustbe guaranteed based on process-level agreements negotiated betweenbusiness partners, and embodied in explicit digital process interface

8/13/2019 LIB-2002-08-3

14/31


designs.The same criteria that companies have applied to existing products

can be used to evaluate the BPMS. However, it will also be necessary toevaluate the capabilities of process management systems in terms similarto those used to evaluate early database management systems. Forexample, it is possible to determine the degree to which a relationaldatabase product adheres to the relational data model as set out byE. F. Codd:3

! Large data banks must be protected from having to know how thedata is organized in the machine (the internal representation)

! Activities of users and most application programs should remainunaffected when the internal representation of data is changed

! Changes in data representation will often be needed as a result ofchanges in query, update, and report traffic and natural growth in the

types of stored information! A model based on n-aryrelations, a normal form for data base rela-

tions, and the concept of a universal data sub-language areintroduced

! Three of the principal kinds of data dependencies need to beremoved from existing systems: ordering dependence, indexingdependence, and access path dependence

Replacing the word data with process, similar criteria can beextended to BPMSand we encourage vendors to take this step. Reli-ability will be paramount. Will BPMS work in the correct mannerunder all conditions, and can the outcomes of executing processes be

predicted?Security.The BPMS must serve as a business firewall, offering

security and auditability.In any open environment, across companies oracross internal-divisions, security is, not an optional feature that can beadded over time through point solutions, but a mandatory feature thatshould be addressed in the early stages of development. Whether it sitson a private community network or the open Internet, the business pro-cess management system is the boundary between a relativelyunsecured IT infrastructure and a community of partners that,unfortunately, are not always trustworthy or well intentioned.

For example, business partners commonly require the ability to

8/13/2019 LIB-2002-08-3

15/31

8/13/2019 LIB-2002-08-3

16/31

8/13/2019 LIB-2002-08-3

17/31


ness process management system must provide the foundation for astraight-through process integrationmethodology. As shown in Figure B.4, theBPMS integrates oncewith existing IT systems so that the enterprise canleverage its previous investments while retaining the ability to innovaterapidly in the area of process design. In addition, it must provide an evo-lutionary path to support future business-to-businesscollaborationprotocolsthat will grow dramatically in scope and complexity over the comingdecade. Companies are now looking for products that implement proc-ess management in general, not the specifics of particular protocols.Such hard-coded solutions will be left in the dust by the BPMS.

AMR Research4enumerates the ten typical capabilities that will beembodied in a business process management system:

1. Process Modeling 6. Process Automation2. Collaborative Development 7. B2B Collaboration

3. Process Documentation 8. End-User Deployment4. Process Simulation 9. Process Analysis5. Application Integration 10. Knowledge Management

Figure B.4. The Business Process Management System

8/13/2019 LIB-2002-08-3

18/31


Model, Deploy, Manage. The business process management systemenables a three-step, straight-through process integration methodologyfor the integration of business processes. When a BPMS is firstemployed, these steps should involve different categories of usersbusiness analysts, software developers and systems administratorswiththe constant participation of business analysts over the entire lifecycle.

First, business processes are modeled with a graphical user interface(GUI) and the underlying process design patterns are stored in a processrepository. The process repository is responsible for the distributedauthoring of business processes by multiple users over Internet-basednetworks.

Second, business processes are deployed from the process reposi-tory to the business process management system with process manage-ment tools accessible from any browser. Processes can be deployed andupdated in real-time, without any interruption to the process server.

Tools for users can dynamically query the state of any process instance,as well as the status of the business process server itself.Third, business analysts and system administrators can begin to

manage business processes with system management tools usingstandard business process query languages. For example, operators areable to manage the division of work between partners in the executionof processes. BPMS must provide for the fluid movement of processactivities and responsibilities across organizational boundaries, which isso important in value chain integration and business processoutsourcing.

8/13/2019 LIB-2002-08-3

19/31


Figure B.5. The Model, Deploy and Manage Methodology

Process management offers a clean approach to the division ofresponsibilities between business and IT in the management of theprocess-centric enterprise infrastructure. The process-neutral BPMSinfrastructure is owned by the corporation and entrusted to IT to man-ageeither in-house or through outsourcing to a third party. The proc-esses running on the BPMS are owned by the corporation, by lines ofbusiness or by functional workgroups, depending on how the processesare segmented and designed. High-level end-to-end processes areprobably owned by the corporate office. Controlled adaptations of theseprocesses will be owned by local entities, particularly in federatedorganizations, where it is necessary to think globally, but act locally.The BPMS will be the repository of organizational learning and bestpractices.

The extent to which IT is involved in the design of processes will

vary from company to company and from process to process. It willdepend partly on culture, partly on skills and partly on the type of proc-esses being deployed. Although we have consistently used the phrasebusiness processin this book, we do exclude IT processes, such as datacenter operations or IT service management, from the scope of ourdefinition, for these are business processes in their own right. IT willnaturally be more involved in the managing of its own processes than itis in processes owned by HR or logistics.

Most importantly, BPMS will empower the business side as neverbefore. The business side will focus mainly on process discovery, design,optimization and analysis, and will share responsibility for process

8/13/2019 LIB-2002-08-3

20/31

8/13/2019 LIB-2002-08-3

21/31


companies to examine real products and services from vendors andconsulting firms.

The integration tier is responsible for the integration with back-office systems, enterprise middleware, and packaged applications. Itoffers a schema-driven mapping framework and off-the-shelf connec-tors to leading databases, directory servers, message-oriented middle-ware, transaction-processing monitors, application servers, and packagedenterprise applications.

Figure B.6. The Abstract, 3-Tier, BPMS Architecture (Simplified)

The automation tier is responsible for the reliable execution ofbusiness processes and the processing of business rules. It relies onadvanced distributed and concurrent computing technologies including amessage queue, a transaction manager, a component container, a ruleengine, and a process virtual machine.

The collaboration tier is responsible for the support of standardbusiness-to-business collaboration protocols, as well as any future stan-dards or any custom protocols such as those already in use by industry.It is built on top of a versatile XML messaging engine and offerscustomizable implementations of leading business-to-business (B2B)collaboration protocols as well as a hierarchical channel manager.

Process Integration Environment. The business process managementsystem is not simply an execution engine for business processes. Rather,its a complete platform for the modeling, deployment and managementof all process-related information. While this environment is specificallytargeted at business analysts and supports distributed collaborative

8/13/2019 LIB-2002-08-3

22/31


development, it is also designed to inter-operate with existing integrateddevelopment environments (IDE) used by software developers. Existingrepositories of enterprise software assets must be accessible to theBPMS. Completing the platform are system management tools designedfor system administrators.

A Process Server

Just as todays data management systems can be accessed fromdifferent programming languages using structured query language (SQL)or other connectivity tools, the same will be true for process manage-ment systems. The DBMS is a general purpose data server; the BPMSwill be a general purpose process server. Although it will be possibleto work entirely using BPML, we can expect a variety of software engi-neering techniques to grow up around the BPMS. One of the most sig-

nificant will be the process equivalent of SQL, the Business ProcessQuery Language (BPQL). This will enable the development of process-aware applications, regardless of platform or programming language.

The reason that software developers will readily adopt BPQL andprocess servers is that they simplify the development of applications inthe context of entire processes. In traditional development, pieces of abusiness process are scattered; a piece in one application; a piece inanother; a piece in my system, a piece in the system of a partner. Imple-menting e-business using such an approach is extremely time consum-ing. Process-aware applications, on the other hand, see all processes andall process data, limited only by the rules of process-level security (itselfdefined as a process). With BPQL, it will be trivial to write software

programs that monitor, interrupt, interact with and intercede in end-to-end processes. The e in e-business stands for integration, collabora-tion and coordination. When processes are first-class citizens, the e ispre-built into every process and doesnt have to be e-programmed foreach, just like Lego bricks are designed to snap together.

BPQL will also make it possible to write the equivalent of databasestored procedures and triggers whereby the process server can invoke,interrupt and interact with business processes on the fly. We expectdevelopers to be very inventiveperhaps too inventivefinding waysto write all kinds of code to manipulate processes offline, online or evenduring process execution. This process-centric application development

8/13/2019 LIB-2002-08-3

23/31


environment will not be different in kind from traditional programming,but it will be incredibly more powerful. Process-aware code will have a360-degree view of the processespast and presentspanning systems,departments and businesses.

Remarkably enough, process-aware applications can be written insuch conventional programming languages as COBOL, Java and RPG,as well as in such database query tools as SQL, ODBC and XPath. Ifprocess is the new data, then a raft of new techniques will emerge,offering a rich palette of opportunities for new technology start-ups thatchoose to build on, not re-build, the new process foundation the BPMSprovides.

Although the advocates of process management systems envision aworld in which the business process design alone supersedes the applica-tion as the organizing principle for software, old habits die hard. Appli-cation development using established programming languages will con-

tinue for the foreseeable future. But the trend is clear: BPMS will greatlysimplify application development in the way that DBMS did in dayspast. In a world of processes, dont expect software to go away. Compa-nies should develop guidelines for determining when the differentparadigmsprocess aware (BPQL), data-aware (SQL)should, andshould not, be used.

The Integration of Applications and Processes

Companies that set out to define and execute processes using aBPMS will be surprised to find how easy it is to integrate existing appli-cations into process design. Although the system will be most com-

monly used to integrate existing back-office systems, it has far greaterpotential. For example, many companies already use simulation andother business-intelligence tools. These can now be extended into therealm of executable processes. When the simulator has been integrated,once, to the BPMS, it can freely participate in any process design,requiring nothing more from the user than drag-and-drop operations onthe process design desktop user interface. The user specifies usingBPML how the simulators process exchanges information with the pro-cesses of other participants. The simulator becomes a new agent in thesystem. It can add intelligence to the process and oversee and predictthe behavior of entire processes. For example, it could provide a

8/13/2019 LIB-2002-08-3

24/31


running simulation of market response to new products.Integrating a simulator in this way provides simulation as a serviceto

every process participant. But BPMS vendors and some companies maytake simulation a step further, providing access from the simulator tothe process server using BPQL. In this way, all persistent process datawill be available to the simulator, opening up vast possibilities for newbusiness insight. Companies should count on this being possible todayand start to plan the applications it enables.

Any existing IT system can be integrated to the BPMS or includedwithin a process design as a participant. For example, supply-chain plan-ning tools and value-analysis tools can now have access to the end-to-end process data they need from across the whole chain. Its no moredifficult to achieve than designing the required process.

Process Management and the IT Industry

The emergence of process management systems does not meanthat packaged software is going to go awayfar from it. It is possibleto package a digital process in the same way that it is possible to packagesoftware objects. Packaged processes are a form of packaged software.

Software companies that develop and sell enterprise packages wantnew ways to customize their products. Process management systemsoffer an answer. Many software companies are considering strategies forcomponentizing their current monolithic products, and several havealready made significant progress in this effort. Their goal is to allowcustomers to pick and choose only the components they need, as theyare needed. Others are exploring the possibility of packaging software

components as business services and selling them using an ASP(application service provider) or BSP (business service provider)approach.

If we extrapolate such activities into the future, we can envision theera of building application packages giving way to an era of processmanufacturing. Package suppliers, including those who strive to offer acomplete solution, can embrace the principles of mass-customizationin their offerings. Initially these suppliers will use process managementto adapt their existing packages to the needs of vertical industriesaprocess that has already begunthen to niche markets, and eventuallyto individual customers. Providing process solutions to small and mid-

8/13/2019 LIB-2002-08-3

25/31


size enterprises (SMEs) , which cannot afford the huge ERP packages ofthe past, is a considerable market opportunity.

Packaged software is poised to change in two significant ways.Firstly, packages will look more like processes and suppliers will provideprocess management tools for adapting them to the enterprise. In daysof old, package suppliers urged their customers to avoid customization,for they well knew the consequences. When a company did modify apackage and things went astray, the suppliers often threw up their handsand said, Its not our fault. Tomorrow, packaged software supplierswith process management systems embedded in their offerings willencourage customization. They know that this is how competitiveadvantage is achieved and they want prosperous customers. In the era ofBPM, when a customer modifies a package, the suppliers will throw uptheir hands and say, Lets celebrate!

Secondly, a wave of new process software, built on the founda-

tion of the BPMS, will emerge. Although the notion of process soft-ware may sound inconsistent with the principles of the third wave ofBPMthe eradication of software development and IT involvement inprocess designit is really no different than the emergence of supporttools for data management. These tools will fall into one of two generalcategories:

! Advanced tools provided, not by the BPMS supplier, but by compa-nies specializing in various aspects of the process lifecycle, such asdiscovery, design, operations, optimization and simulation.

! Applications built on the BPMS and taking advantage of its capabilityto persist and manage the state of end-to-end processes. For

example, future ERP, SCM, CRM and workflowindeed allapplicationswill be built on, or evolve toward, the BPMS.

Such developments are inevitable: The BPMS is not a silver bulletor panacea, any more than any other packaged system is. However,because the step from data to process is so profound and so powerful,many companies may find less need for specialized applications, relyinginstead upon the general-purpose process management system. This isthe experience of companies that have already deployed the first genera-tion of third-wave BPM solutions. They are finding they have a verypowerful application (process) development environment. Not only

8/13/2019 LIB-2002-08-3

26/31


this, but the applications (processes) they develop work together withno further integration work required from IT.

Crossing the Process ChasmAs end-user organizations, software providers and consultants

move to process-centered information systems, the pattern of adoptionwill be similar to that of the migration to the database platform: Therewill be early adopters, mainstream adopters and the laggards. In tablesB.2 and B.3, we compare key factors in the migration to thestandards-based database platform with those involved in the migrationto the BPMS.

PreexistingApplications

First GenerationInnovators

Mature DataApplications

Data Embedded Partially explicit Fully explicit

Datarepresentation Proprietary Proprietary Standard(relational)Data querylanguage

None Proprietary Standard(SQL)

Data manage-ment tools

Ad hoc Proprietary Platform(RDBMS)

Business impact Unable to easilymanage datawithin andbetweenapplications

Easier to managestovepipe data butno enterprise dataquery

Enterprise wide(shared) datamanagement (anddata-awareapplications)

Table B.2. Evolution of Data Management

First-generation BPM innovators represent where we are today, andthe industry is poised to take the next step. Most businesses and thesoftware companies that supply them are in a headlong race to obtainprocess-management capabilities, although much of the effort thus farhas been spent on finding ways to extend the existing data-applicationparadigm by embedding application-interface integration brokers withpackaged applications. As companies experience increasing pressure tofind new competitive advantage, and as they recognize business processmanagement as the means to that end, the race to BPM maturity willset a new speed record for the mainstream acceptance of a radical

8/13/2019 LIB-2002-08-3

27/31


breakthrough.

PreexistingApplications

First GenerationInnovators

Mature Process-Applications

Process Ingrained Partially explicit Fully explicitProcess repre-sentation

None or implicit Proprietary, and,possibly notfirst-class citizen

Standard(BPML)

Process querylanguage

None Proprietary Standard(BPQL)

Process man-agement tools

None Proprietary Platform (BPMS)

Business impact No ability tochange processeswithout softwareengineering

Some discreteprocessesmanageable(point solution)

Enterprise wide(shared) processmanagement (andprocess-awareapplications)

Table B.3. Evolution of Process Management

A New Era of Business Infrastructure

The introduction of the business process management system willlead to pervasive yet evolutionary changes in the corporate IT infrastruc-ture. First, new packaged enterprise applications will leverage the BPMSas a mission-critical process execution facility. Second, the BPMS will actas a business firewall, federating multiple directory services across theenterprisethe foundation for future enterprise-process repositories.

Third, the BPMS will be tied to future process-analysis serversthecornerstone of the next generation of business process-intelligencetechnologies. As a result, the BPMS will become the center of gravity ofthe modern enterprise architecture.

Over the last two decades, companies have undertaken manybusiness-reengineering initiatives, with mixed success. As a result, theyare much more experienced in discovering, understanding and modelingtheir business using processes. We believe that companies are ready totake the next step, adopting business process management as theprimary mission-critical enterprise software infrastructure governingprocess innovation. In fact, many are going to be surprised by how

8/13/2019 LIB-2002-08-3

28/31

8/13/2019 LIB-2002-08-3

29/31


About the Authors

HOWARD SMITHis Chief Technology Officer (Europe) of ComputerSciences Corporation (CSC) and co-chair of the Business ProcessManagement Initiative (BPMI.org). With more than 24 years in the ITindustry, he is a sought after speaker and advisor. His work in predictingand shaping technology at the intersection with business led him to takean active role in the development and application of the third wave. Heis currently researching the application of business process managementtocorporate sustainability, innovation and growth, for which he has global

research and development responsibility at CSC.

PETER FINGARis an Executive Partner with the digital strategy firm,the Greystone Group. He delivers keynotes world wide and is author ofthe best-selling books, The Death of e and the Birth of the Real NewEconomyandEnterprise E-Commerce. Over his 30-year career he has taughtgraduate and undergraduate computing studies and held management,technical and consulting positions with GTE Data Services, SaudiAramco, the Technical Resource Connection division of Perot Systemsand IBM Global Services, as well as serving as CIO for the University of

Tampa.

8/13/2019 LIB-2002-08-3

30/31

8/13/2019 LIB-2002-08-3

31/31


Other Advanced Business-TechnologyBooks from Meghan-Kiffer Press

Business Process Management:

New D i recti onsThe Evolution and Applications of Business Process Management

The Death of e and the Bi r th of the

Real N ew EconomyBusiness Models, Technologies and Strategies for the 21st Century

Enterpr i se E-CommerceThe Breakthrough for Business-to-Business Commerce

The Real-T ime Enterpr i sePowering Profits with Process Automation

Meghan-Kiffer PressTampa, Florida, USA,www.mkpress.com

A dvanced Business-Technology Books for Competitive A dvantage

LIB-2002-08-3

Documents

Transcript of LIB-2002-08-3