Thursday, May 14, 2009

Is BPM counter cyclical?

There’s a theory going around that has probably been mentioned enough times now to become a mainstream view. The theory is this – BPM is counter cyclical. And the reasons put forth for it are this. During a recession, companies are looking to cut costs and one way to achieve this is by purchasing and implementing BPM software. BPM promises to improve process efficiency thus reducing costs.

It’s a persuasive argument, if a little simplistic, but is it true? To tell you the truth I have no idea. Rashid Khan argues it’s not true and the only arguments I’ve seen that BPM is counter cyclical seem to have come directly or indirectly from BPM vendors. Certainly something that promises to offer a significant reduction in costs is going to be attractive but BPM software is generally an expensive purchase (although there are free options starting to appear) and then there are costs involved in actually getting it up and running. No single company’s processes are exactly the same as another so some analysis and development will be required. And processes change, so there are on-going costs incurred. Finally, it’s difficult to quantify how much money will be saved by implementing BPM. I’ve seen some impressive figures for savings made, but will those figures be replicated in your organisation? There are so many variables involved, it’s probably impossible to know. Again, that may make it difficult to justify the up front cost.    

Next, some anecdotal evidence. The Lombardi conference was cancelled and became a virtual event, but the Metastorm conference was well attended, so it’s difficult to draw any conclusion from that. Metastorm claim their revenues have increased by 16% over the past year which isn’t explosive growth, but any kind of increase should be considered a good thing at the moment. The company I work for has certainly not been unaffected by the downturn but we are still managing to keep our head above water.

That all said, BPM isn’t going away. And if it isn’t counter cyclical, that won’t necessarily be a bad thing. Perhaps, finally, we might see some consolidation in the area. Some of the weaker companies may disappear or merge and the stronger companies can gain more market share and thus have more money when the recovery comes (whenever that maybe) to produce even better software.

Of course, if you are thinking about or are actively implementing BPM in your organisation, Process Mapping is here to help.

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