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The Future of Business Process Management (BPM) Software

Big dog, little dogEver wonder why the business process management (BPM) software market is so small? And more importantly, will it ever grow up? Or is BPM software perpetually stuck in the role of  a small pup instead of running with the big dogs, like analytics, collaboration and content?

According to Market Reports Hub, the BPM market will grow from $4.71 billion in 2014 to $10.73 billion by 2019, with a compound annual growth rate (CAGR) of 17.9%. While ~$10B by 2019 is not a big slice of the IT market, it is respectable. However, Market Reports Hub includes more than BPM software in this forecast. (For more information, see the “Business Process Management Market by Solutions (Process Modeling, Automation, Integration, Content & Document Management, and Monitoring & Optimization Management), by End User (SMBs, Enterprises & Large Enterprises) – Global Forecast to 2019” on the Market Reports Hub site.

In addition to modeling, automation, integration, monitoring and optimization, this $10.73 billion forecast also includes a percentage of revenue from content and document management, which is not normally counted as part of the BPM software market. This additional revenue could either be from the case management market or some portion of enterprise content management (ECM).

(To visualize the interrelationship between the ECM and BPM software markets, think of two intersecting circles in a Venn diagram. In one circle is BPM software and in the other is content/document management with the overlap being case management.)

If you were to subtract some percentage of content/document management revenue from Market Reports Hub’s BPM software projection, you would get a more realistic number for the BPM-only  market. While the actual number to be subtracted can’t be derived from this published data, let’s be conservative and say that BPM software minus a portion of content/document management equaled approximately $4B in 2014, and let’s say the number will only equal $8B by 2019. That means the BPM software market is not only fairly small, but also has persistently remained small for many years, especially given that it originated in the early 1990s, and was reinforced in the 2000s when a stream of EAI middleware merged into it as well.

So, here’s the natural follow-on question: why is the BPM software market so small? Is something wrong with this software category? Why hasn’t it taken off the way it should have?

Here’s my take:

  • BPM software doesn’t have a natural home or advocacy group within the organization. Although some IT organizations champion BPM, it’s either a great unknown or there’s a lot of resistance overall from most IT shops. Technologists instead say they can build business processes without requiring an investment in BPM, or they can automate business processes using enterprise suites.
  • Business users typically fall in line with IT, tending to agree that all business processes can be automated using ERP, CRM, SCM, HCM or some other enterprise suite.
  • Process excellence teams, usually reporting to the COO or some other operations exec, are typically tiny. Often the process teams consist of 1-5 Lean Six Sigma experts; a team of 12 is huge, even though a team that size would be vastly outnumbered and outgunned by IT. It’s hard for a group this small to evangelize BPM software to IT and the business, even if they want to. And often they don’t want to. Instead they are solely focused on their process excellence methodologies and are not technologists or technology advocates.

That’s the problem in a nutshell. The British have a charming expression for this situation: they call it falling between two stools. BPM software, while having amazingly high impact when installed, has been falling between two stools for years.

This has to change. And it will change. There are too many vendors and too many dollars invested for the BPM software market to stay relatively tiny. In fact, the emergence of case management shows the way forward for BPM software.

I believe BPM software will push ahead on two paths, both of which will will grow the software revenues much more significantly than today’s trajectory. Here’s a glimpse of the future:

  • BPM software will morph into a next generation business process platform. Already case management has developed from BPM software to support more flexible, dynamic processes, and provides many content technologies within the case management platform. BPM will continue moving in this vein, adding even more capabilities to support dynamic and collaborative work, including software for analytics, business process, collaboration, content management, customer experience, social and other emergent software categories. And this next-gen process platform will be easier for process teams and other small advocacy groups to deploy by being available in the cloud and completely supported from start to finish on smart phones.
  • BPM solutions partners will develop a new class of dynamic, collaborative out-of-the-box business applications for the new process platform. A big part of the problem with BPM adoption has been the learning curve to get systems operational. Sometimes the products are too complex and sometimes the organization has low technology or low process acumen in the BPM advocacy group. But there are hundreds, even thousands, of repeatable processes that the BPM software vendors or their services partners could develop and sell as COTS products, helping to bridge the process and technical knowledge gap. These processes span every industry and every business function, so the opportunity level is quite high for solutions partners. This will be the next big wave in BPM software growth. In essence a new class of next generation software applications built on a “BPM plus” platform will emerge and provide the big growth accelerator.  Finally, BPM software will be able to run with the big dogs.

To learn more about how this trend will unfold or to get a list of typical next generation BPM processes, please download Digital Clarity Group’s recent white paper entitled Tackle Complex Processes With Dynamic BPM Suites and Business-Ready Apps.

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