"They think of us as being the same as an electricity supplier" - K2 vs. The Business.

(Note: This is the next in a series of interviews I have been holding with key BPM vendors to help understand their thoughts and perspectives on BPM issues we are currently facing)

In a small office in the corner of a nondescript building in Wimbledon, south-west London - dominated by a huge flat screen video conference TV - sits a displaced South African with a gift for conversation and some specific views on BPM and the vendor space. This is Dennis Parker, Vice President of UK and Europe at K2 and he's on a mission to make K2 a leader in this space.

K2 Background
For those of you who don't know K2 (and it's entirely possible as they are still very much a 'niche' vendor in this area), the company was formed in the late 90's. It got the attention of Microsoft locally through an important joint customer. Under their guidance an introduction was made to Microsoft in the US which provided further impetus and set the foundation for a strong global partnership with them. In 2003 the company released K2.net 2003 which was at the time an early pure .NET compliant workflow server. By 2004 the company had established a presence in important markets such as the UK, Singapore and the USA and moved it's head office operations to Redmond, USA. The company went through four straight years of 100% growth driven by strong demand and expanding market presence. In 2005 development was started on the K2 Blackpearl product which was released in 2007. This product has a wider remit than just workflow reflecting a core theme in the company to move beyond workflow into applications that are fundamentally based on process. There are more than 2000 customers worldwide with in-house staff of 250 people globally.

BPM Philosophy

I asked Dennis to explain the BPM philosophy within K2. He told me that there are basically two facets of BPM from the K2 point of view:

  1. Strategy: This is the ability of an organisation to move to becoming process based. As Dennis said "K2 don't play in this space"
  2. Execution: This is the creation and building of applications based on workflow models - the point at which a modeling strategy needs to devolve itself into an executable. "K2 do play here", said Dennis. What this does, then, is act as a means of focus for a company like K2 which is not going to go into any of the so-called 'Enterprise Architecture' areas that folks like IDS-Scheer and Metastorm have gone into.

At this point we moved onto a very interesting statement by Dennis which - I must admit - got me thinking about the state of the BPM union. According to Dennis "Evolution of model-based execution technology is at a very early stage in its life cycle". He referred frequently to an imaginary graph of maturity whereby the top of the line indicated a mature, integrated environment - similar to the one currently being enjoyed by those technologies and organisations managing data - and the bottom of the line which is a technologically immature state. Using manufacturing and construction as a comparison point, those industries have moved from manually drawn plans through to fully automated planning - including the ability to produce simulated 3d models and directly drive construction and manufacturing production lines. In simple terms a house owner - “the user” - can view a model as a 3-dimensional view of his proposed construction, walk through it and participate in the design without needing to understand the engineering constraints associated with foundation load or cross beams to support the roof.

In IT the concept of model driven applications that allow for differing "lenses" for viewing processes still has a way to go. For example the level of detail and the content of a process model that would be viewed by an end user is radically different to that of an IT technologist. Being able to accommodate both of these is possible but challenging.

We talked about why something like this is important - particularly why an application that can define and create applications is viable. A high percentage of customers in the mid- to enterprise sector are running on outsourced models. In the context of managing change and bespoke development this is proving to be very expensive. A recent study conducted by a K2 customer identified that on outsourced models, the cost of changing a line of code can run to £85,000. This is a boundary case and relevant to a scenario where environments have a high degree of “lock down”, however the point illustrates that this is not sustainable and needs to change

One way of achieving this is through the use of 'declarative models'. That is to say models that can define logic directly on a production infrastructure. A normal development infrastructure has Development, Test, Acceptance, and Production as separate environments with a discreet, moderated flow from one through to the other. This model is fundamentally restricted to IT professionals to operate and manage. The goal of declarative or model driven environments is to take this to a user set which is not IT based and allow them to participate in this process directly. With a declarative model your production environments are enabled for controlled change and can be updated directly. In reality a combination of both of these set-ups would be used.

Looking at this from my own background, I realised that - as a result of application inventories that were carried out prior to Y2K - there were a huge number of duplicate applications created. Lots of these are created on the 'de-facto' development standard for non developers which is Excel or Access. Databases proliferate across the organisation. I asked Dennis how do you stop duplication is in this environment? The answer is 'good process discovery'. There is the need for a central process repository which will identify the defined and accepted way of performing something -- such as submitting an expense claim -- and this will minimise the creation of duplicate applications across unapproved processes. However, there is the need to have the ability to localise or personalise such applications to allow for cultural and legal requirements across different countries. Personalisation at this level implies a change in the way data is managed. Rather than having a defined, standard, normalised database we end up moving to a 'many-to-many paradigm' which creates "loosely coupled entities" that can be extended and personalized based on business need.

K2 and Microsoft
Looking at the background of the company it is obvious that Microsoft and it's associated technologies plays an important part in the life of K2. Dennis said, however, that there are no 'hard burned' linkages to Microsoft. Delivering products today in the “BPM space” requires a number of foundation level technologies to come together. Over time these technologies will continue to expand. Today these components include scalable operating systems, secure data storage and reporting, portal technology, security, development and deployment technologies and the like. Customers expect an integrated experience that simply brings all of these factors together in a platform that just works. Vendors have a choice when considering these components - they either “single source” or integrate those components from multiple vendors. K2 has chosen to build on a single vendor, Microsoft.

The company understands that this model will appeal to customers who fundamentally have Microsoft infrastructure. Whilst the model enables a high degree of integration with non Microsoft environments (e.g. SAP, Oracle and the like) there are customers who have built their IT architectures with other vendors like IBM. For these customers K2 will not be a logical choice and K2 will not spend its energy selling to these customers.

Criteria for Purchasing
As we had broached the subject of selling to customers, I asked Dennis what his customers considered are the criteria needed for purchasing. He said the promise of being able to deliver quickly is important. When I asked them the kind of criteria that appear in RFP's, he mentioned notation standards and execution standards. (Incidentally questions in K2 RFP's are put into an internal Wiki - along with the answer - as this insures a consistent and centralised repository for replies).

Dennis said that his customers basically fall into two types:

1) The procurement led customers: These are customers who are following a strict procurement mandated process for choosing a vendor.
2) Business problem led customers: These are customers who have identified major and urgent internal business problems which need to be solved quickly and have come to K2 on that basis

I wondered if price is a differentiator. It appears that those customers who are expecting Microsoft technology say that the K2 product is more expensive (Which it is compared to something like Visio). However customers who have come from other backgrounds look at K2 and tell them that - based on a "BPM suite" pricing expectation - they are cheap. K2 pricing itself works on two models: user based and model based.

Conferences = Vendor fairs

Dr Geary Rummler (The father of the swimlane) was quoted before his death as saying that "BPM conferences are becoming very much like vendor fairs". I asked Dennis how he would reply to this accusation and he said he would probably agree with that. However, he went on to explain, the label of "BPM" is one which is recognised by a lot of people, without really understanding what it means. To a degree this represents where the industry is on the maturity cycle of this technology. For K2 the concept of “process driven applications” is core to their value proposition. For now there is little widespread recognition of that particular term. It makes sense - in that case - to use the generic term 'BPM' as a placeholder to position their offering in.

Councils and government organisations
I noticed that K2 sells a lot to county councils and government organisations and wondered why this was. A lot of county councils used Microsoft infrastructure and there is also a business driver to get more from the infrastructure. As a result when councils go to companies like Microsoft and ask them how to leverage this infrastructure, K2 gets mentioned. K2 have created what they call the "Trans Government accelerator". This is a framework hosted at the Microsoft development centre in the UK and is regularly used to demonstrate to government and county councils the benefits of a product such as K2 with the Microsoft infrastructure. On top of this Charlie James, who leads the K2 local government business, has done an excellent job in understanding the needs of county councils.

Fundamentally K2 as a company are very interested in standards.Customer ultimately drive standards and vendors need to adhere to these standards where they can. With respect to BPMN, Dennis had the following to say: "We looked at all the standards which exist and found that there are so many of them. The problem is they're not complete standards. For example there is no modeling standards to allow you to defined the choice of 'presence based routing' -- for example how to route helpdesk calls to the appropriate person, or group of people, based on presence (are they actually at their desk and signed in)? -- and in this case what had happened is that functions have been led by the standards therefore following the standards will remove the ability to perform certain functions which are not managed by the standards". K2 would like to see standards updated to match some of the functionality they offer today. It should also be said that the K2 support for those standards is probably a bit behind the curve of any changes which take place, for instance BPMN 1 vs BPMN 2.

What is BPM?
All the discussion we had had so far had managed to skirt around the big question which hung in the air between us: What is the BPM?

Dennis believes the term is completely overloaded and that here is no clear definition (This is supported by my own research here). It can include - for example - a modelling capability, an execution capability, and a simulation capability. But the big question, Dennis believes, is "Will customers buy BPM (as a concept) or will they buy an application that solves a business need?" In other words are you trying to sell the concept (albeit ill-defined) of BPM to an end customer or are you trying to sell a solution to a specific problem or set of problems?

From an evolution perspective, Dennis believes that ultimately BPM will evolve along the same lines as database design and CAD - where models will drive the application end to end. In other words regardless of which application you use, information coming out at the end of it will be readable by all other applications. However he believes that we are ten years away from having something like this in the area of the BPM. BPEL is a move in the right direction, but is not there yet.

The social web
The social web has the potential to be a big area in future. Companies have to attend to different audiences, Dennis says. The people who are now coming into business and IT are much more aware of social media tools (Facebook, Twitter, instant messaging etc.) than those who have been in the industry for, say, 10 or 15 years. Technologies like these are also being taken up by non-IT people. (Incidentally one of the unforeseen upshot's of this 'social web' is that people looking for the K2-brand ski and skate products are coming to the K2 web-site and sending in questions asking "Where is the nearest stockist of K2 ski's?"). We talked about some of the collaborations that are starting to take place in this space. The reservation that Dennis had with these sort of unions related to issues of multi-vendor collaborations: There are always cultural issues to overcome and, when salesmen try to sell such a solution, there are always overlapping technologies which cause conflict from a sales point of view.

I posited the theory that the one ubiquitous piece of technology that exists is the mobile phone. Everyone in the western world appears to have one (sometimes two) and the state of the technology is evolving to such a stage that it would be irresponsible of developers not to attempt to make their solutions compatible with mobile technology of some sort When I posed this question to Dennis he replied "K2 products will operate successfully on any Windows-based hand held device. It will also operate on the Blackberry". As far as the Apple offering is concerned this could be problematic due to the base technology being Microsoft. However K2 will certainly look at delivering to Apple mobile devices should their customer base request this.

Managing change vs changing management
Managing change is a huge problem. Dennis quoted an example internally within K2. They use the K2 product internally for quoting to customers and have defined a strict quoting process along with specific prices and defined discounts. As this is being rolled out it has meant education has been needed and produced changes to the way people traditionally operate when quoting for K2 products. This is taking the users out at their comfort zone and has led to resistance. This problem within larger user communities becomes complex to manage.

Changing management is no less complicated. From the whole arena of changing management's perspective of BPM and a BPM tool it is now necessary to approach management with a business proposal rather than a vendor proposal. This manifests itself along the lines of "I have a proposition in which will allow you to . . . . . .. more effectively". So they are effectively changing things at a business proposition level. Dennis said that the problem with a lot of vendors is that they don't realise that IT is looked at as a commodity and not part of business. His exact quote was "They think of us as being the same as an electricity supplier" i.e. just another cost line on the income statement for most companies. (I like that quote!).

Open Source
I asked Dennis about open source and K2. He said in principle K2 were not against using open source. However, this had to be the right tool and the right intellectual property. For example recently they were looking at Domain Specific Languages -- the ability to define rules using grammar - i.e. using natural language constructs to define rules. Ultimately this wasn't used but it does prove that K2 are looking externally. I asked about the conflict that this may bring with Microsoft. Dennis said that the company is not beholden to Microsoft although they have an excellent working relationship with them

During the discussion Dennis made two references to simulation. Firstly he said that simulation is a low priority from a customer point of view. Secondly he said that simulation is something that they would continue to look out in future. A deeper discussion revealed that K2 feel there are some fundamental issues with simulation. A simulation product has to provide something that is useful for the end user. But getting an accurate simulation product involves having the ability to be able to simulate a large number of factors such as server loads etc. The upshot of all this is that it is very easy to produce a demo which looks good, has lots of flashing boxes, gauges, and colour codes but the end result of something like that will not always be useful to business. In his opinion vendors still have work to do in the simulation area.

K2 Underground
Early in the life of K2 it was decided not to build a commercial services enterprise which would be focused on the physical implementation of executables created after the K2 implementation. Instead K2 use a partner-led model with two different tiers of consultants: A level of large global consultancies, and a level of smaller more local consultancies. As a result they now have 300 signed up partners. Working alongside that is a community site which has been created called K2 Underground. The concept of the K2 community is core to the CEO, Adriaan Van Wyk. K2 Underground currently has 5000 people signed up to it and it is monitored by in-house engineers and technical staff. On top of this there are approx. 30 people worldwide defined as "K2 Insiders". These are the VIPs who are given privileged access to new releases and current intellectual property. In addition to this any intellectual property which was reviewed but not used in current products is also posted in area known as the "Black Market". Initially this was just started as a K2 Forum and although it was initially felt that this needed to be run and managed by a third party, it was ultimately brought in-house and became the foundation of the community site 'K2 Underground'. Chris Geier, who is the social media guru within the organisation, has done an excellent job of taking these concepts and growing them into a valuable service for K2 customers.

My Two Audit Questions
Reverting back to my old audit days I asked the two key questions that usually elicited the best response: "What keeps you awake at night?" and "What would you do if you were king for a day?". The main thing that keeps Dennis awake at night is the fact that there is always innovation in this field and it can come from anywhere. A company cannot rest on it's laurels and needs to be constantly improving and enhancing what it offers and how it offers it. He sees managing their current competitors, addressing volume markets and continuing to innovate at every level as critical to K2's future. As far as what would Dennis do if he were king for a day: Within the industry Dennis would like to keep enabling new audiences. Being able to promote something like K2 as a business tool not as an IT tool. Being able to allow none IT people to effectively use it in the same way as IT people do. Within K2 Dennis would like to see 'online' being used more as a medium to reach our audiences. This is starting with people like Chris Geier. But there is also large potential for more online presence, wider reach and driving purchases through the K2 online presence. The future has to be about moving from direct sales models to predominantly online and channel.


The whole discussion with Dennis took several hours and it is obvious to me that he has a very well defined, albeit technically focused, view of the market place that K2 work in. Whilst, personally, I see that as being one facet of the whole BPM arena, I think that a focus more on the 'business' side of things would benefit a lot of the current BPM/S vendors and maybe help to overcome some of the initial barriers to entrance that many companies have with BPM as a concept. Dennis made a tangential reference to this several times during our conversation which indicates to me that K2 are at least trying to address the business/technical dichotomy. But with vendors selling technical solutions I think that this is something that has a way to go before it occurs naturally in the marketplace.

Once again I would like to thank Dennis (and Chris Geier who put us in touch with each other) for providing their time to help me with this article.

Hopefully there will be other vendors out there who would submit to a few pertinent questions about their company and it's products. Please contact me if so.

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