Have the BPM goalposts moved?

My last post asked Where is the BPM Market going? and opened the way for discussion (mostly on Twitter) about the changing state of the BPM marketplace.

Thanks to Craig, The Process Ninja, we can now look at the latest analysts offerings from Gartner and Forrester in the form of the Forrester Wave for BPM suites and the Gartner Magic Quadrant for Intelligent Business Process Management Software.

Wait! Hold-up now. "Intelligent Business Process Management Software", you say? What the hell is that?

Gartner has made changes to the classification of BPM solutions by redefining the marketplace. They are referring to this as "an evolution of the BPMS market" that is "centered on a new IBO use case". IBO in this case means Intelligent Business Operations. It is the same thing they did several years ago when the Magic Quadrant for Pure-Play BPM morphed into the Magic Quadrant for Business Process Management Suites.

In other words, they've moved the goalposts!

Further analysis of the underlying reason for this reveals that Gartner feels that iBPMS represents a maturation of the capability and is used typically at higher levels of BPM maturity.

But the problem is they are pushing the same products as they had in the previous Magic Quadrant  for BPMS - which they say cannot be compared with this iBPMS Magic Quadrant.

My recollection of the earlier Magic Quadrant showed a group of vendors in the top right sector of the diagram with a number of other vendors trailing down a diagonal to the bottom left. The new Magic Quadrant shows a wider spread of vendors, many of whom can be found in the lower right quadrant. In Gartner speak this indicates that they are visionaries, but lack the ability to execute on their vision.

So what am I to do if I am a Gartner customer looking to identify which vendor I can pursue to fulfill my needs?

I might previously have gone for a Metastorm offering (for example) as they were highly regarded and in the top right quadrant. They have since been purchased by Open Text and now languish in the lower left quadrant as being niche players with an incomplete vision and a lack of ability to execute. Does this mean the purchase has been a failure? Not at all. But the goalposts have moved.

I worked for American multinationals who would only look at vendors who landed in the top right quadrant of the Gartner grid. As of the current offering this would reduce the market down to three vendors. In many multinationals that's not even enough to put out an Invitation to Tender as a minimum of four vendors are needed.

But is that a problem?

Well it might be if you are one of the vendors who was in a more elevated position and now find yourself in a less elevated position, but if we look at the Forrester Wave report for BPM suites we find some sobering statistics. In a survey of 520 IT decision makers in Q4 2012, when asked "What are your firm's plans to adopt BPM tools", fully 43% said they were not interested or had no plans and only 27% said they were planning to implement.

When the same group were asked "What are your firm's plans to use Software as a Service (SaaS) to complement or replace your BPM software?", 52% answered that they did not know or had no plans to us SaaS and only 33% had plans to do so in 2 years.

In a market where Forrester have identified 52 different vendors competing in the broader BPM market, where Gartner have redefined the goalposts about what a good vendor is, and where half the IT decisions makers are not looking at using BPM, I sense a serious disconnect.

Who are the 52 vendors marketing themselves at? Can the market sustain this onslaught?

Photo Credit: OnTask via Compfight cc

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 See related info below

Dark processes and the implication for your business

Jim Sinur recently posted a piece which discussed Dark Processes. These are the unofficial processes used to deliver results that are not visible to management. Jim mentions that there are a number of ways Dark Processes (or Shadow Processes) come into being, these being - for example - when a variation is needed in a process that has no flex, or when an IT limitation inhibits the ability of a process to work as required or - my personal favourite - because Old Habits Die Hard. I wrote something akin to this a few years ago when talking about “The Way Its Always Been Done”.

Jim finishes up his piece by saying

“Dark processes are here to stay. Let’s not fear them, but reduce the number of opportunities to create and feed them for no good reason. Intelligent business operations allows for intelligence built into processes to reduce the need for dark processes.”

I couldn’t agree more.

What does this mean?

But lets have a look, for a moment, about what these dark processes mean for your business, shall we?

• If you have a process which is inflexible enough to deal with variation, or where IT inadequacies have put some sort of constriction on the ability of people to do their job, you will get a shadow process building up. I have encountered these in many, many organisations. 
• If you have a finance department that uses Excel as a means of creating management information using data imported from your ERP and ‘manipulated’, than you have a shadow process.
• If you have employees keeping paper records of transactions with customers because the customer wants something that the system can’t appropriately handle, you have shadow processes.

The existence of shadow process do - in themselves - indicate some sort of underlying issue that needs to be dealt with. Why is an employee having to record transaction off the books to assist a customer? Why are the finance department recording different figures for MI than are shown on the system?
Sometimes the issue is simple. In the case of Finance it could be that they are taking figures from several systems and using Excel to amalgamate and ‘pretty them up’. But sometimes there is a deeper-seated underlying reason.

I worked at one organisation that took centrally affiliated reporting criteria and ‘massaged’ the figures each month in Excel prior to submitting them to corporate for review. The reason was that they were accounting for things in a none standard way and knew that taking the figures directly from the system would show them as having sold less than they actually had. Rather than change the way they accounted for things they decided to alter the figures instead. This resulted in a shadow process which allowed them to do what they needed. The issue came to a head when I implemented a new financial system that allowed all figures to be queried centrally without the affiliate themselves doing any manipulation of the data. That particular shadow process didn’t last long.

How do you remove them?

But overall a shadow process needs to be identified and the underlying cause removed. But how do you do this?

As Jim himself says:

Intelligent business operations allows for intelligence built into processes to reduce the need for dark processes

What this means, in my opinion, is that when new processes are put in, adding a sensible amount of intelligence into the processes will reduce the scope for a dark process to appear. But this doesn’t remove the existing ones that we haven’t found yet.

Identification of a dark process is - by definition - quite difficult. If you knew the dark process existed you would try and stop it (or understand why it exists).

One solution is the one listed above: replace their process with another one and see what breaks. That’s a little radical for my liking (but very effective)

Another slightly less radical way of doing this is to put someone new into the role and ask them to report back to you with their impressions of what happens. You can compare that with what should happen (You do have documented your processes, right?) and identify the discrepancies. But this isn’t always the best thing to do. Employees get distrustful when you suddenly introduce someone new to the company, and rightfully so in this case.

No, the easiest way to identify a shadow process is to go, systematically through your existing processes and document them appropriately. That way you will understand what the employees are actually doing rather than what they think they are doing.

I facetiously asked earlier in this post “You have documented your processes, right?”. In actual fact this appears to be a key factor in understanding where dark processes occur. Get your users into a room, start to ask them what they do. Work through the details until you understand the points at which the current process breaks down. Sure, it'll take a while, and probably cost you a fair amount of money. But compare that with the amount of money you're losing by having the processes there in the first pace and you'll understand the importance of doing this.

Summary

We know they're there. We know they're happening. Understand that they happenmand understand why they happen. If you can life with that, fair enough, go ahead and do what you do. But if you think the dark processes are costing you time and money (and they almost certainly are) then you need to start looking in detail at where they occur and trying to stop them.
It's the only sane thing to do.

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All information is Copyright (C) G Comerford See related info below

Gartner Releases Review of Microsoft BPM Strategy, Recognizes Value of Business Process Alliance

Check out this article I found at blogs.msdn.com

Posted via web from The Process Cafe Posterous

BPM: Pulling the threads together....

I was reading a couple of different BPM articles recently with fairly contrasting topics and it occurred to me that they were effectively trying to say a similar thing in different ways.

The first article was from Earth Times (via Sandy Kemsley from Column 2) which said "An April 2009 survey of 781 business, government and IT managers revealed that just 15% of respondents in organizations that have implemented Business Process Management (BPM) systems say that worker productivity increased more than 50%." The second article from IT-Director.com quoted Terry Schurter at Hydrasight saying that "Hydrasight believes BPMS vendors have previously failed to deliver on their promise because of product complexities, system interdependencies and limited capability to address the needs and expectations of business users. As a result, many of the purported benefits of BPMS solutions remain unsubstantiated and unrealised."

Effectively the first article was saying that the implementations haven't been as succesful in reaching their objectives as was desired and the second article was saying that there are extenuating circumstances with the vendors about why they aren't able to deliver on their promises. The Earth Times article quotes a survey as saying that 86% of end users of BPM applications often or occasionally design their own workarounds due to system inefficiencies. 86% ! The same survey quotes that almost 30% of end users are not involved in the improvement of their processes and supporting systems. I think these two figures are connected.

Personally I think this all links back to a comment made by Dennis Parker of K2 in a recent interview I held with him. According to Dennis "Evolution of model-based execution technology is at a very early stage in its life cycle". By this he means that the whole BPM(s) market is still immature with regard to what it could do and how it could do it. I think this manifests itself in the following ways: The standards needed to make this happen are not yet fully mature. The functionality that users expect to be able to have in a software is not always there and - most importantly - the BPMS vendors still see themselves as technicians providing a technical solution for the business rather than busines partners providing a business solution (although this is still starting to change). There is a very real need for proper user driven BPMS solutions rather than psuedo-end user ones. This will ensure better buy-in from your end users as well as less need to create workarounds to make the system function.

If we follow Dennis's thinking this is probably another 5 to 10 years away. In the meantime we can probably expect more depressing surveys telling us that BPM doesn't work and we aren't getting the benefit.

On the brighter side Global 360 (who commissioned the survey mentioned above) did - through a post from Jim Sinur (ex-Gartner and now back at Gartner) - also say that process is free. I align with that theory and stick by Jim's assertions. But he does say in his post that 'well scoped BPM projects approach a 15% internal rate of return'. That's not too shabby, I feel.

BPM: "A Matter of survival?" - I think so (and so does Gartner)

"For struggling companies, business process management is a lifeline that helps them survive by reducing and avoiding costs in this volatile and turbulent economy." So says Gartner - one of the leading business research organisations in the world ("It's a Matter of Survival: Use BPM to Drive Out Costs", 12 March 2009, Elise Olding, Gartner RAS Core Research Note G00165528).

I totally agree. In today's cost conscious environment there are only a few guaranteed ways of reducing your costs or increasing your bottom line. One is to reduce staff - the option nobody really wants to do. The other is to become more effective and efficient with what you already have.

So follow the Gartner advice:

• Gain a competency in BPM now.
• Before you wield the cost-cutting axe, construct a high-level
  business process model to understand the impact of head count and
  resource cuts across the enterprise so that you do not decrease process
  efficiency and inadvertently drive up costs.
• Use BPM to manage your business case justification and measurement processes.
• Identify processes where costs may be high and there is not a focus
  on measurement. Target one of these processes for your first or next
  BPM project, and demonstrate tangible results.

These four options are actually incredibly straightforward to do although they are shrouded with mystery, misinformation and misunderstanding ("The 3 Mis's"). That isn't to say they are easy though. It presupposes a commitment at senior management level to becoming better at what you do and to creating an appropriate BPM capability.

Let's look at some of these in a little more detail :

Gain a competency in BPM now. The world of BPM is deemed to be complicated because it encompasses such a large area of specialisation. There is enterprise strategy, process modeling and analysis, process execution, decision management, Six Sigma, process governance and goodness knows which other buzz words - all of which muddy the waters. The fact of the matter is that BPM is a little like the Wizard of Oz - it seems bigger and more important than it is, but in fact there is a little man behind the curtain who is controlling everything. Of course it helps if you have someone who has done this before working with you (Hint, hint - a small consultancy you may be aware of), but the key is make sure you have someone senior who is looking after this and has responsibility for making this happen. A BPM competency could be as simple as having one individual in the organisation who has an overview of every project you are doing to ensure there are no 'silly' overlaps, duplications or mis-communications from a process point of view. Or it could be a whole department who have had specialist training on BPM methodologies, Enterprise Architecture, modelling notations, decision management and supporting tools. The key point here is to make this someone's job and hold them responsible for making it happen.

Before you wield the cost-cutting axe, construct a high-level business process model to understand the impact of head count and resource cuts across the enterprise so that you do not decrease process efficiency and inadvertently drive up costs. Common sense, I would say. But as we all know, common sense isn't that common. This, basically, is a long way of saying 'look before you leap'. Don't think that removing the most inefficient part of your business will immediately slash your costs, because often it won't. There are linkages between all parts of your busienss - whether you think there are or not. As a result removing one part of the support infrastructure - such as, say, an inefficient department (think 'Customer Support Group') might, indeed, cut down your overhead. But at what cost? Perhaps the work performed within that department updates other parts of your customer information and as such removing it will leave gaps in your data and understanding. These gaps manifest themselves as problems later on in your process - problems which will inevitably take longer (and cost more) to fix than you saved by canning the department. Use something plain and simple to document your high level business. Start with brown paper and post-it notes if you want. Transfer this to (eugh!) Visio for a pretty picture (or even worse, Powerpoint). But whatever happens ensure you capture key information about the process: Inputs, outputs, responsible roles, work performed, and measures. When you've finished take a look and try to understand simple things such as "Does all the output from process A go somewhere else?" If it doesn't, why are we producing this? "Does all the input needed for process B come from somewhere else (in the right format to be used)?" If it doesn't, then what part of the process should be in place to make this happen? A simple model of your business (even at a high level) will ensure you have an overview of the impact of removing or changing one part at the expense of the others.

Use BPM to manage your business case justification and measurement processes. This relates, primarily, to identifying those parts of the business which would merit being shut down (or, contrarily, those which are marked for shut down but which shouldn't be). A review similar to the one mentioned above will provide you with some valuable data to help you understand the key impact of a shut-down decision. Imagine being able to go into your CEO with some valuable BPM-sourced information which will tell him or her that the decision he or she is about to make regarding shutting down the internal market research department is wrong. With appropriate data you can prove that this decision might come back and bit him or her on the butt within 6 months because data from that department feeds directly into the marketing function and effects targetting of marketing dollars (as an example). There are other examples where this would be apropriate. The key here is to make the decision on the basis of a gestalt view of the business rather than just a narrow, money based view of a single department.


Identify processes where costs may be high and there is not a focus on measurement. Target one of these processes for your first or next BPM project, and demonstrate tangible results. What you don't know about your processes may be costing you money. I think this is very much linked with the second recommendation. If you have followed that recommendation and documented your business processes (even at a high level) this is the opportunity to identify high-cost processes. It involves doing a little more work (or getting someone in to do the work for you) and digging a little deeper. But at the end of the day it then becomes a strict mathematical equation to understand which process costs you more, or which ones do not have the appropriate level of measurement. Target these processes and put together a small, focused, project to solve the problem. It will reap dividends.

Summary:

As Elise at Gartner says "BPM can be a powerful tool that plays a critical role in the survival
of your company — it can reduce costs, ensure compliance, avoid mistakes and create the visibility needed to manage processes as assets to your enterprise." Who am I to argue?

I would encourage you to read the Gartner report, understand the detail held within it and read it in context with the advice offered here. It is possible that the thing that is stopping you from looking at BPM in your organisation might not be barrier to entry at all. In these days of reducing income and increasing costs, can you really afford not to look at ways to increase efficiency?

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Your criteria for choosing a BPM tool?

Image via Wikipedia

When you want to buy a BPM tool, what are your evaluation criteria?

I am monitoring and participating in a discussion on Linked In about the criteria people use to choose a BPM tool. There are a couple of interesting points that are surfacing.

The discussion involves a couple of vendors and a couple of consultants. This, ideally, gives both sides of the discussion : what do the vendors think is the ideal criteria and what do the consultants think is ideal based on their interaction with the customers?

Initially a vendor identifed 10 points as potential criteria:
1) Provides process execution and state management
2) Offers model-driven composition environment (product modelling studio)
3) Interacts/integrates with EDMS and CM
4) Enables collaboration
5) Integrates with other apps (SOA)
6) Enables BAM and event-based notifications
7) Provides simulation and optimizaton
8) Includes business rules engine/capabilities (e.g., roles, responsibilities, policies, procedures, approvals, deadlines, integrations, etc.)
9) Provides overall admin, security
10) Provides a registry for process components

Fundamentally there is nothing wrong with these criteria. However that same vendor indicates that the ACTUAL questions that customers ask are:

- Is it easy to use for my developers, business analysts and users?
- Does the product really work? (Does is have a good modelling environment? Can I easily create forms and ties those forms together with the workflow model to launch applications? How configurable is it?)
- How are other companies like me using the product? Have they had success?
- How fast can I get something implemented?
- Is it the right price?
- Does your company and/or partner have experience developing/deploying applications like I need?
- Is your company strong and well positioned to succeed over the long run?

Again I like these criteria. They seem closer to real-life issues and questions than a hypothetical list of criteria that a vendor would like a customer to ask.

One respondant (again a software vendor, but focused on the Open Source arena) identified the following 5 criteria from his market research:
1. license price
2. maintenance price
3. implementation costs (what fits some of the criteria you mentioned)
4. vendor locking
5. user basis

This is interesting because, of course, he is looking at a cost or price bias when dealing with his customers.

I suspect that in an ideal situation customers should be focusing on getting a tool which is both suitable for their needs, easy to use, well supported and well priced. I think they realise that - at the end of the day - a BPM package is not necessarily distinguished by its functionality and cost but more by the ability of that tool to fit the needs of the job it is being supplied for. After all if there was one 'best tool' in the BPM space it would dominate the market to such an extent that Gartner would not need to produce a Magic Quadrant every year or so. The current MQ indicates that the market is quite tightly bunched around the central point of the 4 quadrants with a few minor outliers. This indicates to me that either all companies are looking for a similar thing (and the vendors are catering for that) or the market is so widely spread in terms of user requirements that the software has developed to be general enough to deal with most of these requirements. I suspect it's a combination of both

What are your five main criteria for choosing a BPM solution?

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Click this link and follow the instructions to get this book.

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All information is Copyright (C) Gary Comerford

The BPM Magic Quadrant - My thoughts.

I suppose that some point that I had better comment about the Gartner magic quadrant report for BPM that was released last week. Actually, there is an excellent article about this very topic on the EbizQ web site which can be found here.

Basically, and I align myself very closely with the sentiments in that article. It says that the magic quadrant - or similar analyst rankings - are actually a little bit meaningless.

This is for a number of reasons: primary of which is the fact that the basis on which the reports are created is not always comparable. For example is the Gartner magic quadrant for BPM defined in the same way as the Forrester wave report? Even more pertinent to this point, is the Gartner magic quadrant for 2009 created on the same basis as the Gartner magic quadrant for 2008 (even though there wasn't actually a Gartner magic quadrant the PM for 2008).

Gartner, of course, use two axes in their magic quadrant, the first one being "ability to execute" and the second being "completeness of vision". "Ability to execute" doesn't actually mean the ability to actually execute a given piece of functionality within their software. What it means is the ability to to influence and corner market share with the product that they have. Naturally some of the larger companies that have large marketing budgets are able to corner more of the market than smaller companies which exist out there. Furthermore it appears the Gartner have a set of criteria which they impose on companies wishing to be considered eligible for the Gartner magic quadrant. What we don't understand is have the criteria changed since the last time the BPM magic quadrant was published two years ago?

One thing which occurred to me on reading Gartner magic quadrant for BPM is that there appear to be a large number of companies competing in the space. I don't have the previous couple of documents to compare it too, but is the just my imagination that this now appears to be a very crowded market sector? In fact, it appears that every single day I'm receiving some sort of news article which indicates that the new vendor is starting to dabble their toes into this particular part of the market.

I did find it interesting, however, that Gartner did not deem the Microsoft's suite to actually be a fully fledged BPM Suite of tools. I'm not sure what this indicates and I would like to understand Gartner's rationale for excluding them, but I can't say I'm entirely unhappy.

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Reminder: 'The Perfect Process Project' is still available. Don't miss the chance to get this valuable insight into how to make business processes work for you.

Click this link and follow the instructions to get this book.

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All information is Copyright (C) G Comerford

The father of process is not happy!

Dr Geary Rummler (who died on October 2008) did an interview with The Gartner Group prior to his death. In it he discusses a wide a varied range of topics, all related to process and his role in it. Check out the interview here:

I was particularly taken by one of the first things he said in connection to a question about the impact of process management, process improvement, and process re-engineering:

Well, I'm "underwhelmed" by the impact that the field has had. The field – I think – is broader than process improvement. I believe "process" can have both strategic and tactical impact. Most of the work to date – going on for 15 to 20 years – has been about process improvement, which I think of as tactical.

He also has some interesting things to say about BPM:

When you go to various BPM conferences BPM appears to mean the latest software thing. And if you walk down the vendor aisle at these conferences, by the time you reached the end you'd be convinced that BPM is all about technology.

This was in response to a question clarifying the meaning of 'BPM'. Dr Rummler describes BPM as :

"So, we're in agreement that what's necessary is a sound underlying methodology for looking at, understanding, and managing processes. And that there is a process improvement and management methodology that is distinct and separate from technology. And that the methodology might cause you to apply technology as part of what you're doing, but it's not all about technology"

He also talks in some depth about the different levels of process definition which is something I have been struggling with. Basically according to his thoughts (See this diagram) there are several levels at which we can define processes but the key is to use the value chain hierarchy (levels 2 and 3) to map the process change back to something that is meaningful to the business and the customer. If you can't do that you are not adding the right level of value to your organisation. He then goes on to say:

"Consistently working on a Level 5 subprocess, buried in a function, disconnected from the business goals at Level 2 might be interesting and get you a high score in your process-maturity rating, but it sure looks to me like a waste of time and money. And it is the kind of waste of resources that causes senior management to wonder if this process stuff is getting them the payoff they were led to expect."

In closing he made the following remark, which I think is critical in the current environment

It is very difficult (and dangerous) to sell BPM on features alone. And I'm betting that the majority of those CIOs who say BPM is their No. 1 initiative are going about the task without understanding and communicating the benefits of BPM to their clients. More BPM disappointments in the making

Take heed from the man who invented the discipline. He's not happy with what's happening and he's here to tell you why!

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• The Information Technology Roadmap (computerprogramming.suite101.com)
• Making sense of BPM (theregister.co.uk)

5 Take-aways for business process work...

Amber Naslund over at Altitude Branding has produced a post based on an interview she did with Scott Monty from Ford Motor Company. The subject of their discussion was Social media and how Ford are approaching it. Amber came up with 5 takeaways from their discussion. I recommend reading the post alongside this one.

The reason I'm pushing her post is because I can see a large number of parallels between her take-aways and the world of business process management (lower case letters, rather than 'BPM' in upper case)

Let's go through them:




Strategy First.
As Amber says:

The tools don’t matter a fig. They’ll change, ebb, flow, and go away. But you have to approach social media from a holistic viewpoint: how is this going to touch and affect what I’m doing across the board, and what do we want to accomplish? (Don’t forget that goal-setting is part of strategy).

I believe the same can be said for business processes. Yes, you probably need some sort of tool to help you manage your process definition and evolution, and yes, Visio may well be what you end up using (although you know my thoughts on "Visio - the Devil's tool"), but at the end of the day it is the strategy for your process initiatives that is more important.

• Why are you managing your processes?
• What do you hope to achieve through doing this?
• How are you approaching the whole area of governance and capability?

These are the questions that you need to be answering before you can even start to think about the tools.

Individual faces matter.
It is a sad truth today that in many organisations the big command from corporate "Thou shallt follow this diktat" is likely to alienate more people than it converts. It's worth remembering with business process management (and with pretty much any sort of human facing change) that adoption of the change is a human process. Faces matter in this case. You need to put a face at the head of the effort. Someone who is approachable and will listen to what people need to say. Not necessarily someone who will completely kow-tow to whatever is asked, but at least a face that people can talk to.

Business Process requires commitment.
A good business process programme will touch many areas of the business. As such it will require good management buy-in. The benefit of getting the management buy-in is that you can then start to focus on commitment from other parts of the business. I've worked in companies where business process change was pushed through in a bottom up approach rather than a top-down approach. Believe me, the difference is phenomenal and huge. it is much easier to push things forward with the right commitment at the top.

Keep your feet on the ground.
Amber says :

It’s very easy to get swept up in the idea that everyone and every business ought to be using the latest and greatest shiny new tools. But those aren’t always the best, or the most practical, especially considering that most customers are operating in the mainstream and have never heard of some of our more fringe tools ..

This is even more apparent when you come to something like business process management. This tends to work on a 'hype-cycle' basis (see this from Gartner regarding the hype-cycle) - where people tend to get caught up in the fever of what can happen and then expect it to deliver more than it will. The ability to keep one's feet on the ground and link your efforts to a reality rather than a dream are paramount to making things like this work effectively.

Measure based on your goals.
I've written before about the issues with measuring processes. I've also written about Comerford's Three Laws of Metrics. So it's easy to understand why I have an affinity for this particular take-away.

It all comes down to the simple question of "Why are we doing this and can we prove that it is adding value?". If you can't measure whether you are being successful in what you are doing, you can't measure whether this is something that needs to be continued. Nobody wants to be in a situation where you are actually removing value from a value chain, or adding overhead unnecessarily.

Again, as Amber states:

The entire point of measuring is to learn. Analyze how you’ve done against your goals, but don’t stop there. Figure out what’s next. Where to keep fishing, where to cut bait. And don’t discount the anecdotal evidence of what you’re doing. It matters, too.:

Sage words, and ones we would all do well to listen to....

(Photo courtesy of Plindberg. Released under a creative commons attribution licence)

Indian Outsourcing - What a turnover!

I read an interesting article in the Indiatimes today.

It said that Indian outsourcing companies are experiencing a 23.5% staff turnover rate. This is high in just about any industry, but when you consider that the large majority of the outsourcing individuals in India are highly qualified graduates, it takes on a different meaning.

What is effectively happening (as the article quotes) is

"The BPO industry hires a large number of graduates who are bright and ambitious. From our analysis, the overall compensation structure design is not competitive when compared to general market practices. This means that BPO employees do not receive as much cash-in-hand as their peers in other industries. When you add unattractive remuneration to working shifts, lack of career development, and monotonous tasks, it is not surprising that employees leave when offered a small salary increase,"

So what is the impact of this? Well, as with any change of people, there will potentially be a drop in the service expected. Handovers may be loosely done and things may get 'dropped' as a result. This will, in turn, lead to a loss of confidence in the outsourced BPM function in India leading, potentially, to a withdrawal of western companies from using this function.

The irony of it all is that the very thing that is leading companies to outsource BPM to eastern countries (High education standards and low cost) may be the thing that causes the service to fail.

Indian companies will - in their turn - start to increase their salaries to aid retention. This increase will be passed on to the western organisations using the service. This will, in turn, decrease the attractiveness of outsourcing to Indian companies and the result will be the same.

With Gartner identifying a large jump in the need for BPM services, this is not good news for India.

What can they do about it? Comments, please.....

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The Gartner View

The Gartner Group are the owners and developers of the Magic Quadrant principle (basically mapping of a companies ability to execute against it's completeness of vision) Magic quadrants are available for many market sectors and software's.

My primary interest is in the BPA software

Here is a link to the BPA Magic Quadrant for 2nd Half 2007/ 1st half 2008

I was particularly tickled to read the section entitled 'Three Categories of BPA Tool Buyer Focus' There is an important part of that section that talks about Microsoft Visio and it's use in BPA. Basically Gartner are re-iterating the point I made in earlier posts that Visio is a great drawing tool, but if you want something more robust you'll need a modelling tool.

One key thing to notice: Proforma as a vendor is still appearing in this model as the information was collated as at June 2007. Metastorm took over Proforma in August 2007 so i would expect to see that change reflected in the next edition of this Magic Quadrant

Process Maturity: Is Gartner wrong?

Nick Malik on the Inside Architecture blog posts a musing on the nature of Process Maturity. His contention is that the Gartner Maturity model is predicated on the fact that you need to measure where you are in order to get from one level to the next. "This makes sense", you think.

But Nick is saying "What's the business driver to measure processes capability when the reason we're doing this is to improve our business?" Surely a company should focus on improving how they do things rather than focusing on measuring how good they are at managing processes? Once they start to get improvement in their business process they should start to look at how well they are managing their processes. This will then lead them onto the next maturity level etc. etc. etc.

Good contention, Nick. I'm with you for a large part of the way. I think where the argument falls down is in the details. Sure, I can give Visio ("The Devils Tool") to a bunch of users and get them looking at how they do things with a view to making them better, but in the long term is this the best way to build a process management capability?

In my mind the Maturity Model is linked in with the level of sophistication a business has in the capability of process modeling. If I give the wrong tools to the wrong users who use the wrong methodologies then my processes aren't going to get much better. This is where a maturity model comes in.

Having said that I am 100% behind Nick when he says "The only thing more dangerous than measuring nothing: measuring the wrong thing" I wholeheartedly agree and refer you to Comerford's Three Laws of Metrics as examples.

Back in the days when I ran a European business process shop for a US Multinational, they seemed to spend an inordinate amount of time trying to benchmark themselves against other folks. This used a great deal of the Maturity Model concept. But like Nick says it missed the fundamental point of 'Are we actually doing any process modeling that is adding value to the business?' At that point the answer was 'probably not'. I'm not sure where that organisation is now, but I suspect they are still as concerned about knowing where they fit against competitors than how well their processes actually work.

An interesting read. Well worth a few moments of your time.

(Photo courtesy Bettyspics)

Technorati Tags: metrics, processes, gartner, BPM

Global outsourcing to grow 8% in 2008

The Gartner group have just released a survey indicating that they feel global outsourcing (including Business Process Outsourcing) will increase by 8% in 2008

A Business week article about this can be read here

A key point to be made is

• More companies are favouring smaller deals and splitting services between several providers and countries, the Gartner report found. This shift away from large high-value deals is partly responsible for the fact that publicly reported BPO and ITO contract values fell by 50 per cent in 2007

So in summary - More BPO work to be had. but potentially it will be in lots of smaller chunks.....