When we wrote a similar Advisor in early 2008, we noted that many were concerned about the possibility of a recession. We suggested that in spite of such concerns, we expected 2008 to be a good year for BPM, and overall, 2008 was a good year for business process. Most of the leading BPM vendors and consultants reported record years and companies reported an increased number of process change projects. Unfortunately, in spite of a good beginning and notable successes, the recession everyone was concerned about in early 2008 became a major financial crisis by the end of the year.
By October, much of the world was concerned about the financial meltdown that was spreading throughout the world. In the last three months, many companies responded to an uncertain future by cutting back on new projects, cutting budgets, and laying off workers across the board. The financial industry, one of the driving industries in BPM, is in very serious trouble. The auto industry, perhaps the best overall guide to the financial health of international manufacturing, is also in serious trouble. The best that can be said is that many companies are turning to business process practitioners to assist in cost reduction and improved performance.
On the other hand, governments throughout the world have rallied and are committing unprecedented amounts of money to kick-start a recovery. Money has been made available to banks which are consolidating very rapidly and to the auto industry, which promises to accelerate the transition away from cars that are heavily dependent on gasoline. These cash infusions, allowing for a bit of lag, should generate projects focused on combining or redesigning business processes on a large scale. No one knows, with certainty, how desperate the financial situation will become or how effective various governments will be in their efforts to ameliorate the situation. In these circumstances, anyone trying to predict what to expect in 2009 can only indulge in very uncertain speculation.
Our hope - we wouldn't presume to call it a prediction - is that the various government initiatives will counter the current downturn, and that the world economy, as a whole, will begin to improve significantly in the fall of 2009. Between now and early 2010, however, we expect to see a lot of confusion in the business process market.
Smart, well funded companies will see 2009 as an opportunity to reorganize their processes and eliminate fat. Less insightful companies and those in poor financial shape will undertake more desperate measures that will range from radical cuts to wholesale shifts in their business models. In some cases, business process practitioners will be asked to play a major role in helping their companies shift their priorities, while in other cases they will be considered expendable - overhead to be reduced for the duration. In a similar way, BPM consultants will either be hired to help companies with high priority process changes or ignored as the companies struggle with their own internal demons. Let's consider the various process domains in a little more detail.
Enterprise Level Activities
In 2008, most companies were focused at the process level - seeking to understand and improve their organization's core processes. Only a minority were mature enough to undertake serious enterprise level work. Defining enterprise level process architectures, creating enterprise-wide process performance measures, and creating a central governing BPM group to organize and prioritize process work are all major undertakings. They are often considered overhead tasks and are put on hold when economic times are tough. Thus, we expect many companies that have been exploring enterprise process architecture work to delay those efforts in 2009.
At the same time, however, we expect companies to undertake a number of major mergers and to launch a variety of major outsourcing projects. For example, in the US, many of the leading banks are now engaged in mergers. In each case the merged banks are going to have to figure out how to merge and redesign their processes. There will be layoffs as the consolidations take hold, but there will also need to be new processes and new IT and training efforts to effectively implement the required changes. Most of this will be done at the process level, but some of the organizations involved will have to work at the enterprise level to create new architectures to provide a framework for consolidation.
Process Redesign and Improvement Activities
As we observed in our December Advisors, we expect that most of the process work in the next six months will occur at the process level. Companies will want to save money. They will look for ways to make processes leaner and more efficient, reducing, wherever possible, excess labor. This will be an opportunity for some companies to create new jobs that combine tasks and empower employees to offer customers more comprehensive services. Similarly, companies will look for ways to automate existing processes or to outsource activities that can be performed by external suppliers for less cost.
Implementation Level Activities
Most BPMS vendors will be in for a tough time. In a tough market, companies are more likely to choose dependability over innovation. Thus, the smaller, newer BPMS vendors will be hard pressed while the well established vendors like IBM, Oracle, and Software AG will gain market share. We expect that fewer companies will launch new BPMS acquisition efforts in 2009, so the emphasis will probably shift to helping companies that already have BPMS tools to use them more extensively and effectively. In a similar way, we expect 2009 to be a year in which companies pay more attention to improving the performance of existing employees, and such initiatives will create opportunities for those who specialize in human performance improvement and related disciplines.
The BPM Community
2008 witnessed a lot of consolidation in the BPM community itself. In 2007 there were lots of BPM conferences. In 2008, and especially in the fall, as companies slashed travel budgets and conference attendance funds, BPM conference attendance declined significantly. A few conferences prospered, but most did not. Expect fewer BPM conferences and reduced numbers of attendees in 2009.
BPTrends will continue, in 2009 as in the past, to try to provide business process practitioners with the best available information. Given the nature of the times we will work especially hard to publish articles on strategies that BPM people are using effectively and to provide case studies that show how companies are turning difficulties into opportunities. We urge all readers involved in successful business process initiatives to consider writing an article for BPTrends and sharing their experiences with the broader process community. Proposed articles should be submitted to BPTrends Managing Editor, Carolyn Potts, at
One last note of optimism - it is encouraging to those of us in the BPM community to note US President-elect Obama's recent appointment of Nancy Killefer to the newly created position of Chief Performance Officer. We hope the creation of this position sends a message to organizations, both large and small, that BPM and performance improvement are critical factors to the success of any organization, in both good times and bad. And, we encourage all our readers to look for ways to initiate, improve or optimize their process improvement programs, now.
We wish all our readers every possible success in the year ahead.
Paul Harmon and Celia Wolf