Measurable benefit in BPM. Where is it? Part I

Lance Gibbs
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After getting back from the Gartner 2008 BPM Fall Summit in D.C. my intention was to write up a blog about the summit, highlighting the areas I thought were the most interesting. However, instead of the many topics which were covered at the event I am going to hit just one because it seemed to have the most confusion.  In short, why are there so few cases of companies articulating the measurable business benefit in deploying BPM? In a room of about 450 people using a show of hands Michelle Cantara, a Gartner analyst, asked a series of questions that went something like this- “Who has deployed BPM solutions which use BPMS?”, “Who has deployed more than 2 or 3 process solutions with BPMS”?, “Who has or is in process of developing a center of competency?”. In those cases you saw that about 90% could answer the first, 50% could answer that they have done more than one, and lastly about 20% said they have or are working on developing a BPCC. Then the question, “How many have had measurable business benefit in their deployments?”, only about 5% kept their hands raised. Factor in some margin of error due to the audience segments (companies, consultants, vendors) on the poll and for all practical purposes you are looking at a ratio somewhere around 1:20 who can attest/verify they indeed have calculated measurable business benefit. Amazing! First off I was not all that surprised based on my own personal experiences through the years but this continued large scale, fundamental issue of the lack of measurable business benefit in BPM deployments is a real problem for everyone; commercial enterprises, governments, vendors, consultants, you name it. Why? The short answer is that it creates a barrier to growth. At Gartner there was talk about things like Governance, Model-Driven Businesses, Transformation and the like. Truth is little of that forward looking, game changing, futuristic ideaology will matter if the fundamental concept of investment-risk-reward measurement is not attached to business process management. Very difficult to get unwavering executive buy-in to grow a substantial program if the only thing you can say is “we did a project and it felt good”. In fact, I have seen first hand the promise of BPMS be sold to some major companies who had great ambitions to roll it out “enterprise wide”, check in with them 6 months or a year later and maybe they have done one project, possibly two. What happened to that executive buy-in? For the most part, they lost interest and moved on. I could get in to the root-causes for only a project or two in a year but that’s a completely different topic, so let’s examine: where is the measurable business benefit in BPM? The last statistic I have is from Gartner in 2004 in a report called “Justifying BPM Projects” and cites the following: 10% of projects had no less than 10% IRR, 78% had more than 15%; wild numbers included 100% to 360%. I don’t have the actual sample size used, and considering what the world looked like then there were major variations of what a BPM project really consisted of. Suffice to say I am on the hunt for broader data which is more current and where source/evidence can be provided. When looking at the lack of widely known measurable business benefits of BPM deployments I can at least cite what I know from professional experience (consider these contributing causes, not necessarily root-causes):
  • Matter of will – “as-is” process measurement was viewed too hard, untrustworthy, or even embarrassing. Usually summed in a statement “we really don’t care about that aspect”.
  • Skunk works – BPMS was deployed in a very innocuous process area and used as a “prove out the tech” initiative, quite often a lot of features/benefits were not really utilized on the BPMS side
  • IT Centric Replacements – BPMS used to wholesale replace custom applications or other system(s). Usually these manifest themselves as previous improvement projects which failed; now trying BPMS.
  • Innovation – brand new processes with no real historical data available
I could go on but these are the big contributors as I have seen them. The more I consider this issue the more I think what would be helpful is answering the question, “How can I practically get to the baseline measures?”. At BP3 we are very measurement driven and firmly believe any company should be able to quickly get the core information so that their BPM endeavors have measurable business benefit. The next part of this blog post will focus on some basic techniques to get those core measurements with the hope that the improvements you choose will deliver the value they should.

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  • Great points, Lance. I would add, that the problem of a lack of measurable benefit is a huge problem for IT projects in general, not just or even especially for BPM projects. In BPM projects, however, it seems especially obvious that it is a solvable problem: the structure of a process lends itself to being analyzed for cost and, for benefit.

    I’ve been really impressed at how much *more* successful the projects I worked on were that had measures in place, and were able to anticipate and then measure and confirm, the benefits. Additionally these projects often lead to a second (follow-on) improvement to the original process that has an even better ROI because we learn something from the measurable improvement the first time around, and make a very surgical improvement to the process going forward that has very good yield.

  • Great points, Lance. I would add, that the problem of a lack of measurable benefit is a huge problem for IT projects in general, not just or even especially for BPM projects. In BPM projects, however, it seems especially obvious that it is a solvable problem: the structure of a process lends itself to being analyzed for cost and, for benefit.

    I’ve been really impressed at how much *more* successful the projects I worked on were that had measures in place, and were able to anticipate and then measure and confirm, the benefits. Additionally these projects often lead to a second (follow-on) improvement to the original process that has an even better ROI because we learn something from the measurable improvement the first time around, and make a very surgical improvement to the process going forward that has very good yield.

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