BPM Vendors: Too Broad?
is BPM the jack of all trades and master of none? It is certainly a fair question. As he points out, BPM is broad, maybe overly broad. And he also points out that based on the punditry, you would expect BPM to be a much bigger market than it is today. Of course, part of the problem is that many companies, wanting to leverage the BPM banner, will relabel what they do as “BPM” and this can help stifle the growth of the real BPM providers. He then outlines four challenges for vendors:Rashid Khan, formerly of Ultimus, asks the question:
Its hard to argue with these points – points 1, 3, and 4 I can agree with without much reservation. And #2, I would say it is actually a tough choice for the vendors: either bulk up the product to address these markets, or keep the product more focused but leave a lot of work for the customer to adapt the product to their needs. Either path is risky. Rashid proposes that vendors focus on horizontal slices of BPM (e.g. modeling, or workflow automation) and interoperability, in order to solve the focus problem, and in order to help customers answer the “what does it do” question… But this conundrum affecting BPM affects the software business as a whole. CRM companies wonder if they should also be sales process companies, and vice versa. MRP companies became ERP companies. ERP companies became “Stack” vendors. And before ERP was well-defined, there was a lot of jockeying for what was “in” or “out” of ERP. The key economic forces compelling software companies to broaden their offerings are:
- The market, defined as the sum total of all the things BPM can address, is very large.
- No single vendor or product can address the entire market. And if they try to do so the product becomes bulky, expensive and hard to maintain or upgrade.
- Customers have a very hard time discerning what BPM solution is best suited for their needs. And if there is one product that will suit their needs, it is unlikely to meet some other needs in the same organization.
- Vendors are unable to say no to opportunities that potential customers define as BPM but do not fit in the profile of what the vendor can deliver. BPM products always have recourse to customization via programming which theoretically can be made to do anything, albeit at the cost of agility. So vendors pursue opportunities that may not make sense.
- The need to avoid getting flanked by a competitor who does your focused product, but also does other products.
- The need to flank your competitors in similar fashion.
- The need to get the most value out of your sales force overhead that you can – more products to sell means that the sales rep has more opportunities to take advantage of their good relationships by selling more software.
- Increase the odds of winning a deal (flanking/positioning)
- Increase the lifetime revenue per customer (more software products/licenses to sell)
- Increase average sale per transaction (more software products/licenses to sell)