Derek Miers made the 6000 mile trip to Las Vegas to attend IBM Impact.  One could have forgiven him if jet lag dampened his enthusiasm for the material, but far from it.  I’ve been following Derek’s writing ever since Lance Gibbs introduced me to his work several years ago.  Recently he joined Forrester research, and so these days we find his blog on their site.

There was a pretty important message there. A message that was being communicated to the faithful. And whether you like it or not, IBM has a lot, and I mean a lot, of faithful followers. I didn’t do a scientific assessment of the number of IBM badges versus non IBM badges, but even if half of the attendees were internal, there were plenty of customers there too. And those internal folks were also being recruited as emissaries and evangelists for the new mantra.

Prior to attending Impact, I hadn’t realized that it was *also* a vehicle for recruiting evangelists within the IBM body politic.  Further down Derek writes:

The message was made plain and simple – that BPM was the way to run your business. That [...] process models were central to the way in which the firm operated.

This is quite an achievement for BPM – to have one of the largest software firms in the world fully get behind the BPM message. But the real punch:

The thing that really surprised me was quite how quickly the Lombardi acquisition had been “blue-washed” – taken to heart and internalized, and now, very much part of the proposition that IBM is taking to the market.

I, too, was quite surprised. I went prepared to see Lombardi pushed to a small corner of a large conference and ignored.  Instead, the day long Lombardi sessions were pushed to a corner and overflowing, and the message was coming across in keynotes and sessions throughout the conference.  And the IBM execs paid great attention to the Lombardi offering.  Derek believes that the Lombardi folks were surprised by the power and reach of the IBM brand – and I agree – the body language and interactions with IBMers spoke volumes.

The long path toward “mainstream” for BPM appears to be arriving at last.  I always said that I didn’t think independent BPM software companies need fear Oracle or IBM or SAP until they really were eating, breathing, and sleeping BPM.  I used to quip that until I heard Sam Palmisano talking about BPM, I wouldn’t be too worried.  I didn’t believe they would ever really make this switch from thinking of BPM as a checkbox feature in SOA to being actually the chief value proposition of their software stack.  IBM’s purchase of Lombardi didn’t convince me that IBM’s executives were really sold on BPM rather than just being opportunistic and optimistic about the BPM space.

Attending Impact last week, the chief value proposition sure looked like BPM.  And I have been proven wrong by one of the stack vendors: they really can learn to make process front-and-center.  I’m just glad I’m in the BPM consulting business, rather than in a competing software business to the set of players now arrayed in the BPM market.

More to come…

The news hit the wire this morning (early for me, as I’m sitting in San Francisco this morning).  I got a phone call at about 5:20am PST to give me the news (thanks, I think?!).

The Lombardi press release touts a shared belief in customer success, a good product and culture fit, as well as good ole market opportunity:

“Any discussion on business improvement inevitably leads to improving the processes that are at the heart of every company,” said Craig Hayman, general manager, IBM Application and Integration Middleware. “Recognizing this, IBM has strengthened its presence and investments in business process and integration software to meet these growing client demands. Lombardi fills out our company’s portfolio in this key area.”

Lombardi already supports Websphere, and  was an early adopter of the app server in the BPM space (I can testify, I was there with Lombardi’s first Websphere clients).  In Austin, we’ve certainly seen a history of IBM successfully acquiring and expanding software companies that were acquired (Tivoli and Webify come to mind).

I’m sure there will be more news as the day(s) go on, I’ll try to just keep this post updated with the latest, unless something comes up that deserves an entire post on the subject.

Congratulations to the Lombardi team, who have been breaking ground in the BPM space for years now, and yet staying focused on making customers successful, not just on the latest bell or whistle on the product road map.  I think there’s a good chance, depending on the structure of the takeover, that some of Lombardi’s DNA will rub off on the BPM-focused parts of IBM.  I can see the effect Webify has had on IBM’s efforts, and I always thought Lombardi’s and Webify’s products would make for an interesting combination. Now we’ll get to find out, I guess!

More to come…

IBM press release here.

UPDATE: 12/16/2009 7:20am PST
Keep up to date with what the analysts (and others) are saying on Twitter:

And then we have a post from Phil Gilbert on “The Second Decade of BPM“. Phil’s take on where BPM is headed, with an interesting look back:

I can’t begin to convey the impact this will have on how and where BPM will be practiced, going forward. In the blurb above on this blog site (which was posted when I started this blog in 2005), I said that by 2010 process will be the primary prism through which large companies view themselves; and that by 2020 the management of process will be “second nature.” The first of those milestones has come to pass: process is not simply the way business operates itself, but manages itself.

Phil has a pretty good sense of the big picture.

Second, because Lombardi has focused on the business user, we have also focused on how to engage and support the business user. The work we’ve done on culture, change management, governance and BPM methodology is the best in the industry. Lombardi University and its role-based curriculum, along with tiered certifications and advanced mentoring, means that Lombardi can help IBM scale their business customers more quickly into the world of BPM. Lombardi’s On-Demand Assistance program is also built from the ground up to allow fledgling BPM teams built on business-first principles to still have a technical safety net under them.

This quote illustrates for me what I hope Lombardi can bring to IBM. A better understanding of how to support the business and help them achieve success via BPM, and a better sense of what BPM really could mean for the business world.

UPDATE 12/16/2009 8:45am PST
Austin Startup is carrying the standard press release.

And ebizQ has already launched a forum topic on the subject.

UPDATE 11:35am PST: More great coverage and viewpoints:
Dennis Byron discusses the acquisition, and is focused primarily on eliminating one more option from potential customers, and the inexorable force of consolidation.

Redmonk gives props to the Austin software and enterprise scene, as well as to the deal-making by IBM. The big question is how well IBM can incorporate Lombardi without losing its DNA.

Miko Matsumura posits that this might have been a firesale based on the language of the press release. Could be, Miko has more experience with this than I do. Regardless, I think the timing was good for IBM because I expect 2010 to be a big year for BPM software.

Sandy Kemsley chimes in with the best run-down of the analyst call.

Update EOD 12/16/2009:
David Moser of Australia weighs in. He points out which communities might win or lose, based on this deal going through, in particular which customers. But he also points out:

And with what should be a significant boost to their market, some of the biggest winners could be Lombardi service providers. Watch out for skills shortages.

I happen to agree, that service providers (e.g. BP3) could be well positioned to benefit because, no doubt IBM can sell more of the same product with its much larger sales channel. It takes time for people to ramp up on a BPM product. For a time I expect there will be exacerbated shortages of Lombardi BPM skills, but of course we’ll try to help as best we can!

Bruce Silver also comments on the deal. The tone of Bruce’s post (and some others) is a bit somber – I think some of the folks out there were rooting for a Lombardi IPO or for a deal that made it more clear that Lombardi would still be providing leadership in the BPM space from a “vision” perspective. There is an emerging consensus among outsiders that “departmental” is a losing strategy. I think if it is a pricing/marketing strategy it has legs – potentially target lots of smaller installations to service departments, but if it is reflected in technical direction of the product it could be a real problem. There’s no reason the tech can’t scale much bigger than a department, but its still up to IBM-Lombardi to decide what the market positioning and pricing breakpoints are.

Tony Baer’s take on the acquisition titled “Early thoughts on IBM buying Lombardi“. His emphasis on Lombardi’s chief advantage to IBM is its simplicity – making it possible to address the business directly within the enterprise. He’s looking for the integration of Blueprint and Blueworks to be a good indicator of how this purchase is going to work out.

UPDATE 12/17/2009: Well the blogs keep rolling in with new thoughts or analysis.

Jaisundar’s take is that blueprint is a key piece of the puzzle by widening the user base for BPM and creating a demand funnel. So much comes down to how IBM handles it and whether they keep the Lombardi DNA, while adding to it their massive sales channel synergies.

Meanwhile, Richard Watson has a couple of witty posts on the subject of showers (listing the # of bpm products and related products IBM has purchased as an embarrassment of riches and portfolio overlaps – but also, market clout. In a previous post, he makes the best statement about this subject: “If IBM wants to become the leader in BPM, they need to get out of the data center and start thinking like business people.” – This is exactly why people are excited about the merger, and why they’re worried. Lombardi is not stuck in the data center mindset. Will that business-focus be lost in the merger? That’s the real fear.

And Derek Miers, well-respected for his thoughtfulness on business process and business improvement, took a look at this merger and concludes:

While the choice of dance partner was a little surprising, the desire for a liquidity event in the Lombardi management team was there to see long ago. They touted an IPO around this time, but in the current market that was always going to be difficult.

IBM brings the broad base and ability to grow. Lombardi brings market cachet / credibility that is hard to quantify – but everyone in BPM knows Lombardi and they’re well-respected. Derek’s take on Lombardi’s success:

As I have said to many other vendors, when people buy BPM products, they buy the promise of success. And I am sure Lombardi’s success in the market is as much down to that aspect as it is their leading technology stack. They help their customers understand how they will succeed in meeting their business objectives (rather than touting the beauty of their technology stack).

That’s exactly the point – the culture that Lance and I (and execs at Lombardi) tried to create in the services organization was around business objectives and customer success. Something we’ve endeavored to continue at bp3.

Update EOD 12/17/2009:
Clay Richardson of Forrester Research writes up his analysis, which includes:

Ultimately, this deal centers on the need for IBM to develop a more compelling story for the business. In many ways it is further validation of the IT-to-BT transition that we are seeing within the enterprise.

IBM already had their story down for the CIO and needed to develop a more compelling story for the VP of Operations, and the VP of Customer Service, and the VP of Procurement – in other words IBM needed to establish a stronger voice into the business. And this is what Lombardi does best as a leader in the human-centric BPM space.

If he’s right, this is good news for Lombardi and its customer-base (and prospective customers). He follows up his points with Phil Gilbert’s plan to push the envelope with Blueprint even further “to collaborate on scoping and discovery for enterprise process initiatives.” As he says, IBM is weak in that area, and there’s little overlap. His basic take is that this is a capability buy as much as a technical buy. If he’s right, it bodes well for the future of BPM, or at least the future of IBM BPM!

Update EOD 12/18/2009: You thought we were done with the updates? you were wrong!

Dr. Diaz, on the IBM BPM Blueworks Blog, gives another IBM angle on the acquisition – conveying a sense of confidence and positivity in the IBM strategy.

John Reynolds, of Lombardi and soon IBM, writes a pretty good defense of the “Department” positioning – after all, what is “bottom-up” BPM if it isn’t a department level solution that scales up to meet your enterprise strategy, vs. the top-down BPM approaches that IBM has been using so far:

It’s not really a technology issue – Lombardi’s solution scales quite nicely. It’s a methodology issue… Some tools really enhance the “Top Down” (Enterprise) approach, while others really enhance the “Bottom Up” (Departmental) approach. Offering both seems like a pretty good idea when you think about it.

Update 12/21/2009:
Jennifer Dubow (@jennifer_dubow) posts a link to an IBM F.A.Q. on the Lombardi acquisition. Hits all the high points with no muss, no fuss.

Update 12/22/2009
Neil Ward-Dutton of MWD Advisors recaps the responses of vendors, which generally provide for fun reads. Of course, if you read their blogs without, somehow, realizing their corporate affiliation you might fall for their bias without correcting for it. Its only natural for competitors to see this as an opportunity to try to steal a march while IBM / Lombardi are distracted by integrating two companies – but having been on the other side of this – it didn’t often work as well as we would hope – often the buyer was able to keep the momentum going in the 12-18 month timeframe.

Update 12/29/2009 Jim Sinur weighs in with Power Vendors vs. Pure Plays, positing that the Power Vendors are catching up. I don’t see the catch-up that Jim is mentioning, but I do see catch-up-by-aggregration and the question is whether any of the remaining pure-plays have enough heft to out-innovate the big guys. Obviously small vendors with a tight focus can continue to outpace bigger players in their niche, but the wide Pure Play field has been thinned with this acquisition…

Update 12/30/2009In the ProcessMaker Blog, Brian makes one of the most compelling statements about why IBM bought Lombardi (and although he didn’t address why IBM bought other Business* companies – e.g. iLog, FileNet, Cognos, Webify, etc. – the same logic applies quite well). The short version: it is about addressing markets, not technology. And if Lombardi addresses a particular market, and is scaling, then IBM can plug that into their vast sales and partner channel and really wring value out of it. The thesis rests on the assumption that the BPM market is hot – but that’s a safe one.

Update 01/06/2010 The debate spills over into 2010. Neil Ward-Dutton reprises his previous review with a more considered analysis and the summary is that perhaps IBM really is buying Lombardi to get a better “business-facing” solution – but that they just don’t want to admit that blatantly in their external positioning. Its an interesting read.

Update 01/08/2010Gartner’s Janelle Hill and Jim Sinur report on the acquisition for Gartner. Basically they advise getting ready for a move to Websphere if you aren’t on it already, in a timeframe of two years, and tout the BPM DNA acquired in the Lombardi acquisition.

I read this post when it first went across my reader, and I went back and read it again today.  Derek Miers once again proves his nuanced mastery of BPM, and I just have to recall attention to the posting.  Because what Derek does is point out that you find the BPM culture within your company’s culture, you don’t create it from whole cloth.  I can’t say it better than Derek did:

[....] I help them find a Well that shareholders, suppliers, customers, partners, the market and the community can all draw upon to enrich and energize their business and satisfy their needs.What do these Wells look like? They are the values that are at the heart of that business area. Collectively, these values give direction, guidance and are rich source of ideas and new ways of doing things. So, we do not need to boil the ocean, just discover what drives and inspires the business and its people to adopt new ways of doing things and developing new behaviors.

In this approach, internal drivers that everyone values (because they see the relevance to their own business and business success) replace externally imposed behaviors (as the means of creating culture). Values come from an eternal spring – energizing again and again – hence sustainability is not an issue.

I could have just quoted the most important line, but I think the context is important.  Here it is, again: “So, we do not need to boil the ocean, just discover what drives and inspires the business and its people to adopt new ways of doing things and developing new behaviors.” What interests me about this statement is that it is also true for how you create change in your personal life.  You find the deep values inside you that support the changes you need to make, and because those changed behaviors are based on core values that you are reinforcing, it becomes easier to support the change.  This concept is even more powerful in an organization because social and peer effects can reinforce the individual behavior changes.

Lately there’s been a bit of a buzz about CRM.  Not sure what caused it, but here are three thoughtful articles on the subject:

1. Derek Miers’ post on Case Management revival
2. Bruce Silver’s commentary regarding a new OMG spec RFP for Case Management.
3. Paul Vincent’s blog for Tibco, where he mentions PRR and DMN… and Case Management yet again…

I’m still waiting to see a really good case being made that Case Management requires or lends itself to different technical solutions than, say, BPM.  Having said that, I’m also sensitive to the fact that as BPM was picking up steam, many in the SOA stack community wondered why BPM wasn’t just a “feature” of SOA.  The fact that I don’t yet have the information to prove to myself that Case Management has technical requirements not addressed by BPM, does not mean that such information won’t be forthcoming.

Update: Bruce Silver has another update – apparently there was a bit of controversy about the case management proposal at OMG recently, and a little bit of blogosphere dust-up resulted.

Derek posted recently about the Elephant in the Room, by which he means the big issues that are slowing down BPM adoption, and that are not, quite frankly, technology issues.  I’d like to quote one passage from his post:

Organizations are struggling to drive wider adoption of process management? The average number of Processes under Management in a typical BPM site is probably 5 or less; I think we would all agree that more than 10 is unusual. While there may be some cases of organization with over 20 or even 50, the reality is that there is little widespread adoption inside your average large organization (although some are starting to grapple with that problem). Why is that? Because the effort required to standardize the processes and deal with all the data and artifacts is just too great. Yet at the same time, the number of spreadsheets used to coordinate work in those same organizations is numbered in the thousands (or at least hundreds).

Now this is an interesting point.  As he goes on to say, each spreadsheet represents an opportunity to improve the organization and its processes and performance (and financial results)!   However, I’d call attention to his assertion that the reason the adoption isn’t greater is because the effort required to standardize process and deal with all the data and artifacts is just too great.  I believe that the *key* element is that the organizational will-power required is too great.  In other words, to get from 5 processes to 100, the issue isn’t absolute effort – those first 100 processes will aboslutely produce return on the implementation costs and effort – the issue is organizational will-power:  the energy and focus to organize and push and prod people to follow these standardized processes so that the company can reap the benefits of process improvement.

The effort required to implement is also an issue, but I think it is more of an issue in terms of displacing the thousands of spreadsheets that tackle “process” issues beyond the first 100 or so.  In other words, if we can make it easier to organize the process, data, and artifacts, then more of these spreadsheets will look like attractive process targets!

Derek makes some other good arguments that we have anecdotal evidence to support, around case handling, and value-chain optimization vs. inside-the-corporation optimizing.  He also gives some advice like “Deal with the Politics First” that I think is easier for an outsider to do – because it is, in a sense, an efficiency argument – if you deal with that first, and the politics can’t be aligned with BPM success, then you can move on to projects/accounts where the politics can be aligned or are aligned.  If you wait on it, you may implement the first of many projects and then get stymied by politics and lose all of the momentum and skill-transfer progress.

His last point is that there just aren’t enough good people with the right skills and knowledge and experience to deliver BPM projects and successes.  Our experience matches his.  It will take time to get the right skills into the market, and in the meantime, companies will have to lean on consultants to get the job done, but they also need to invest in their own teams – and establish partnerships that will leverage the outside expertise they are paying for to ramp up the internal teams.

I was out earlier this week in San Diego for Gartner’s BPM Summit. Dr. John Alden and I did a workshop on Process Measurement which was a three hour session spanning measurement strategy, the culture of measurement, as well as various frameworks and tactics using BPMS to help create a solid measurement capability in the shortest time frame possible. We did this at the previous summit in D.C. last fall. Gartner seems to really like the content so we will be happy to come back as long as they will have us! This time, what we did do different was to focus much more on processes that are truly customer facing  and talked quite a bit about what those measures look like; such as Net Promoter Score (NPS). The feedback was very positive with the standard outliers. However, the other thing we did was take out a walk through of a particular technique to build KPIs from raw Voice of Customer data. In hindsight, we probably should have kept that piece in as it provided more of a “how-to” and there were several comments about wanting to see something of that nature. We will just take that feedback and refine it for next time.

The overall conference was the standard format, although I have to say the content did seem to step up a notch over the previous summit. I got in on day two thanks to a flat tire and missed Erik Keller’s case study; Erik is the CIO of Sirva and someone BP3 has worked with for some time. His talk track was about leveraging BPM to deliver mission critical applications from a CIO’s perspective. Erik is not only a fantastic CIO by all accounts but also a very personable guy and the feedback I heard about the session said as much. The other session I missed that I was really wanting to catch was Professor Jeremy Siegel’s talk on “What’s Ahead for the Economy and Markets Now?”. Professor Siegel is a very well known expert in Macroeconomics and an instructor at Wharton. The short story I heard on this was while it might have been viewed as overly optimistic to some, everyone seemed to agree that we are moving toward real stabilization sooner versus later. Whew! Glad to hear it!

One of the coolest sessions I did hit was draped in a negative connotation known as “Unconscious Incompetence and Change: Worst Practices, How to Recognize Them and How to Avoid Them”. Matthew Hotle, a Gartner VP gave this session and it it was both informative and entertaining. The theme of it was really about how workers sometimes just do bad things in such route fashion that to effect change means breaking some seriously embedded habits, which in turn causes resistance even though its the right thing to do.

I think Gartner was shooting for about 700 attendees, my guess is it came in somewhere around 300 or so (update: 500 according to Gartner). I was thinking it was going to be even less but I was surprised that many turned out with travel restrictions being what they are. Again, I think one of the best things was that the content really did come up a notch in my view and I hope that is our new baseline for these BPM Summits!

I also caught up with friend and colleague Derek Miers who always has an opinion on these things but who is also in the process of writing yet another book so he hasn’t been blogging much lately (you can catch him here at bpmfocus).  I was looking for Sandy and others but it ended up being a much faster trip than I had hoped.