Is a Good Economy Bad for BPM?
- May 1, 2010
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I had an interesting conversation with Ian Gotts of Nimbus Partners this week that raised a thorny question. In a downbeat economy the focus is to drive out costs and improve processes a lot more aggressively, probably more so than in ‘normal’ conditions where continuous improvement already takes place, so the attention is immediately turned to what BPM can achieve for the enterprise and can potentially account for such strong results being posted by vendors.
While it is certainly a valid concern for anyone in the BPM business to have, it is too early to tell what this turn of the wheel holds.
An example. In 1994 a little company that sold configuration software to the makers of complex equipments (PBXs, servers, super computers, mainframes, etc) was growing like crazy in the midst of a tech downturn in the US. Why? Because those tech companies were looking to tighten the belt on costs, and accurate configuration at sales time could help them ensure they built what they sold, reduced errors by 10x, etc.
Fast forward to 2001. Another tech downturn. But in this tech downturn, the strategy du jour was not to cut costs by being more accurate- it was to simplify the product line dramatically and reduce cost by increasing the volume of commodity parts and sell those at lower prices. Configuration was out, commoditization was in.
What will happen to a space like BPM if the economy improves? Hard to say in advance – it will depend on how CEOs react to the new landscape- more hiring? more tech? more automation or capital spending?. But in general, I think we’ll all be better off if the economy does improve 🙂