BPM and SOA: Making the Connection for Corporate Success
by Amy Larsen DeCarlo

The online-all-the-time marketplace carries with it nearly as many burdens as benefits for businesses. Sure, the Web opens up entirely new, faster avenues to reach customers, often in distant geographies or previously untapped markets. But the Internet presents these exact same opportunities to enterprising rivals. Investor and client expectations for better, cheaper, and faster time-to-market and time-to-revenues are ratcheted up to new heights and the battle for every dollar is fierce. Success is hardly guaranteed.

What distinguishes companies that thrive from those that merely survive is the ability to effectively maximize resources to get in-demand products into buyers’ hands faster than their rivals. Simply put, profitability comes down to innovation and efficiency. Dazzling the market requires more than just a sterling workforce, fastest networking gear or sophisticated business software; companies need the agility to adjust their processes quickly to meet continuously shifting customer dynamics and cost pressures. This is no easy task in today’s highly-distributed enterprises, which rely on a complex hodgepodge of manual and automated processes.

Companies are turning to business process management (BPM) to provide them with a practical way to adapt their operations to become more flexible, responsive, and, of course, efficient. BPM has matured from earlier iterations when it relied heavily on static flowcharts to map out corporate processes in mostly unchanging organizations; today, it has become a more complete discipline that applies sophisticated software and best practices to design, simulate, automate, manage, and fine-tune processes to coordinate operations with dynamic business priorities.

Forrester Research forecasts that BPM software revenues will hit $2.7 billion in 2009, more than double what they were just two years ago. Service-oriented architecture (SOA) has played a key role in BPM’s rise. SOA provides modular middleware and development tools that BPM suites can tap into to quickly build new processes and alter existing ones to react to changing business needs. By using SOA in conjunction with BPM, companies can make rapid changes in processes without having to code applications. This opens the door for business managers to adjust processes as their requirements change instead of having to wait for hours, days, or longer for developers to write new code.

BPM suites offered by IBM and other enterprise software vendors provide companies with the tools to optimize both their staff and technology resources. The software identifies operational inefficiencies and automates process changes using business rules specified by the end-user to help them improve the flow of routine business tasks. For example, a retailer that needs to accelerate distribution for a particular product can get order information to supply chain partners in near real time and get the merchandise to buyers faster by automating the process.

Organizations can apply BPM with SOA to tackle a host of other issues, such as resolving corporate compliance problems, linking separate processes to streamline overall business goals, and improving the quality of information delivered to customers and partners. A Gartner study from July 2005 reports that 67 percent of all BPM initiatives were fully implemented within six months and 78 percent of all BPM initiatives result in an internal rate of return of more than 15 percent. The beauty of BPM is that it enables rapid return on the investment.

Using a BPM solution that can accurately measure ROI, companies can validate project success and apply that experience to make other adjustments. Ultimately, what BPM and SOA offer is the ability to connect business services with the technology and people that support operations. Once that connection is made, companies can reduce much of the complexity associated with their operations to create a more cost-effective and competitive organization. The key to this success is to identify projects that can yield a quantifiable return from process improvements. Next month, we'll take a closer look at how to determine which processes changes can be refined to produce the fastest return to the company.

Amy Larsen DeCarlo is a consultant and writer specializing in the use of technology to optimize enterprise operations through effective process, technology and personnel management. Amy has held editorial staff positions at CMP Media's InternetWeek, InformationWeek, and tele.com magazines and worked as an analyst with Enterprise Management Associates and at Current Analysis, a competitive intelligence firm.

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