The BPM dilemma

Business Process Management is a term that is beaten to death far too many times in the recent past. Innumerable vendors, analysts, and experts exist in the market who will tell you all about how to use technology to manage your business processes. I myself have sold BPM solutions to major enterprises. It is a beautiful concept, and if implemented right you will get a lot of your process headaches solved.

There are plenty of challenges when it comes to making BPM implementation and sustenance in an enterprise a success. These challenges broadly fall into categories of people, process, and business priorities.

It is easy to understand the people challenges. Most human beings are change resistant. We hate anything that intends to change the way we do things. Most business processes require human interventions at many or all points. Many of us have seen that users resist new system implementations the most.

Many organizations constantly experiment with their internal processes. Processes change very often thus making any BPM implementation hard to cope with these changes. The real world is very dynamic and so the internal processes have to change in order to keep up with the markets. BPM implementations should be very agile to meet these types of requirements. Many times, rigid BPM systems pose roadblocks on business agility.

Business priorities change dramatically in any organization. The business world is moving towards collaboration and coexistence. Companies are trying to focus on their core competencies and outsource anything that fall in the fringe areas. From a BPM perspective, this trend seriously jeopardizes internal control and tracking. BPM is traditionally an internal issue and it can very well work for an organization if all the transactions are handled internally. The organization can easily map the internal processes and enforce SLAs and escalations at task levels. A major driver for BPM implementation that I have seen recently in many organizations is productivity monitoring. If many of the transaction tasks in a process are outsourced to external vendors, productivity monitoring and task level SLA tracking become irrelevant. Besides there could be far too many disconnects in the process flow which make it extremely difficult to manage and monitor the process.

For example, the loan approval process in a bank consists of many steps such as data entry, customer information verification, credit rating, verification of documents, loan approval, and loan disbursement. Out of these steps, the bank can technically outsource every step excepting loan approval and disbursement. Obviously these steps could be outsourced to different vendors who possess competencies in the respective function. In such an outsourced process scenario, how will the bank implement a BPM solution which can track each transaction step by step? Unless there are systems or platforms which can get the bank integrated with its extended arms, an internal BPM implementation will not yield the expected results.

In my opinion, BPM is a wonderful concept if an organization keeps its entire transaction processing in-house. It could work well if the organization exposes its BPM systems to an outsourced vendor so that the system can track the process flow effectively. With outsourcing becoming a global phenomenon and information and system security concerns swell the thinking process, exposing the systems to an outsourced vendor may be in a different country becomes extremely unviable. I think this trend could seriously impact adoption of BPM systems.

Selling ECM in India

I have been convinced for a while that the ECM market in India is huge. In the previous post, I tried to put my thoughts across on that topic. But as a practitioner and vendor of ECM, the struggle has been selling the expertise and solutions in this market. My experiments with selling ECM have been going on for the past three years. Innumerable mistakes were made, many lessons have been learned, plenty of ideas were generated, and a bit of success was tasted during this period.

Selling ECM or any enterprise system in India is not an easy task. There are certain facts about the software market in India that any vendor should internalize:
• Nobody wants to pay for software (They will, if left with no other choice)
• Hardware is everything
• Priority number one for any purchase decision is save-my-back
• Customer expects every feature under the sun in what you sell
• Vendors should only listen to the customer at least till the purchase order is issued (You should continue to listen till you get paid for your own sake. But, once the money is in the bank, customer will have to listen to you)
I am exaggerating a little here, I admit. But you will experience something close to these observations in 8 out of 10 software sales cycles.

Let us get more ECM specific now. The ECM market in India can be roughly divided into 3 as observed by a vendor. The segmentation is of course based on pricing:
• Segment 1: Up to 5 Lakhs (USD 12,500)
• Segment 2: Between 5 and 25 Lakhs (USD 12,500 to 62,500)
• Segment 3: 25 Lakhs and above (USD 62500 and above)

The vendors should very clearly position themselves in these brackets. No matter which segment you are playing in, the customer expects value for the money paid. Whether they get it or not is debatable.

Segment 1 is a complex market. You can sell initially if you know somebody closely at the target prospect, if you can impress just one of the top decision makers very well, or just by harassing the hell out of somebody at the prospect with your sales calls. Once you are done with some initial sales and have a couple of customers on board, your problem starts. Selling consistently in this segment is the most difficult task. You can’t justify direct sales efforts with the kind of pricing that works here. The product has to be very easy to setup and run. You should have specific vertical scenarios well mapped into the product. Scaling up will need setting up of a good channel network. The problem with channels that work on volumes and smaller margins per sale is that they many not have any expertise in managing the customers, their requirements, or problems. Until and unless you have a great product, good support infrastructure, and good documentation, bringing in revenues in this market is almost impossible. In India, I haven’t come across any vendor who has done a great job at cracking this problem. One of my failed attempts was to get into this market with a Microsoft SharePoint Services based ECM product. I have written about that story sometime last week.

Segment 2 is the crowded space. Almost every ECM vendor in the country had at least one go at this market. NewGen has been here for a while, and they captured a good percentage of the market by being here long enough. IBM DB2 Content Manager had its own share of success in this market. FileNet, Documentum, and Interwoven have tried to get into this segment as well. This market segment is sensitive to everything that you can imagine like price, features, integration capabilities, market presence etc. in that order. This market segment includes mid-sized organizations and departments within larger companies. What you sell in this segment will include the product(s) and implementation services. Once you can minimize the implementation efforts by pre-packaging as much possible in packaged solutions, you as a vendor will be able to survive in this market. Mostly the customers don’t care too much whether the solution is open source, Microsoft, Java, proprietary, or standards based. The main factor still will be the price. The problem with the market segment is that the sales cycles can go anywhere up to 8 months or a year until you either win the deal or just get thoroughly fed up.

Segment 3 is a new evolving market segment. Of late, some organizations have realized the importance of looking ECM as an enterprise wide initiative and not at departmental level. The success stories in this segment for the vendors come from global customers who end up rolling out the globally standardized corporate ECM solution in India as well, or certain forward looking companies adopting ECM for their India operations. The main drivers for the ECM solution selection are return on investment calculations, vendor alignments, corporate global standards, and of course save-my-back considerations. Many times technology or product features have nothing to do with a product or solution selection. This is precisely why the bigger players such as IBM, Oracle, EMC2, or HP are bound to control this market segment. I am not convinced that open source or solutions from smaller vendors can make a big impact on this segment. I predict a straight fight between IBM FileNet and EMC2 Documentum in this segment.

Segment 3 provides huge opportunities for service providers as well. As stated above, the product choice has something to do with reasons other than technology. But once the selection is made, technology and expertise come to the fore. There exists a good eco-system around products such as FileNet or Documentum that makes the customers less dependent on the vendors themselves. Every customer will look out for local implementation and support availability. I sincerely hope that people like me may not starve after all!!

 

ECM in India

India is home to a billion plus people with a GDP of about USD 1.5 trillion. Its GDP is the fourth largest in the world and is growing at close to 10% year to year in recent years. This is not hot information. Analysts to politicians, industrialists to farmers, and professors to housewives across the world talked about this again and again. Why am I bringing it up here? These numbers are significant when we look at the ECM market. The various surveys by Gartner, Meta, and Forrester estimate the ECM global market anywhere between 7 Billion to 9Billion USD in 2008. The rough break-up is 40% product sales and the rest services. The year to year growth is in the vicinity of 20%.

The Indian ECM market is estimated at USD 45 million in 2008. This will be about 25 million in product sales and the rest in services. Conservatively the year to year growth could be between 25 and 30%. India’s ECM market positioning in reference to the rest of the world doesn’t quite make sense, given the fact that its GDP fares very well against that of the world. The truth is that these numbers are closer to reality, and the good news is that the numbers will have to balance soon.

The requirements for ECM solutions can be directly proportional to the economic situation of the market. We have seen in matured markets that the major players contributing to the economic growth have always adopted ECM/BPM as a driver for productivity improvements, service enhancements, and increased revenue generation. Over the recent years a similar trend has started in India as well.

The bad news is that India has to catch up with the developed economies in terms of ECM solution adoption. What the western world has been doing for more than 20 years now has to be implemented in as much as a quarter of that time period. That itself is the good news as well. The country can always try to do things the smarter way. This is very similar to the telecommunication scenario we experienced recently. Between the late nineties to today, the country witnessed unprecedented telecom boom, and it has more than caught up with the rest of the world in telecom infrastructure. In fact, the country today is at a much more advanced stage in terms of its telecom infrastructure in comparison with certain developed countries. A similar trend cannot be ruled out for ECM as well in the next 5-8 years.

I believe that there exist huge opportunities for ECM product and service vendors in the country right now. The banks, insurance companies, manufacturing sector, government, public sector enterprises, and infrastructure players even today grapple with the monster problem of handling unstructured information. Very few organizations possess ECM solutions as of now. For these sectors mentioned above, ECM could add value in document management, process management, and compliance management, in that order.

The entry point for the market is plain document management. Where a vendor can start focusing is in providing imaging and image management solutions to contain the paper monster. Once these organizations are used to seeing and feeling paper in electronic image formats, workflows and records management could be added to the mix to leverage full ECM capabilities. I would say for the next 2-3 years, ECM vendors should focus on selling plain scan-store-retrieve solutions to the Indian market. It is easy for the customer to understand and vendor to sell.

Is it an easy proposition? Not necessarily. ECM product vendors may not like their products to be tagged as a scan-store system. They may always want to impress the customers with catchwords like SOA, BPM, Compliance Framework etc. Besides, scanning is easily said than done. Implementing a business scanning solution suitable for Indian enterprises could be the most challenging task in this entire mix. I am sure there could be a couple of smart vendors who are working on these kinds of solutions for the Indian market out there.

A SharePoint Affair

It was love at first sight! Way back in 2004, when I first came across SharePoint, the techie inside me loved it. It had almost all the features to make you drool. It definitely was the best thing ever after iodized salt.

To me, SharePoint is WSS (Windows SharePoint Services) since I was looking everything from a content/document management angle. The portal is good and extremely useful, but I couldn’t understand why Microsoft would give away 80% of the features free (WSS) and charge only for the portal application (SPS). I didn’t scratch my head too much on the business acumen of Steve Ballmer and Co., and decided to see if I could commercialize document management on WSS.

I was absolutely convinced that WSS and SPS are great tools for the knowledge industry. The thrust of the SharePoint platform was on collaboration, and it often meets the expectations of such a requirement. But it required sheer determination and creative thinking to give a facelift to such a product to suit the requirements of a transactional business. 

The business motivations of such an adventure were simple. The idea was to get small and medium businesses on to a very cost effective document management system. WSS was a free download on to a Windows 2003 server and the only investment for the customer would be the server. If the volumes were nominal, MSDE would do the database job. It would definitely be the killer app.

What additions will make WSS a document management system? The ability to bind documents together in a folder, access control at the folder and document level, ability to attach metadata at folder and document levels, a TIFF viewer, and an imaging front-end would do the job, according to the thought process at that time. The initial technical discussions were about what WSS offered and what were to be built on top of it to achieve the features mentioned above. The freebies were sites, lists, integrated authentication, version control, document libraries, metadata definition, access control at document library level etc. The folder concept in WSS 2.0 was a joke and had to be custom built again, and access control was available only at the document library or list level and not at the individual row and column level.

Peeling the technical layers of the SharePoint onion was a revelation and the enthusiasm started treading in the opposite direction as and when more and more of the technology was excavated. The biggest disappointment was the performance of the system. We had to rely heavily on CAML based queries and it didn’t quite meet the expectations of performance. After a while it seemed quite unviable to go ahead with the adventure and we decided to pull the plug.

Still I kept a close watch on the SharePoint developments. WSS 3.0 has many welcome additions, but it seems to me that it remains a tough soil to grow a transactional document management system. But at the same time WSS and MOSS have endeared themselves to the technology enthusiasts, analysts and the collaboration clientele mainly from the knowledge industry.