Monday, May 28, 2012

What we don’t ask about BPM on Cloud - Pitfalls

Earlier this month we discussed the Implications of putting business processes on the Cloud - with this post we continue the thread with a discussion on potential pitfalls of BPMaaS.

With cloud adoption for BPM Software rising at a significant pace, it is clear that not just mid-market companies but Enterprises are looking to consume cloud based processes despite potential problems with delivering Business ProcessManagement as a Service (BPMaaS).

Here is a quick rundown of top 4 concerns of running business processes on cloud:

      The primary concern today is that the core strengths of Cloud based delivery models – elasticity and scalability may not meet expectations. However, as Gartner’s Michele Cantara points out, “That can be ok because most buyers don’t need all the attributes of Cloud. So it’s less expensive to buy a business process as a contract for 100 users than it might be to buy on-premise software, and while it’s not purely pay-for-use, it’s still a saving”. 

      Security: Another obvious issue is of course related to data security and IP rights. In a multi-tenant Cloud environment, it is important to be vigilant about information security. It is a simple fact that no security system is infallible (think Google and Sales Data security laws also vary with geographies and jurisdiction becomes an important issue in this case. One needs to be aware of where exactly the BPM application or process related data will be hosted. Also, when it comes to process governance on the Cloud, the vendor needs to have a robust exception monitoring system in place.

      SLAs: Any vendor offering solutions delivered on Cloud is evaluated through hard bound SLAs and vendors delivering BPM applications on the Cloud are no different. However, apart from the usual parameters such as Uptime and Security which are the cornerstone of a successful delivery, SLAs need to be stringently evaluated for actual process performance. Does the process achieve the business aim it was meant to? Accessibility and Mobility are not concerns limited to on premise solutions and need to be evaluated for processes that rest on Cloud.

   Pricing: Although there are several hybrid pricing models available, typically, Cantara says, Cloud service providers price their services based on a range of users; the customer pays for services whether or not they’re being used. That is subscription-based, per-user pricing. The Process CafĂ© blog summarizes this well Costing models for BPM in the cloud will need to be carefully scrutinised to ensure that they will not inhibit the future development of the processes themselves. As such the owners will need to understand how the costing is done and what will be the impact of making a change. This will then need to be made transparent and matched against the cost of implementing such a system as an in-house cloud system rather than a purchased SaaS operation. 

      A BPM Pilot that is tested on a critical process and modeled for the long term is definitely an evaluation best practice. Our next post will discuss which processes could be on Cloud vs On-premise.

Wednesday, May 9, 2012

Business Processes on the Cloud – Implications

As per A Strategy Guide for Business and Technology Leaders — and the Rest of Us by Andy Mulholland, Jon Pyke and Peter Fingar, Business Process Management as a Service (BPMaaS) creates unique business processes designed for specific purposes to link together multi-company value delivery systems that in the past weren’t feasible or economical to join together. BPMaaS is all about the complete management of business processes, and puts business people in charge of their processes. In many ways, BPMaaS is what sets enterprise cloud computing apart from consumer cloud computing. Unique business processes are how companies differentiate themselves, and are thus paramount to the enterprise use of cloud computing for competitive advantage. BPMaaS covers the full lifecycle of business processes, from their conception, design implementation and optimization. Bringing BPM capabilities to the Cloud enables multiple companies to share a common BPM system and fully participate in an overall end-to-end business process. 

So what does it mean to put your processes on the Cloud? On the one hand, there are the obvious benefits of collaboration across dispersed geographic locations and a more cohesive value chain enabled by collaboration beyond the firewall. Business Process Management as a Service (BPMaaS) is also an excellent way to test project pilots and then have them delivered on demand putting the controls directly in the hands of business owners for decisions on size of investments, scalability etc.

On revenues, BPMaaS radically reduces risk and startup expenses for innovation initiatives letting companies take more small bets and test out more new ideas. With no upfront capital expense, new projects can be scaled up instantly if they take off, or shut down quickly if they fail. This sort of elasticity promotes agility and provides a launch pad for truly innovative ideas.

Beyond the firewall, putting processes on the Cloud also allows organizations to collaborate in new ways with its trading partners, and collaboration is the key to gaining competitive advantage across the value chain. By establishing shared workspaces in “Community Clouds” employees from multiple companies can work together as a “virtual enterprise network” and function as though they were a single company. They all participate in the same value delivery system, sharing computing, communication and information resources. This is especially important as no one company “owns” the overall value chain.

For someone who consumes Cloud based services and business process management software, it is key to remember that Cloud delivery is still in its infancy and accounts for less than 10% of all software product and services delivery models. As per a Gartner report, recognize that BPM PaaS vendors' view of elasticity generally means that they will enable more services and more capacity for you, but in many cases, this enablement is not automatic and not really elastic.

Plan your budget with the understanding that, even when "elasticity" is automated, it is usually only automated to increase, rather than decrease. As a result, your payments may stay the same, even though your consumption decreases.

Examine the multi-tenancy claims of a BPM PaaS or cloud-enabled BPM platform vendor against Gartner's CEAP multi-tenancy reference model. The aforementioned limitations in elasticity suggest that vendor claims of more-advanced "shared everything" multi-tenancy maybe exaggerated.

In our next post we will further examine potential pitfalls of BPMaaS and Processes that could be on the cloud vs. on premise processes.