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.

1 comment:

  1. Awesome stuff, thank you and keep coming with these, will be back again.