Percentage breakdown of organizations using cloud services for more than 10% of their. business. processes within a BPM project

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1 Abstract The current proliferation of cloud based service offerings and numerous delivery models that have evolved in a relatively short span of time are re-shaping the IT landscape. What this means for Business Process Management is that more and more vendors want to move their BPM software to the cloud as well. But what does cloud as a disruptive technology really mean for BPM in an enterprise? The following Whitepaper examines the value of BPM on the cloud from the Enterprise perspective and emerging trends in the short term. 1

2 Table of Contents Introduction 3 BPM on cloud Emerging Trends 4 - Imperatives 5 - Cloud Compliant BPM Stack 5 Benefits 6 Enterprise Challenges with cloud based BPM 7 Success Factors for BPM in the cloud 8 Conclusion Invensys Systems, Inc. All rights reserved. No part of the material protected by this copyright may be reproduced or utilized in any form or by any means, electronic or mechanical, including photocopying, recording, broadcasting, or by any information storage and retrieval system, without permission in writing from Invensys Systems, Inc. Invensys, the Invensys logo, ArchestrA, Avantis, Eurotherm, Foxboro, IMServ, InFusion, SimSci-Esscor, Skelta, Triconex, and Wonderware are trademarks of Invensys plc, its subsidiaries or affiliates. All other brands and product names may be the trademarks or service marks of their representative owners. 2

3 Introduction Cloud based technology can only be qualified as an emerging trend till cloud computing evolves into a standardized business model with a proven performance track record. With so much investment riding on the cloud, most major stakeholders are quick to adopt applications and services on demand essentially the provisioning of dynamically scalable and virtualized resources over the internet as a service. The state of the BPM on cloud market today: 3% 1% - 10% of business processes 21% More than 10% business processes 40% Percentage breakdown of organizations using cloud services for more than 10% of their business processes within a BPM project 12% None 39% 24% All of our 75% - % of our 50% - 75% of our 25% - 50% of our 10% - 25% of our Source: Gartner BPM End-User Adoption Survey, N = 593 (January 2011) Forrester has predicted that cloud computing market will increase from $40.7 billion in 2011 to more than $241 billion by 2020, with a year-to-year growth of over 20 percent. The steady and continuous migration of BPM technology to the cloud brings into relief the lack of clear definition on what exactly cloud is or isn t. This paper attempts to cut through the hype surrounding cloud based BPM and focuses on what the shift means to the Enterprise as a whole. 3

4 BPM in the cloud Emerging Trends What exactly is cloud Computing? Contrary to popular perception, Cloud based computing doesn t bring any new technology or IT methodology to the table. Peter Fingar associates cloud with a disruptive set of new software delivery models ones that work on economies of scale. Cloud is synonymous with on-demand delivery of what is commonly known as the SPI stack SaaS (software as a service), PaaS ( platform as a service) and IaaS ( IT infrastructure as a service). This stack is constantly evolving with added selection of delivery models and is now increasingly referred to as XaaS (everything as a service). As it is with on premise, without BPM, Cloud cannot deliver solutions for a Service Oriented Enterprise. BPM technology is still the enabler for Rapid Application development and business agility both on-premise and on cloud. Consider the following delivery model as outlined by the National Institute of Standards and Technology (NIST), an agency of the United States Department of Commerce for Enterprise Cloud Computing. So above and beyond the SPI stack for consumer cloud computing, BPMaaS (Business Process Management as a Service) comes into play when we talk about Enterprise Cloud computing. 5.MANAGEMENT CONTROLS as a SERVICE Security, SLA mgt., Distributed Policy Mgt., Role-Based Authorization, and other foundation services needed by all layers MCaaS 4.BUSINESS PROCESS MANAGEMENT as a SERVICE Choreography and Orchestration of services to create and manage unique Business processes BPMaaS 3.SOFTWARE as a SERVICE Software applications used by individuals and organizations SaaS 2.PLATFORM as a SERVICE Development environment used to duild and deploy Cloud services PaaS 1.INFRASTRUCTURE as a SERVICE Network, Computing and Storage Resources IaaS Expanded Delivery Model 4

5 Cloud compliant BPMS Bundled SPI stack SaaS, PaaS and IaaS Cloud Deployment BPMS for Cloud Cloud Provisioning Multi-tenant utility based Pricing Multi device support Multi browser support BPM Functions Integration and services orchestration Imperatives: For cloud compliancy it is a must for any BPMS to have the following: 1. PaaS: Platform as a service capabilities such as multi-tenancy support. 2. SaaS: Packaged applications, on-demand provisioning and pricing by use. 3. IaaS: Cloud infrastructure and management (Operating system, Failover, Virtualization, backup and Disaster recovery) What is in a Cloud enabled Product Stack? SaaS: A suite of business applications that can be deployed out of the box, or used as templates for supporting the development of custom ones. All applications can be used independently from each other while leveraging a common set of components and features. SaaS pertains to a software delivery model in which software and its associated data are hosted centrally and are accessed by users using a thin client on browser. PaaS: Application development platform, process designer, mashup studio / middleware on demand IaaS: Database, Cloud Appliance / Base layer of the cloud stack. Serves as a foundation for the SaaS and PaaS layers for their execution. IaaS provider supplies the whole cloud infrastructure servers, routers, hardware based load balancing, firewalls, storage and other network equipment. The customer buys this service on an as needed basis. BPMaaS creates unique 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, and puts business user in charge of their processes. BPMaaS is what differentiates enterprise cloud computing and consumer cloud computing and includes in its purview the envisioning, modeling, managing and optimization of any business process. 5

6 Benefits BPM on the cloud adds tangible value to Enterprises in any Industry vertical by offering an elastic, rapidly scalable process management solution based on rich collaboration with subject matter experts and process participants across dispersed geographic locations. 1. Collaboration: On the face of it, Enterprise BPM on the cloud is primarily to do with visualizing across geo market segments for agility and to be available to run anytime, anywhere and from any browser. BPM on the cloud lowers the barrier to adoption across the value chain of the Enterprise and facilitates collaboration across supply chains. The idea of a Virtual Enterprise Network becomes plausible through shared workspaces on the cloud. 2. Scalability: Business Process Management as a Service (BPMaaS) is also an excellent way to test pilot projects 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. 3. Mitigates risk from silos: Breaks away from information silos that hinder deeper inter departmental collaboration across the Enterprise. BPM on the cloud enables process governance for standardized company-wide processes and allows knowledge assets to break free of departmental silos to fully leverage their potential. Enterprise value chain Process Governance BPMaaS Knowledge & Assets Management Dispersed knowledge workers Department Department 4. Cost Benefits: BPMaaS radically reduces risk and startup expenses for innovation initiatives letting companies take more small bets and test out more new ideas. From an Enterprise perspective, technology on the cloud means a whole new landscape in terms of a business model and the ability to Orchestrate cloud services to increase or decrease IT resources based on specific requirements. This translates to significant cost savings to SMBs who can circumvent big initial investments, orchestrate processes on the cloud, train on these processes and then pay as they go. 5. Elasticity: Agility and elastic scalability or rapid scale up/ pare down is a key attraction for businesses which are looking to cut back on IT costs and distribute investments to their core business activities. Enterprises can automate one or two processes and demonstrate value before scaling up rapidly across the business latitude. 6. Focus on core business: By reducing infrastructure and resources related to deploying BPM software and tools on premise, Enterprises can concentrate on driving operational efficiency for their main business. Issues associated with traditional BPM can be circumvented and assets that hitherto rested in departmental or data silos be leveraged for improved collaboration models. 6

7 Enterprise Challenges with Cloud based BPM What do Enterprises need to be concerned about when it comes to BPM on the cloud? While cloud has disrupted the way in which work is done, it is still a nascent delivery model and accounts for less that 10% of all software product and services delivery models. 1. Elasticity and Scalability Trap: 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. Solution: 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. Enterprises need to plan budgets with the understanding that, even when elasticity is automated, it is usually only automated to increase, rather than decrease. As a result, decreased consumption may not lead to lower payments. 2. Security Trap: 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. Data security laws also vary with geographies and jurisdiction becomes an important issue in this case. Solution: Before moving critical process data to the cloud, Enterprises should raise questions on exception monitoring systems, location of Intellectual Property and, most importantly, whether the Vendor can incorporate the Organizations existing security policies. Given the lack of standardization, it would be a good practice for Enterprises to independently evaluate 3.SLAs Trap: 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. Solution: A necessary pre-requisite to drawing up an SLA is to examine whether the process achieves the business aim it was meant to and how it can be measured on the cloud. Accessibility and Mobility are not concerns limited to on premise solutions and need to be evaluated for processes that rest on cloud. 4.Pricing Trap: Typically cloud service providers base their pricing on a subscription based, per user pricing. Enterprises end up paying for services that may or may not be utilized for the duration of the contract. Further, process modeling may have cost components associated with installing applications which will add significantly to costs in the long run. Solution: SLAs should be evaluated for adherence to pay per use pricing to derive real cost benefits. Enterprise user based pricing x number of process instances provides a hybrid option that translates to sustainable value instead of a blanket user based contract. Cost impact associated with process re-engineering also needs to be looked into and then evaluated for business benefit. 7

8 5. Vendor Lock-in (Ref 1.1) Trap: Migrating processes to the cloud means migrating to security standards, protocols and BPM tools native to the Vendor. So any future migration or upgrade to another set of protocols could prove difficult, time consuming and expensive. Joe McKendrick on Forbes states that although SOA helped free us from the technology vendor lock-in model that we had a decade ago, the whole industry is really not that standardized at all. The cloud environments themselves are really in no way regulated, or there s no sense yet that there s a need to comply with industry standards. Cloud providers benefit from keeping things proprietary as long as possible, because it locks consumers into their environment. Solution: Vendor lock-in may be unavoidable at this point, but what companies need to do is understand up-front what the exit strategy will be, and build those costs into the initial cost analysis. In the long run, Enterprise end users can circumvent the Vendor lock-in issue by mandating standardization and interoperability but this is a slow, time consuming conversion. Success Factors for BPM on Cloud 1. Before migrating processes to the cloud, Enterprise users need to begin with documenting existing process models with cloud based modeling tools. This will minimize future Change Management efforts. 2. Demonstrate ROI from BPM on Cloud by implementing applications which require basic Workflows, Forms, Rules and Case Management which do not require heavy integration. 3. Establish process governance models keeping in mind collaboration across the length and breadth of the Enterprise value chain for geographically dispersed teams. 4. Integrate existing legacy applications and composite applications to align Enterprise IT investments with cloud based BPM. 5. Use BPM platform on cloud to build and host Enterprise wide packaged applications which can be used across the value chain. Process definition and modelling BPM pilot project on critical process workflows BAM and process analytics Integration with existing legacy applications & composite applications 8

9 Conclusion Cloud as a disruptive technology may be a nascent model but it offers clear cut advantages for the Enterprise in the BPM space. Global collaboration across the business latitude for process agility becomes a reality with cloud based BPM. On premise BPM challenges to do with locked in IT investments, restricted collaboration with customers, partners and suppliers, time taken to test and deploy processes, can all be circumvented with BPM served on the cloud. BPM on the cloud offers several opportunities for Enterprises to drive profitability and operational efficiency by leveraging the BPMaaS model, provided that Enterprise users provisioning the cloud are aware of possible pitfalls and how best to turn them into critical advantages. About Invensys Skelta BPM Invensys Skelta is the recognized industry leader in.net based BPM technology through its product Skelta BPM which offers 100% embeddable, Enterprise class, BPM solutions to help organizations achieve operational agility. Skelta BPM enables easy to deploy, web based process workflows across the business latitude and puts the control directly in the hands of the users. Skelta BPM, through its web based graphical user interface enables business users, analysts, managers and other stakeholders to collaborate with developers in: Process Definition and Design Process Execution Process Monitoring and Optimization Our BPM approach empowers organizations to achieve Operational resilience through process agility. We have consistently helped our customers achieve their BPM objectives and enhance operational efficiency through: Our strong product line Mature solutions framework (Accounts Payable, Leave Management, Document Management System and solutions for any business area) Evolved Professional Services for a seamless post sale experience Evaluate Skelta BPM Request Demo skelta.com/eval Corporate Address: Equity Drive, Houston, TX USA USA Tel: , India Tel: sales@skelta.com Copyright 2013 Invensys Inc. All rights reserved All other names and product names may be trademarks or registered trademarks of their respective companies or owners. 9