Importance of Business Process Modeling in 2008

Gartner Research has a new interesting report on The 10 Most Important Technology Areas for 2008.

The most interesting Technology Area among these ten is Business Process Modeling. The Gartner Report says that the Business Process Modeling solutions also need to be friendly towards Service Oriented Architectures (SOA). The roots of the problem that the Gartner group is alluding to, go towards the history of IT solutions in the Global Corporate World.

IT solutions have followed a functional division of labor within corporations, traditionally. You had Finance, Marketing, Production, Warehousing and Logistics, Sales and other functions. This was the traditional way work was done within corporations. It is no surprise that you had Financial, Marketing, Sales Automation, Production, and Logostics software packages that were all bought by companies, many times from different software vendors or developed some of these in-house. They all had and continue having problems talking to each other as a result.

However, modern, end-to-end business processes are finding these functional boundaries a royal pain to deal with. This is because these software artifacts were not built with end-to-end business processes in mind but with automating the functional work within that function. It is no surprise then that you stored information about customers in the marketing, financial and sales modules, all often duplicated and with different customer IDs!!

Business Process Management in new companies may have the luxury of designing and developing software from scratch, often with internet-friendly browser based, customer-facing interfaces! You can design these software applications with end-to-end processes in mind.

However, if you go to any corporation that has been using IT for 25 years or more, you find a mess when it comes to making their IT process friendly! The Curse of the Early Adopter!. This is where many companies are slapping on SOA wrappers on their old software products and applications so that they can build a business process layer on top implementing end-to-end processes, making information flow from one system to another without manual intervention.

Large corporations are under enormous pressure to shorten their business process cycles because of their more nimbler newer internet savvy competitors. Insurance underwriting processes or claims processing in large older corporations have to be on the same nimble footing as a new younger insurance company. Many new ones have their customers do most of their work online including applying for insurance or filing a claim.

In addition, Business Process Outsourcing is growing in scope and size every year. Before you can outsource parts or a full process, it has to be modeled. If you have not done so, your vendor will not sign the contract without documenting what they need to deliver as services first.

BPM Modeling tools are invariably needed. Gartner is on to something here, especially the part about SOA friendliness!