Peter: Hello this is Peter Schooff, Managing Editor at BPM.com, and today I have the great pleasure of speaking with Jim Sinur, past BPM analyst for Gardner and one of the most preeminent names in BPM.
Jim Sinur has a brand new book that he co-authored with Peter Fingar titled “Business Process Management the Next Wave” and Jim will also be one of the keynote speakers at the IBPMS Expo, which is coming this October 14th to the 17th in Chicago.
So first of all, Jim, this is my first podcast with BPM.com, so I'm very pleased that it is with you. Thanks much.
Jim: Well thanks, Peter. I appreciate the offer and the opportunity to answer some questions that you and maybe some of your constituents have, so it’s my pleasure.
Peter: Great, so first off there has been a growing discussion about intelligent business operations. You’re one of the pioneers of this concept so what do you see happening in this space?
Jim: Well intelligent business operations really come out of a need for business to have better outcomes. They need to raise revenue, they need to cut cost, and they need to please their customers. They need to dynamically change and with processes of old you had to do that by hand. So you need some intelligence in not only your processes but in recognizing emerging patterns in business and business marketplace and also potentially around the world if you are truly multinational.
So you have to have business operations that recognize, suggest and act in a much faster fashion because the pace is quickening out there and you have to keep all these conflicting goals going simultaneously.
Peter: Definitely, the pace is certainly quickening in everything. Exactly how would you define a smart process?
Jim: A smart process is one that assists the resources or includes some significant intelligence. I like to keep it kind of simple if it has event recognition, complex event recognition, in other words, the ability to sense patterns, it’s intelligent.
It has the ability to potentially notify you when a pattern is of interest or automatically analyze or suggest analysis for you or have embedded analytics, that’s smart.
The other is if you’re engaging your knowledge workers in new and different ways so that they’re just not stuck with a best practice, they are defining and selecting from emerging better practices, that’s smart as well.
Intelligence comes from patterns and the technology to do that. It comes from algorithms embedded, we see that with big data and BI and polyanalytics. The ability to leverage and harness your knowledge workers in new and different ways and potentially people that are in your supply chain or you don’t have as employees that you want to leverage.
Peter: Why do you think organizations need intelligent and smart processes?
Jim: Because humans can’t keep up. The pace is quickening, the set of goals are dynamically shifting and you have to have some form of intelligence whether it's processes or whether it’s rules capabilities, rules management capabilities, assisting you. You just can’t do it perfect to get the kind of business outcomes that are demanded today.
Peter: Definitely, now how about some real-world examples of companies that have implemented this?
Jim: Well, there are a number of really excellent examples. I’ll just give you a couple and I’ve got a number of them defined on my blog. One that is kind of close to my wife’s heart is the idea of retail therapy we call it in our house. If my wife Sherry is having a day she needs to go shopping. So there is this very well known chain that is able to detect you as a customer when you’re walking near by them, will give you an offer to get you in the door, by your cell phone and pushing something to you.
Well you know that is pretty common place, what they also can do is figure out where you are in your location in their store, sense potentially a situation where they have either a good deal for you, if you buy a couple of things, or let’s say you’re in the men section and you’re looking at shirts, they might offer men shoes to my wife. I am just hoping she buys me both of those things.
It could be an overstock situation, it could be a discount situation, or if person doesn't have their cell phone you can’t sense where they are but at the purchase, you can print something out on the back of the receipt. So this particular organization dynamically knows who the customer is, particularly if they have their cell home number, particularly if they have a credit card and their known by the company. Or even if they are a straight-up customer who walked in off the street, they are able to intelligently offer them different things for a revenue lift and potentially for clearing stock.
Another example is a surgery center where there are three theaters. They tag all the resources; the doctors, the nurses, the patients, the equipment, they’re all tagged and before the day starts they run a simulation and they have a visible result of that simulation saying if everything goes perfect this is how it will work. This is how it will leverage the Surgecenter, this is how to leverage the equipment and it will leverage the doctors.
As you know in the real world things don’t always go perfect. So if a doctor's late or a procedure takes longer, a patient doesn’t recover fast enough, they’re able to dynamically re-simulate what’s the best alternative and at the same time they notify the people that are waiting in the waiting room that are worried about their brother, sister, mother, dad who’s under the knife. Here is an example of real time response.
I probably have a dozen others but those are two interesting ones that you’re liable to run into.
Peter: And they sound very dynamic. Now what is intelligent agent technology and how does this relate to BPM?
Jim: Most of the intelligence that I am talking about in the retail experience and in the Surgecenter experience, all the intelligence is centrally controlled. So let’s use the Surgecenter one. Let’s say you made the scalpel smart and they had some intelligence to know if they were sterilized or not, and when the last time they were sterilized. Now it becomes a smart agent and it knows its own state.
So linking to the internet of things, linking two robotics, linking to machine intelligence now you have agents that going out there and behaving on their own. And that’s on the mechanical side.
On the human side you have intelligent agents that you can hire temporarily, you may have somebody out in the ether that you want to use as an expert dynamically, so having smart resources that bid on work.
Let me give you an example, in some car manufacturing plants there are usually multiple paint booths. A vehicle that is getting built, you know has a platform that runs it around and it’s an agent. And that agent can ask the booths to bid on painting them, so it depends on what paint is loaded, what the accuracy of that paint booth is, how many flaws come in and out. The agent that is carrying the car can have each of the paint booths as agents bid on whether or not they should be painting this vehicle. The platform that is carrying the car decides which booth gets to paint it based on is it free, is it the right color paint, does it have high enough accuracy.
Peter: Very interesting. Now looking at the BPM market there has basically been a flurry of M&A activity in the BPM sector. What do you think this means for “pure play” BPMS?
Jim: Well, there were at one time, and I had a count of these accurately when BPM was really in the really early days, there were over 200 BPM players, and you know the market can’t sustain that even though the market is growing very fast at a compounded annual growth rate of 13% to 15%, which is good even in a down economy. When it was really going well it was 20%.
You can’t possible support that many players, so that is one factor, too many players. The other factor is that a lot of the older generation players in the process market, like content players, said we want to up our game, we want intelligence too. We are really good at case management, really good at content management, we want to add some intelligence and so they started buying.
So that is another factor, and another factor is in order to have an intelligent process platform requires a lot of functionality. Therefore, you have to have a fair amount of capital to invest in building these platforms and some of them are just plain under-capitalized.
Then, of course, there’s the usual players that start up with an exit plan to get bought, that plays into it. It’s a number of factors so if you take a look at the intelligent BPMS players, there’s probably about 15 that would qualify for let’s say a Gardner Magic Quadrant or Forrester's Wave. There are a lot of other uses other than Intelligent Business Processes.
There’s workflow, there’s content management, there’s lightweight workflow, so there are other markets out there that support players. So it’s natural for markets to explode in the beginning and contract later.
Peter: Definitely, now in the history of BPM, it was mostly fueled by early adapters who understood it. Now do you see the market drifting back towards early adapters or basically the early majority?
Jim: Well, what we are seeing is it depends. There is the maturity cycle for business process. For those that are employing, let’s say, agent technology in the best possible way, those are early adapters and its 10% to 15% of the clients. BPM itself is in the vast majority now; everybody has process efforts it seems, so BPM itself is moving forward.
Intelligent BPM is probably a near 50% that are employing some form of optimization along with their processes, whether they’re combining predictive analytics, automated business discovery by watching logs, simulating ahead of time, simulating with real data, using multiply analytics based on dashboard behavior and then requesting an analytic to give alternatives.
The vast majority of people are using business process management, in some way shape or form. A lesser majority, and I am not sure it’s majority, it’s probably more around 50% are using some form of intelligence, whether it’s simple business rules, or some form of algorithm, and then there is about 15% that are pushing the envelope. The two examples I gave you were from people who were pushing the envelope.
Peter: Very interesting, this is BPM.com’s Peter Schooff speaking with Jim Sinur, just a reminder Jim has a book I think coming out just about today.
Jim: In fact it reached Amazon today.
Peter: And today is 9/11. It's called, "Business Process Management the Next Wave", and he will also be a keynote speaker at the IBPMS expo, which I’m going to be there so definitely worthwhile to check out, and I think you’re going to be signing books there too, right?
Jim: I believe that is what we have arranged; I’m looking forward to chatting with folks. I’m going to have some time to do that so I’m looking forward to mixing with the crowd too.
Peter: Fantastic, well I’ll see you there, and thanks so much Jim.
Jim: Well thank you. I appreciate it.