BPM vs. Game Theory

BPM vs. Game Theory

OK, there is not going to be an actual fight here. What I'd like to do is compare two apparently different concepts from different fields - BPM and Game Theory, and show how they are actually not so different (but yes, still distinct), and then argue which of them has a better shot at improving the way we do business.

Since we are on BPM.com, I am going to assume you know what BPM (Business Process Management) is. The important point here is that BPM attempts to model and implement organizational behavior as Sequential, Repeatableprocesses or workflows. The goal is to optimize this representation so that future behaviors are directed toward an ideal flow of actions, and thus the business is optimized.

Game Theory is a broader field. Game theory seeks to understand the interactions between different participants or 'players' in a given system or 'game', and determine what decisions each of the participants should/will make according to the probabilities of success of those decisions, based on the 'rules' and outcomes of the game.

Game Theory has been applied to economy, business and commerce (some of its key reasons for existence), but less to practical business operations. Certainly it plays less of role in the down-to-earth, real life procedures and operations of most businesses, compared to BPM.

But things are changing. In September, I attended the annual BPM Event in Eindhoven, Netherlands. There, some of the world’s top BPM researches discussed the leading thought and progress in the field of BPM. What surprised me was the level of complexity, especially around simulation and modeling. But what was also eye-opening was the diversity in new frameworks for viewing business behaviors. More than one presenter showed a framework which was not based on a sequential process, but rather on how people in an organization interact with each other in a non-sequential, non-repeatable fashion - more like nodes in an interconnected tree, than stops along the path of a workflow. The ideas revolved around how people behave according to rules or even looser etiquette (as opposed to hard and fast rules). Keith Swenson's address particularly focused on this issue (more on that in my post on Ethical BPM here: http://www.pnmsoft.com/ethical-bpm-making-exceptions-exceptional-cases/).

For example, consider an R&D department of a bio-tech company. The department is organized in to small teams (sometimes 1-2 people) each of whom is working on a different innovation. The teams often need each other’s help, and the number of interactions between each team, before a product is actually developed, is too numerous to map out in a sequential workflow. But the way the teams interact (e.g. between a chemical producing team and a quality assurance team) can be modeled with a set of rules of interaction. The company’s decision-makers can also decide which inventions to support based on a probabilistic algorithm which takes into account the chances of success and the risk involved. Is this a job for classic BPM? I think not.

So let’s take a look at Game Theory again. Perhaps in a growing business reality where users function within a business ecosystem, a system that is constantly changing, but which can be modeled more accurately according to a set of non-sequential interactions and rules that lead to optimal decisions - perhaps in such a system, Game Theory may come again to the fore. I'm not saying that BPM is going to be replaced by professors who draw out complex equations in chalk on a lecture hall blackboard. Rather, it may be that future BPM suites may include Game Theory-like modules for defining how an organization works, and how it can work better.

It’s important to realize that BPM is only one wayof looking at how a business ought to function - not the only way. For BPM to continue to be relevant into the future, it must evolve and incorporate new ideas and business practices. I look forward to seeing this happen.

Eli Stutz
Author: Eli StutzWebsite: http://www.pnmsoft.com
Head of Knowledge and Collaboration, PNMsoft