Posted by: Adam Deane | 08/07/2010

BPM will generate $23 Billion of hype in 2011

BPM Hype Graph 2011The BPM Industry will generate $23 Billion of hype in 2011
This is not an estimate. This is an exact and true value based on pure BPM mathematical calculation models.

Unlike “predictions” and “estimates” – this is the real deal.
The calculated value is official, final and cannot be changed.

The following is an explanation of the calculation.
If you do not have a masters in mathematics or skipped maths in your A Levels – you may want to skip to stage 4 of the explanation.
I urge you to follow carefully as the calculation is explained. Understanding the calculation model is more important than the calculated value.

Stage 1 – Baseline

As a baseline, take the “BPM market size” estimates given by the BPM analysts:

• In 2007 Gartner said the size was $1.0B and would grow to $2.6B in 2011
• In 2007 Forrester said the size was $1.6B in 2006 and would grow to $6.3B by 2011
• In 2007 IDC predicted a market size of $5.5B in 2011 at a growth rate of 44%
• In 2007 Datamonitor predicted a market size of $1.4B at a growth rate of 14.5%

Don’t forget that unlike real revenue results – estimates are never wrong.
Just because most BPM vendors didn’t see hugh additional revenues in the last few years – it doesn’t mean that the estimates were wrong.
It just means that the vendors weren’t working hard enough to meet those estimates.

The total of these predictions is $15.8B

Stage 2 – Forecast

Add 10% to the total.
Optimism is good. Wishful thinking is better.
If you don’t wish that BPM will grow – the growth fairy won’t come.
On the one hand, we don’t want to seem too unrealistic.
On the other hand, we want to bring hope to BPM vendors, something to cling on to. The pot of gold is just around the corner.
Don’t forget that the higher the forecast is – the more the vendors will love you.
Luckily we aren’t accountable to anyone if the prediction is wrong.
Just because the market couldn’t reach the prediction doesn’t mean that the estimates were wrong.
It just means that the market has missed the target that was set for it.

The total of these hyped predictions is now $17.38B

Stage 3 – Unforeseen Costs

Now anyone can do stage 1 and stage 2. It’s simple maths. Stage 3 is trickier.
Here you need to add hidden costs, overspending, impact analysis and haircuts.
The idea is to make the water as murky as possible, thus rending any kind of auditing useless.
Basically you set 3 variables: x,y,z.
The calculation is (x^y/z)*(x+y) – (z^y*100%)
Now that you have the calculation, leave it alone. Instead add the digit 8 to the previous total.
“8” is an accepted financial value that basically ensures that you have added good luck to your calculations.

Stage 4 – Finalisation

The total now stands on $17.46B
This is a hard number for people to digest. Too many different digits…
The best way to deal with this problem is set the complete calculation aside and get analysis help from a professional, usually a kid.
Best if they are not above the age of 9, and still believes in Harry Potter.
In this case I asked my niece what is the biggest number she can think of. “A billion” was her response.
The next step is to decide on a 2-3 digit prefix. Numbers like 45, 76, 23 are great.
They should embed an odd digit and an even digit. The decision on the order of the digits is based on if you want to show a growth or a decline:
$23B shows growth.
$21B shows decline.

Hmmm… $23 Billion sounds like a good number. Yes.. I like it…

Bottom Line

The BPM Industry will generate $23 Billion of hype in 2011


Responses

  1. And that is why (after 10 years at an analyst firm that spent a lot of effort creating market forecasts) I decided that at MWD Advisors we’d steer clear of them… it’s too easy to lie to yourself. Nobody wants to see a forecast that’s flat or declining…

  2. Brilliant, we need to apply these quants to our sovereign debts and then we can all go on vacation again!

    You will still need a RETE engine to evaluate this.

    see: (http://www.tomdebevoise.com/blog/?cat=6)


Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

Categories

%d bloggers like this: