Posted by: Adam Deane | 15/09/2010

The Father, The Saas, and the Holy Host

BPM SaaS and Hosting“Once a new technology starts rolling, if you’re not part of the steamroller, you’re part of the road.”

A decade ago, the experts said that moving to web-based software won’t fly. “Desktop applications are better, more stable and have more functionality” “Web-based applications won’t be used.”
A decade later all the BPM vendors have web-based applications…

Hosted BPM
The same will be for hosted BPM solutions.
“This hosted kind of nonsense won’t fly”, they say. “Security issues, costs, hassle…”

A hosted BPM solution is just part of the evolution of the BPM offering.
Having a hosted solution doesn’t mean BPM vendors will need to rebuild their software from scratch. It just means that they need to add the ability to run different workflow processes for different customers on a hosted server.

Do customers really want it, or is it hype?
These are some of the reasons that I hear managers in organisations say that want hosted solutions for:
• Hassle. Business wants to bypass the IT department. IT is seen as a bottleneck to get their programme up and running. External hosting will bypass the IT.
• Lack of IT staff. It’s easier to purchase hosted hardware than recruit more IT staff to look after it.
• Budget. It’s easier for business to increase the budget for their department for a BPM programme, than to get IT to increase theirs to purchase additional servers.
• The organisation already has a hosted solution for some other department/programme. Adding hosted BPM solutions to the stack makes sense.

I’m sure there are more “business values” but these were the reasons I’ve heard. (Take the above with a pinch of salt. Not all the managers have budgets or the clout to follow through with the actual change.)

So, Is Hosted BPM the next big thing?
Do I think that Hosted BPM is the next big thing? – No
Do I think BPM vendors will make a fortune from it – No.
Do I think that BPM vendors will die without it – No.

Hosting BPM solutions is just part of the evolution of the BPM offering.
It gives customers an option to solve a business pain of maintaining hardware, software, skills and costs.
It might give some vendors a competitive edge on other vendors, (“cutting edge technology”, “we take care of all your hassle”…) but nothing dramatic.

SaaS, PaaS, BPM in the Cloud
SaaS is the buzzword that is used for cloud solutions, hosted solutions and data centres. But actually SaaS is a sales model. Renting out the software per month, per week, per process, per user – instead of one down payment for licenses.
SaaS is just another sales model like selling licenses per process, selling license per user, or selling license per transaction.
The upside: Low cost and low risk for the customer. Ability to win deals without going through tenders. “Foot in the door” approach..
The downside: Sales guys don’t get paid upfront and it takes a long time to grow a customer list with a steady income – therefore sales guys will be less motivated to use this model.

So another business model.. big deal?
Ah, but here is the twist… SaaS, I believe, will revolutionize BPM
The combination of hosted solutions and Saas will force BPM vendors to be creative, to invest in off-the-shelf solutions, to redirect their energy from BPM platforms to BPM solutions.

You’re looking for an “expense approval” workflow? – It’s already up and running and ready to be used.
Happy with it? – Excellent. Want some changes? Ok, that will cost you extra. Duplicate the workflow. Add changes. Deploy….

At the minimum, hosted solutions will change the way BPM vendors do presales.
A lot of vendor creativity comes during presales, finding solutions for customers.
Professional services will also change, as the work will be done from the vendor’s offices instead of at the customer site (billable charges..)

Bottom Line
SaaS and Hosted solutions, unfortunately, are not “the next best thing in BPM” or “a defining moment in technology history”, but they are part of the changing BPM offering.
Not havimg a hosted solution is, currently, not a deal breaker, but it will be a deal-maker in the future.
One thing is for sure: Hosted solutions are here to stay. Those BPM vendors that were smart enough to see it coming have added it to their software offering.
Those that haven’t – will do it later on in a panic.

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