I recently read a blog post by Jim Stikeleather, the IT Conversation We Should Be Having, on research conducted over the past 2 years by The Harvard Business Review, The Economist, CEB (formerly known as the Corporate Executive Board), Intel, and TNS Global on how the role of the CIO and the IT department is changing.
Quoting directly from the blog post, "a simple summary of the work suggests that CEOs believe that CIOs are not in sync with the new issues CEOs are facing, CIOs do not understand where the business needs to go, and CIOs do not have a strategy, in terms of opportunities to be pursued or challenges to be addressed in support of the business."
Some of the key findings from their research is startling:
- Almost half of CEOs feel IT should be a commodity service purchased as needed
- Almost half of CEOs rate their CIOs negatively in terms of understanding the business and understanding how to apply IT in new ways to the business
- 57% of the executives expect their IT function to change significantly over the next three years, and 12% predict a "complete overhaul" of IT
- Only a quarter of executives felt their CIO was performing above his or her peers
Although we have been noticing a gradual change in the relationship between IT and the business and how organizations are viewing technology purchases, I am surprised with how fast this change is becoming the norm and the expectation.
It's going to be an interesting few years to watch how this paradigm shifts and also how it impacts vendors as they adapt their value propositions and relationships.
According to a new survey from Delphix conducted in September 2012 by IDG Research of over 100 enterprise CIOs and top-level IT executives, there will be heavy investing in Enterprise Business Apps in 2013.
Specifically, more than 50% plan to invest in Business Process Management applications. More than 60% will be deploying new apps or modernizing old apps. The primary drivers are to reduce operating costs, improve productivity of the workforce, improve customer service and grow revenue.
Interestingly, the same study showed that 94% of these IT execs find it challenging to deliver new enterprise app projects on time and on budget.
These survey findings are in agreement with our experience with new and existing customers and partners in 2012: Companies are investing in BPM software to increase productivity rather than hire new workers. This trend is likely to continue in 2013 and we believe BPM will have another good year.
In addition, we expect to see a continuation of Cloud BPM solutions being adopted by SMB and Mid Market companies, not just enterprises. The combination of ease of use, low entry costs, and very rapid time to value has been a big hit in 2012 and we expect it to continue next year.
More companies are beginning to realize that robust BPMS implementations don't require programming or an army of technical workers and can be completed rapidly in days and weeks.
Here are the links to the executive summary and article on the survey.
I just returned from the annual Gartner conference in Baltimore, MD this year. Here are a number of take aways from the event:
- The turn out was good. I noticed the place was buzzing with companies who were interested in BPMS or learning about BPM best practices. It's a good sign that the economy is healthy.
- There seemed to be less vendors this year than usual and that may be due to the fact that more consolidation has occurred in this field at the enterprise solutions level.
- The impression I got was that BPM is now fairly mainstream in the enterprise market, with established IT Services and Content Management companies dominating after their acquisitions.
- The message from Gartner was still that BPM was for the enterprise and a major undertaking that requires companies to transform themselves and invest considerable Dollars if they choose to embark in a BPM initiative.
We don't agree with Gartner's position on this. Our target market and customers in the Mid Market and SMB space have been benefiting from our BPM solution for years at a fraction of the cost and resource investment the traditional enteprise players require.
I did also observe some interesting facts and trends after speaking to a number of vendors and analysts:
- The opportunity for BPM is now moving downstream in the marketplace to Mid Market and SMB companies as the enterprise space has been saturated with the big IT services companies. Most of the established players however can't move downstreams given their business models and technology stacks.
- There have been a number of proven metrics and ROI measures from successful BPMS implementations: On average, companies are seeing double digit ROI, with more than 50% of projects completed within 4 months. In addition, companies are increasing customer retention and gaining competitive advantages through BPMS implementations.
- As I suspected, Social BPM is non-existent yet and is in its infancy. There is no real world application or what benefits it can provide in practice. It is primarily marketing hype at this point, however will likely change in the next couple of years.
Overall it was a good conference and it validated further our target and positioning in the Mid Market. It will be interesting to see the development of this market in the next few years.