More and more organizations think of procuring their information technology through "the cloud". Hence, what remains in the organization are just the business processes supported through those could based applications. What impact does that have on business process management (BPM)?
BPM with cloud is better known as Cloud computing business process management. It is the use of (BPM) tools that are delivered as software services (SaaS) over a network. Cloud BPM business logic is deployed on an application server and the business data resides in cloud storage. According to Gartner, by 2016 20% of all the "shadow business processes" will be supported by BPM cloud platforms. The benefits of using cloud BPM services may as well be the benefits of using any cloud service as such. The SaaS delivery model removes the need and cost of maintaining specialized technical skill sets in-house. Use of cloud computing reduces distractions from an enterprise's main focus. It offers controlled IT budgeting and enables geographical mobility.
I can assure you that in Romania, one of the most advanced Internet markets in whole EU, all major companies have BPMs correlated to the cloud.
Lucian,
I would expect embarking on eg SAAS could be the start of a longer term development where the provider not only delivers the application as a service but gradually also some of the processes around the application, i.e. moving into the direction of BPO.
Any signs of that in Romania?
I don't have the overview to make a reliable statement, only in converstaion with senior CIO it became clear that SAAS gives much more opportunity for "shadow IT" by the business side of a company and therefore also opens the door for a shift towards BPO by the business. A challenge for Governance mechanisms.
The answer depends upon what you mean by cloud technology. The technology can be regarded in terms of a number of layers. In addition to Software as a Service (SaaS) other cloud technologies exist such as Platform as a Service, Infrastructure as a Service (IaaS), Data storage as a Service (DaaS) , Communication as a Service, and Hardware as a Service (HaaS). While organisations may acquire technology through the cloud, the impact will vary according to the level within the layered ontology.
If we focus on Software as a Service (SaaS) the ideal is where everything happens on the cloud and the organization can focus not on the technology but on the process. This is the ideal, but an ideal that we have been striving for for many decades. While cloud based systems bring us closer to this ideal, many important issues remain, both technical and non-technical.
Assuming that the technical issues can be satisfactorily addressed, the issues for business process management remain much the same as for more traditional approaches. We need to ask what metrics do we need in order to manage the business process, where and how can we collect the data regarding the metric, and how do we report the data, in what format, to the relevant person.
Cloud computing makes resource availability just like any other service model. Flexibility, increase in capacity on demand, cost effectiveness, low capital investment, very low hardship on procurement, maintenance etc.
But cloud computing also comes with its own challenges. Just like time share companies, what if the company over allocate the resources than it really have assuming a low capacity utilisation?
What about the risk of keeping the data and process logic with third party and eventually end up in sharing with your competitors?
For organisations with fairly larger size of users, is it really economical to go for subscribing to cloud based systems owing to high bandwidth requirements and associated costs ?
Software Licensing Cost: With introduction of multicore processors, many companies changed their licensing model from per processor basis to per core basis., Can cloud computing be an exception? The moment loss of revenue is felt by software vendors, there could be a shift in the licensing policy under cloud computing model as well eventually ending up in higher payouts.
Cloud computing is the right answer for smaller organisations for hosting their processes and applications. Cloud computing is also a viable business model for hosting generic software on per use payment basis. For companies of fairly larger size, they need to own and host their own software and hardware. Probably they can have their own cloud system.
Cloud computing is definitely the future of software systems as of now. But ownership model could vary depending on size and type of business.
BPM with cloud is better known as Cloud computing business process management. It is the use of (BPM) tools that are delivered as software services (SaaS) over a network. Cloud BPM business logic is deployed on an application server and the business data resides in cloud storage. According to Gartner, by 2016 20% of all the "shadow business processes" will be supported by BPM cloud platforms. The benefits of using cloud BPM services may as well be the benefits of using any cloud service as such. The SaaS delivery model removes the need and cost of maintaining specialized technical skill sets in-house. Use of cloud computing reduces distractions from an enterprise's main focus. It offers controlled IT budgeting and enables geographical mobility.
See a recent study http://www.marketsandmarkets.com/Market-Reports/business-process-as-a-service-bpaas-market-986.html
You can check Process Mate (http://processmate.net/) that is a business process management software in cloud.
There are challenges, one of the most prominent being Security.
Cloud computing is where an application doesn't access resources it requires directly, rather it accesses them through something like a service. So instead of talking to a specific hard drive for storage, and a specific CPU for computation, etc. it talks to some service that provides these resources. The service then maps any requests for resources to its physical resources, in order to provide for the application. Usually the service has access to a large amount of physical resources, and can dynamically allocate them as they are needed.
In this way, if an application requires only a small amount of some resource, say computation, then the service only allocates a small amount, say on a single physical CPU (that may be shared with some other application using the service). If the application requires a large amount of some resource, then the service allocates that large amount, say a grid of CPUs. The application is relatively oblivious to this, and all the complex handling and coordination is performed by the service, not the application. In this way the application can scale well.
http://stackoverflow.com/questions/1067987/what-is-the-difference-between-cloud-computing-and-grid-computing
Moreover, clouds allow to sell the same CPU to 2 customers by telling them it each one is 1 CPU ....
Moreover, cloud computing is a branch of Information technology that invites businesses to become virtual, grid computing on the other hand calls for a shared environment on a common computer system from multiple administrative domains.
If you're using cloud business intelligence surely it will have a greater impact to BPM rather than the usual SAAS. With cloud by it will be easier to analyze and get data from every channel and division, since now on the bi advances to give suggestion to management on what or which business process went wrong or successfull by the tool of predictive or prescriptive analytic.
Thats why now the data scientist is needed.
As far as it goes cloud with The use of SAAS on BI will have an impact to BPM.
You really shouldn't need BPM if you design you system correctly and allow the human's at the UI do the processes directly. This will give the flexibility we need in our operations. The problem will be governance which is mostly a scare for management but maybe a blessing for the organization. When we can have individuals share and build their ideas together for the better good of the whole; we all win. The problem will then be the cycle of what innovation is and what is a repeatable process or optimization of processes. That will be the next frontier.
I would say that the nature of business process management will differ based upon how you design the business process execution. I don't believe that there will be no need for business process management. How the process is managed may change. Cloud computing may allow the organization to enable those at the operational level to assume more autonomy. Alternatively, cloud computing may allow higher level managers to extend and deepen their level of control. The technology is neutral, it does not care how it is used. The decision as to how cloud, or any other technology, is used is a design decision. The decision should be informed by how the process is to be designed, which in turn should be based on the goals set out for the business process and how the business process is to support the organisational strategies. The culture of the organization is also an important factor to be considered. These issues should be considered before we start making decisions about technology.
Cloud technologies provide great potential to help automate and transform organisational processes, and can be used in a wide variety of ways, How we use these technologies is not simply a technological decision.
More controls need to be implemented but these may in turn impact the business processes negatively.
The issue of TRUST is the biggest impediment to cloud usage and will continue to be if we are to truly make cloud an economically practical solution for us. The point of information creation is usually not at the cloud but at a distributed location and is fed to the cloud. This to some organizations is a duplication of data sharing but it is also a matter of trust on what goes up to the cloud. We are finding in defense work that the cost savings of cloud is starting to erode as more and more participants keep separately data storage for their own tactical and operational reasons. Where cloud could help the most right now might be in the strategic realm; but again trust will be even more of an issue to sharing at that level because of the politics involved.
The management of a company must change their business approach, having data and applications on Private or Public Cloud.
They have a major problem: the security and the confidentiality of their data.
But they also have many advantages: reducing IT costs, increasing their business visibility, maintenance and security offered by providers and periodically updating of hardware and software.
Arguably the impact of cloud technology on business processes will be identical to the impact of single instance enterprise applications on the multinational organisation: inflexibility of software processes to an evolving business reality, decreasing data quality due to this inflexibility, and ultimately, recourse to new vendor driven reporting paradigms which will purportedly satisfy the thirst for management information. The real challenge for organisations integrating business processes with information technology is not the technology itself, it's the management capability to understand how to find a balance between the political desire for performance visibility, and the technical prerequisite of maintaining a close fit between configured software and the actual processes being tracked. It is unlikely that the business models of the technology vendors will allow for the cultivation of such non-vanilla competencies.
Two points I would like to raise as they can have an impact are
I think Privacy of personal or sensitive information is important. You need to know where your data is stored (What country and location) What privacy policies and protections are there for your data.
Secondly can you get your data back? A data exit strategy more so. More and more businesses are moving to the cloud for software as a service to reduce costs and simplify IT. This is great but if your SAAS goes bust, or increases costs and you need to change products or services can you get your data back? I know of a number of popular SAAS vendors that do not have the capability to give your your data back.
Complementary to my previous point, can you backup your SAAS data? You should be keeping a backup of your cloud data. A Spiceworks research report highlighted
40% of survey respondents have lost data within their SaaS applications
I look at BPM from two directions.
1) That supports standard that predominantly transcends across all industries such as accounting & financial management, HR administrations, and other general administrations. These can be easily procured even by outsourcing the process to 3rd party providers.
2) That supports unique and critical business processes that differentiates one business form the other.
Cloud, while does offer reduced cost, could reduce the ability to differentiate. Organizations must first define their strategy and then align the cost structure to support the strategy. Easily said than done. My observation is most companies just go thru the motions without a disciplined approach.
when bringing workflows (at least partly) into the cloud, compliance issues might become an additional hurdle, since controls that are usually integrated into business processes might become inpractical?
SLA might solve some issues, however, they thwart a little bit the promised flexibility of cloud services. Research in this field is going on, see, e.g., http://ceur-ws.org/Vol-998/Paper20.pdf or the upcoming book on "Business Process Management – Driving Innovation in a Digital World" edited by J. v. Brocke.
Great input. Thanks.
Does somebody have examples how the provision of software though the could changes IT departments or maybe even make them report to the BPM organization?
To start with, no objection about the impact of Cloud technology on the development and use of the business applications. It increases the operational efficiency and optimizes existing solutions to solve problems as being a challenging aspect of every business process management
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