Customers Typology: The Paralized Analyzer

The Paralyzed Customer is not like the Customer who Knows Everything. He is very different from The Captive. The Paralyzed Customer is engaged in Analysis, so the process is: Analyze-Paralyze.

The Paralyzed Customer reacts to the Consultant's papers and recommendations, with no biases. The main problem is the endless loop of analysis in order to ensure no error included in the Consultant's product. No error is 100% error free product (not even the slightest error).

For example, if the product is a Request For Proposals (RFP), the Paralyzed Customer will initiate an endless evaluation process, even if the Consultant built the RFP together with the best customer's employees.

In a large number of long meetings, he will investigate the RFP. The following questions are only examples:

Do the requirements conform to the Business Strategy? 

Are the requirements in accord with the IT Strategy, Policy etc.? 

What are the expected costs for the implementation in one year? 

What are the expected costs for the implementation in 5 years, ten years, twenty years? 

You can be sure that he will ask any question, you never think of and ask for detailed answers.

After completing this tedious process he will give the corrected RFP  to the enterprise's lawyers and administrator. They should confirm the RFP or ask for additional corrections. 

The RFP is submitted  2 or 3 years after it was written. Sometimes it is too late because of major changes and sometimes the RFP is less adequate than it was when it was released by the Consultant. 

Considerations
The description in the RFP example, depict the problem of the Paralyzed Analyzer: If a Short Term or immediate action is required it will not be taken. In extreme Paralyzed Analyzer cases, no action will be taken at all after a long analysis process.  

I will demonstrate the problem by using a technology illustration located in the beginning of this post.

At the time of defining the selection criteria the Leading Products developed Capability A. This Capability has significant Business Value for the customer. Other products lack this capability. Probably the difference is because vendors developing Leading products invest more than others in R&D.

Vendors learn from their competitors, so after a year, they also developed Capability A. Meanwhile, the Leading Vendors developed another significant capability: Capability B. 

The damage caused by Paralyzed-Analysis is multi fold: 

1. For two years he did not select and implement a product, so he did not utilize Capability A and for one year he did not utilize Capability B (in case of selecting Leading Product) or he did not  utilize Capability A for one year (if he would select non-leading product, which may be cheaper to purchase).

2. After two years he will not be able to distinguish between Leading products and other products, because his criteria will focus on Capability A and Ignore Capability B. After two years Capability A will be included in all candidate products. The result will be selection process assigning higher than planned weight to Cost and lower weight than planned to Quality.  

3. The long analysis is costly.

Conclusions
The Consultant will face a problem if a quick decision and implementation is required.

His challenges are identifying states requiring quick decisions and actions and leading the Paralyzed Customer towards a shorter process than he used to.

SOA is Dead again?

Winchester Mystery House  Picture source: Wikipedia

On January 05, 2009 Burton Group's Analyst Ann Thomas Manes, published a controversial blog post titled: SOA is Dead; Long Live Services.

Few days ago I answered an ebizQ Forum's question: 

How important is SOA to a company's mobile strategy? Only two experts (including me) answered the question.

SOA Questions asked in the same ebizQ Forum two or three years ago where frequently answered by 10 or 15 experts.

Is the lack of interest in SOA (despite the Mobile context included in the question) an indication of SOA's final death? I do not think so.

I have to agree with Mark Twain's saying: "The reports of my death have been greatly exaggerated".

As far as SOA is concerned, Mark Twain's saying could be paraphrased as: The reports of SOA's death have been greatly exaggerated.

Whinchester Mystery House is a well-known mansion in Northern California. According to Wikipedia: "It was continuously under construction for 38 years and is reported to be haunted".

If you would like to know, why it was continuously under construction for 38 years, you could read the article in Wikipedia.

About ten years ago, I worked as a freelance Consultant, for Giga Information Group (which was acquired afterwards by Forrester Research). 

Giga Information's analyst Phil Murphy, used

Whinchester Mystery House continuous construction, as an analogy to Information Technology strategy: 

Every few years we (Information Technology community) invent new technology, new architecture or new concepts and renounce older concepts, technologies, architectures etc. 

However, the term renounce, in this context, could be defined as something we frequently use but seldom talking about. 

For example, The Mainframe which was "dead" more than twenty years ago is still alive and kicking.

More than ten years ago, I asked for Service Based implementation references sites.

The reference sites requested were Mainframe sites, because a client considered Core Systems development initiative, based on Mainframe infrastructure and Service based approach.   

As usual with Leading Age Technology, many reference were too small or in early development stages or irrelevant.

Only one reference site was impressive. It was a Finish site. 
The site success could be partially explained by, their previous successful implementation of Component Based systems.

My Take
Phil Murphy's Whinchester Mystery House analogy is today as relevant as it was 10 years ago. 

We talked ten years about SOA and now we are talking about Mobile Computing, Cloud Computing etc.
In  ten years IT workers will stop talking about Mobile Computing and talk about other concept or technology.

Although, nobody is talking about SOA, it is a frequently used Mainstream concept,architecture and technologies.  

The trouble is that successful and relevant reference sites numbers are still too small.

Those who successfully implemented yesterday's concepts and technologies, will usually succeed in implementing the new concepts and technologies.

Those who fail to realize yesterday's technologies Value Proposition, will usually miss tomorrow's technologies Value as well.  

As far as SOA is concerned, many of the failing enterprises need urgently Consulting services in order to succeed.

  

Customers typology: The Captive

picture source: Wikipedia

The word Captive in this context, is not about someone caught by enemy's forces.  It is about a customer, whose conception about the Consultant's topic are dictated by an expert or someone pretending to be an expert. 

In a previous post you can find an example. The post titled: Vendor Survival Guide: Supermarket, Grocery and Kiosk. 

An example depicted in that post was Data Sorting Software product selection process. The Captive Customer selected a product of Servers and Operating Systems vendor (The vendor is an analogy to a Supermarket). I recommended, a superior product of a small company. Sorting Software was the only product the company developed and marketed (Kiosk).

The "Supermarket" does not care, if you buy chewing gum, as long as you buy meat, fish, bread and milk (Servers, Storage, Operating Systems etc.).
The kiosk's existence depends on chewing gum (Sorting Software). The "kiosk" will try harder, by selling better and cheaper Software.

The supermarket has to sell chewing gum, in order to be a one stop shop. However, its profits on chewing gum are negligible. Therefore it does not care much about selling chewing gum.

Supermarket, kiosk and the Captive Customer
A rational buyer, who is buying only chewing gum, should prefer buying it at the Kiosk and not at the Supermarket.

Similarly, a rational buyer should prefer buying cheaper and superior Sorting software product, from a vendor focused on this product.  To my surprise,  the customer rejected my recommendation and chose an inferior and more expensive product, developed by a vendor selling a variety of software and hardware products. 
It should be noted that the same customer's decisions were often rational decisions.

Why does the customer decided irrationally?
The Customer was a Captive Customer. The Vendor's  Representatives told him that their product is a lot better than the dedicated vendor's product. It was a good enough reason for choosing the inferior product.

Remember, the vendor's employees do not care much about selling Sorting Utility program. Therefore, they did not try to convince him to chose their product.

Main Characteristics of the Captive Customer
The Captive Customer's opinion is that someone else (not the customer) is the oracle. He will do whatever the oracle will say.
The oracle could be a Software and/or Hardware vendor such as: Oracle Corporation, Microsoft, IBM, Apple, HP, SAP, Google etc.  

He could be a Software House, an Information  Technology Research company or even a mythological former manager, who worked for the Customer's organization twenty years ago.
 
How can the Consultant influence a Captive Customer?
changing a Captive Customer's viewpoint is a difficult and complicated process. Success is not guaranteed. You should utilize different method's and different approaches to change viewpoints of different Captive customers.

The following bullets describe potential approaches and ideas based on my vast experience:

• Avoid of confrontation with the Captor

Explain to the Captive Customer what and why you prefer the solution you recommend. Do not criticize the Captor and do not describe his motives and benefits, in case the customer accepts his recommendations (Usually Captors are selling Software and/or Hardware and/or additional Services).

• Refrain from explaining previous mistakes based on the Captor's recommendations

The Captive Customer could have Patricia Hearst's Syndrome. She identified with her kidnappers' ideas. He may be identified with his Captor's views. If he developed Patty Hearst's Syndrome, confrontation with the Captor could operate like a boomerang.

• Present Research, Viewpoints, Case Studies of others supporting your viewpoint 

The data should be with clear cut views and the source should be a person or a company or academic authority, which the customer respects.

For example, many Captive IT Customers respect, research firms such as Gartner, Forrester Research and IDC. In that case, present answers to specific queries issued by you or the customer, relating to the current issue.

You can also present Research Notes, verbal Analyst's opinions etc.

Others could respect a former co-worker or former manager agreeing with your views or even evangelizing these viewpoints. Let them know what she or he thinks (directly by talking to him or her). 

According to my experience, sometime Not Invented Here(NIH) supporting evidence in other language may help you more than local evidence in your own language. 

   

Customers Typology: The Self -deprecating Customer

image source: Wikipedia

The Self -deprecating Customer is exactly the opposite type of The Customer who Knows Everything. He automatically accepts the Consultant advice, without any questions or hesitations.

Probably, you will not believe that the first example of a Self -deprecating Customer I think of, is the CIA. It is about a project named Triangle. Triangle was an Information Technology project of Legacy Modernization and systems expansion after September 11 attacks. 

After  completing the Development phase, the CIA begun the Implementation phase. However, someone who was a Senior Manager, thought that it will be a good idea to rethink if the project fulfills its goals. A committee of 100 leading academic and IT industry experts, investigated the project.

The main recommendation in  the committee's detailed report was: stop implementation and fix the errors in the systems. Afterwards the systems could be implemented again.

It should be noted, that stopping implementation at such advanced stage of the Development Cycle, is very expansive. However, after reading the report in the Web, I understand why the experts recommended to stop and rethink.

The CIA made almost every mistake I could think of. As far as this post is concerned, the self -deprecating mistake was decisions taken by consultancy vendors instead of CIA Managers.

Is not he the ideal customer a Consultant could think of?
It looks like ideal circumstances for consultancy: The consultant's long term employment is ensured, his vision and recommendations are accepted, as well as the deployment methods he recommended.
However, the scenario could be not as good as the consultant could imagine. The following are main drawbacks:

1. The customer takes no Responsibility
In case of failure, regardless if it is due to the consultant's mistakes or unrelated factors, the consultant will be responsible for it.
The customer would argue that he done exactly what the consultant recommended.   

 2. Following blindly is not limited to following the consultant
 The customer may easily follow someone else's advices without any doubt. It could be a vendor or another consultant. The result could be lack of consistency and no systematic approach. 
For example, another consultant contradicting recommendations in related topics, could be executed along with the consultant's recommendations.

3. The Customer is not learning
In the long run this could be the most severe problem. For example, one of the goals of SOA consultancy is to create a Reuse Culture.
Most of SOA initiatives without Reuse Culture fail.  The Self-deprecating Customer could easily preserve the old non-Reuse Culture. 

Usually I prefer to give to my customers fishing rods and not fish.
The Self-deprecating Customer usually prefers fish.   

Customers Typology: The Cusomer who Knows Everything

I worked as an Information Technology Consultant, for many Customers. Customers are different in their Self-Perception, in their view of the Consultant and the Consultancy Process. They also differ in the Enterprise size (Large, Very Large, SMB) and their Vertical Industry (e.g. Telco, Banking, Insurance, Utilities, Public Sector). 

Customers Typology could effect the interaction between them and the Consultant, as well as the probability of successful consultancy.
This post is about a particular customer type: The Customer who Knows Everything.

The Customer Who Knows Everything
This Customer type is sure that he knows more than anyone else. He is also sure that his understanding is better than any body's understanding. 

His point of view is manifested in the Decision-making process: 

1. There is no correlation between the Consultant's recommendations and the decision.

2. There is no correlation between the consultancy quality and the decision taken.

3. The decisions may not be related to information collected and analyzed during the Consultancy process. 

The consultant may be a knowledgeable and experienced expert in a topic. For the Customer it could be the first time he and his enterprise are exposed to this topic.  

The consultant's work could be excellent: assembling data from variety of sources e.g. Analysts' Research Notes, Case Studies, similar enterprises 's strategies, approaches' solutions and conclusions etc.

The conclusions based on this excellent work could be that strategy A or Software/Hardware product A's implementations usually fail, while strategy B or product B's implementations usually succeed.

The Consultant's recommendation could be: select Strategy B implemented by Product B.   

The Customer who Knows Everything, will chose Strategy A implemented by Product A. He could argue: "I know that everybody in the world selecting Strategy A implemented by Product A failed. I know better and understand more than them, so I will be the first to succeed". Needless to say, that he fails like all the others (sometimes even more sever failures than others).

According to Aberdeen Group's SOA survey, Best in Class (BIC) Enterprises (those whose implementations succeed and provide real Value) used more Consultancy Services than others. Laggards (those who fail to provide Business Value), refrain from using Consultancy Services or purchased less Consultancy Services than others. 

I would guess that, the Laggards group includes, at least, few Customers Who Know everything.

How to Consult a Customer who Knows Everything?
The question in this paragraph's heading contains the answer: If someone knows everything it is impossible or at least very difficult to consult.

Effective consulting requires conceptual change. Information, data and brilliant analysis would not change the customer's approach. 
A Psychologist may change the concept, but we are only IT Consultants not Psychologists. 

He will learn only after painful failures. To help him, the consultant should repeat and emphasize his conclusions contradicting the customer's decision, so the customer could blame only himself in case of failure.

However, sometimes even repetitions of the recommendations contradicting the customer's approach, could be in vain: The customer will know who to blame.
The Consultant opposing the wrong conclusions and actions taken by the customer, is to be blamed.  

To Think Differently or When Wisdom of the Crowd is not Wisdom

An Example of a card from Ash experiment

Image Source: Wikipedia

In a post in my other blog (written in Hebrew), I wrote that sometimes my opinion differed from the majority opinion. Sometimes it also differed, from leading experts opinions in the field or the topic. In those cases, I acted according to my opinion and not according to the Majority view.

Wisdom of the Crowd is a method used more frequently than before. The essence of Wisdom of the Crowd, is assembling many non-expert opinions as  information supporting Decision making.  

The classic usage of Wisdom of the Crowd is for estimation of quantified problem, e.g. a Taurus weight. However, usage of Wisdom of the Crowd could be misleading. 

In this post I discuss two factors, which oppose usage of Wisdom of the Crowd, including few examples. 

Factor 1: Conformity and Social Behaviour

The illustration in the heading of this post, depicts an easy task of distinguishing between lines length. It was included in Solomon Asch's Conformity Experiment. All but one of the participants were "confederates" (i.e. actors).   

The "confederated" answers to some of the line similarity tasks were wrong and identical. 75% of the participants conformed with wrong "confederated" answers.

We should expect higher conformity in case of more difficult questions.
As far as Wisdom of the Crowd is concerned, expect identical answers in similar situations, i.e. Social Interactions between people answering the question.

Factor 1: Information Technology example
More than a decade ago, an Insurance Company's CIO presented in a local IT conference. The CIO was brave: He publicly admitted a colossal failure of selecting and implementing a strategic Software product. 

He admitted a waste of hundred thousands of USDs and few years due to this mistake.
He was not the only one to commit this mistake: many others made the same mistake and get similar results. The only difference was that other CIOs did not admit their failure.    

About half of Israeli Enterprises chose this software product. The CIO said: "We failed same as everybody in the Israeli IT".

A thought flashed in my mind: Should I scream not everybody? My clients, who followed my recommendations, did not fail. They did not chose that software product.

The Software Product was an excellent product for small systems, but not applicable to Large complicated CRUD systems with hundreds or thousands users. 
By design, it was not Scalable.

The process of the product assimilation is a long process: studying, building a Pilot, experimenting and building simple applications. Only afterwards CRUD type applications were developed.
Usage of these CRUD applications was gradual i.e. in the beginning the application was implemented with limited number of users.

Only those who deployed CRUD applications with hundreds of users experienced the consequences of the Scalability limitations.    

Those who failed used a kind of Wisdom of the Crowd. They asked for their colleagues opinion. They received positive feedback because their colleages' implementations were still in early stages therefore they chose this Strategic Product.

My approach was different: I read Analyst's Research Notes and discovered the inherent Scalability limitations. I also looked for feedback from USA Early Adopters. 
As expected, all early Adopters failed in implementing large scale applications. 
It was easy to recommend to consider other alternatives. 


Factor 2: Unique Characteristics

When a problem includes unique characteristics, many people will ignore them and try to solve it using the same approach they would use for standard similar problems. 

Wisdom of the Crowd approach data, will support a wrong intuitive solution pointed by most people surveyed.  

Factor 2: The Monty Hall Dilemma

The Monty Hall problem in the Let's Make a Deal TV game is a classic example. 

The Monty Hall Problem. Source: Wikipedia

A participant choses one door. Goats are behind two doors and a new car behind the third. He gets what he had chosen. However, before checking the door he had chosen, the game host opens another door discovering a goat behind it.

The participant can change is mind and pick the third door instead of the door which had been chosen.

Intuitively, people conclude, that the probability that the car is behind the original door chosen is 0.5. Many participants do not bother to change the door had been chosen. Wrong conclusion: It is a Bayes's theorem probability, therefore the probability of a car behind the third door is approximately 0.67. 

most of the votes, using Wisdom of the Crowd, will assign equal probabilities to a car behind the first and a car behind the third door. These votes support wrong decision. 

Factor 2: Information Technology example
This example is also old one: more than a decade ago. 

A client (An Enterprise) asked me to help him in choosing an Operating System, for migrating or developing his most crucial application.

I have to recommend UNIX or proprietary Operating System. 

As in most cases, there were constraints.
The following constraints were applicable to this task:

1. Short Time for implementing the application -Completing the System development beyond the schedule was impossible.

2. The vendor which should provide the Server and Operating System was predefined.

3. I had to finish the task in two days. 

During this time frame I had to find data, read data, meet the local distributor's experts and the IT department people responsible for the application.

In addition, an ongoing process of choosing the Strategic Operating system was not completed. I was the leading advocate of UNIX. Others support proprietary Operating Systems.  

Factor 2: Information Technology example Recommendation
When I discussed the issue with the vendor's experts and read the vendor's papers, I discovered that most (not to say all), users world wide facing the same decision selected UNIX. 

There were hundreds of Enterprises which preferred UNIX. No evidence of enterprises choosing the proprietary Operating System was available.

It was easy for me to conform to the Wisdom of the Crowd and chose UNIX. Choosing UNIX, would also support the UNIX agenda, I advocated for the enterprise.

I recommended usage of the proprietary Operating System.
My paper included the evidence that most of the other Enterprises selected UNIX.

It also describe the uniqueness of my client's enterprise supporting selection of the proprietary Operating System.

Factor 2: Information Technology example unique characteristics
The unique characteristics  were limited UNIX knowledge and experience, as well as a lot of knowledge and experience in the proprietary environment. Coupling the knowledge (propriety) and the lack of knowledge (UNIX) with the System importance and schedule constraint, will result in high Risk UNIX implementation.

The risk of deploying the application after schedule, in a relatively good scenario, and of failing to deploy it appropriately, in a less optimistic scenario, supported non-UNIX implementation recommendation.

Summary
It is easy to find other examples in Information Technology, as well as in other fields (as I did in my Hebrew post) in which usage of Wisdom of the Crowd could cause  wrong decisions.

You can not count on the crowd, when there is strong Social Conformity.
If their are Unique characteristics, the crowd may ignore them and will recommend a wrong decision.

Even if you ask many people and few of them will perceive the uniqueness and recommend the right solution, the Wisdom of the Crowd data gatherer could reach a wrong conclusion, by preferring the majority opinion.   
    

Will Business and IT Aligned?

For decades we are talking about closing the gap between business and IT, but the gap is still as wide as it was.
In the beginning of the ERP era, we focused on aligning Business Processes and Core Systems, but in most enterprises we failed.

SOA was the next alignment promise: defining the SOA Services in Business boundaries instead of Technical boundaries, should narrow the gap. However, despite of SOA Business Value (Agility and Reuse) in most enterprises, the large Business-IT Gap remained as large as it was. 

The IT Community aimed at the next alignment attempt: SOA is technical and BPM is its Business related complement. 

Will the current BPM based alignment attempt succeed? I do not know, but Nick Heath's article  titled: Stop doing what the vendors tell you, CIOs told, published in Tech Republic, suggests that the root of the problem is not Technological.  

Stop Doing What the vendors Tell You
Nick Heath's article is based on Gartner's CIOs survey. Gartner surveyed more than 2,000 CIOs about their plans for the coming year.Heath's  summary of the survey result is: "The problem with CIOs is they don't appear to share the singular focus of their organization. In general, Corporate IT strategies are largely unchangeable and loaded with generic  statements about cost and service levels."

In other words: 
1. IT priorities are not in accordance with Strategic Business priorities.
2. IT Strategies are inflexible and static. The CIOs do not change strategies when the Business is adapting to changes.     

My Take
It is not because of SOA or BPM or ERP that Business and IT Alignment is not improving. 
The reasons are closely related to perception:
How IT professionals evalute their department's  contribution to their Corporate Business (They think that they contribute a lot) vs. the way Business professionals perceived their Enterprise IT  (You can not do Business with them and you can not do Business without them, Inflexible, not aligned with Corporate Goals and Missions).

The Gap could be narrowed, if and only if,  IT professionals and Business people views of the other team DNA and Role will be changed. 

The Risk of Consumerization and Could Computing
Consumerization may reduce IT and CIOs responsibilities and budgets, because users could bring their Own  Devices and Software.

Cloud Computing could also narrow IT scope, because non-IT managers can buy IT services and systems directly from Cloud Vendors.

The risk is Chaos or loosing Control of IT Systems. 

IT Vendors and CIOs
Gartner's recommendation to CIOs, as described by Nick Heath, is not new: IT Vendors could shift IT goals away from the Corporate goals and strategies.

Few years ago I wrote few posts on possible Vendors conflict of interests e.g. 
SOA VDS – AmberPoint Example, ESB for an Orphan.
  
CIOs not stop always from doing what the vendors tell them, but they should understand when it is proper to act according to a vendor recommendation and when it is not.

Vendors Survival: Apple no longer a shining star?

On July, 2011 I wrote a post titled: 

Vendors Survival: Will Apple Survive until 2021?. 

Many people thought that the question I asked is irrelevant: Apple was never more successful. Not everyone of them is so sure today. 

Apple's position was changed. The graph above derived from Yahoo! Finance page depicts the change: Apple's stock is going down in the last 6 months. 

I could use a three months graph instead of a 6 months graph, which could show more dramatic change, but I thought that it is not correct to use so short term graph. 

The red line compares Google's stock to Apple's stock. No similar trend is depicted in Google's stock.  

What was changed since 2011?

Apple is less successful than before. It looks like the company lost Mind Share: it is not so cool and is no longer perceived as the innovative company.

"Sic transit gloria mundi" is a Latin proverb saying that glory will not last for ever.

One of the Risks mentioned in my 2011 post, was less Innovation ("Who can guarantee that Apple will not become less innovative company in the future?" ).

Apple of today is less Innovative, or at list perceived as less Innovative company than it was.

Bottom Line

Extrapolation of the current negative trend  as indicator of Apple's future could be wrong. As I already mentioned in my 2011 post, Apple is a Mountains Train: it may resolve its current challenges and grow or it may not.

Vendors Survival: Will HP Survive Until 2018? - Revisited

When HP intended to acquire EDS in 2008, I wrote a post titled: Vendors Survival: Will HP Survive Until 2018? - HP's EDS First Take. 
The prefix implies that the post was not the only post about Vendors Survival. Other posts discuss future survival of other vendors such as Microsoft, Apple, Google, SUN and EMC. 

The optimistic view was that HP will become a co-leader of the Outsourcing market together with IBM (The market leader). The idea was to get more revenues from the profitable Service market, because Hardware commoditization reduced Hardware profitability.
  
However, my opinion was, that the optimistic view was less realistic than other scenarios. 
It looks like my prediction was not far from reality.

HP Layoffs in 2012
On May, 23 2012, HP announced that it is cutting 27,000 jobs after posting a profit decline of 31%in the second quarter of 2012. Many of the jobs cut where former EDS employees. 

The Case of General Motors (GM)
On November 2012, HP agreed to transfer 3,000 of its employees to GM. GM is moving its IT services in house instead of Outsourcing to EDS, which is Outsourcing to HP after EDS acquisition by HP.
Outsourcing was EDS main Line of Business. 

GM was a unique EDS Outsourcing client. 
It is one of the largest clients, but the EDS tight relations with GM  were not based on size only. 

The company which was founded by Ross Perot, was acquired on 1984 by one of its clients. The client was GM.  In 1996 it was spunned off as an independent company.

I worked together with EDS in a large project they executed for one of my clients. 
many of their examples and Best Practices were based on GM projects. 

My conclusion is that loosing GM Outsourcing is a stamp of the failure of EDS acquisition by HP.

Final Notes
1. It is impossible to separate the EDS acquisition from HP management practices. For example, If it would not profit less on the second quarter of 2012, it may cut less jobs or not cut jobs at all.

2. Changes in Outsourcing market trends also influence the EDS deal consequences. Cloud Computing influences Outsourcing negatively. 
The giant Indian Outsources prices are lower than HP's prices. 

3. Outsourcing deals face new challenges due to the frequent Business and Technological changes. Adaptation of the Service-level Agreements to changes, including pricing adaptation, could be a barrier to Win-Win Outsourcing deals.

4. Will HP survive until 2021? The probability that it survive is still high, but I am less optimistic than I was on 2008. 

BPMS Next Generation: IBPMS

In a previous post I discussed Business Process Management (BPM) evolution as reflected by an Ovum report. 
Recently I read new Gartner BPM Magic Quadrant. The Magic Quadrant is titled IBPMS Magic Quadrant.
If you compare it to previous Gartner BPMS Magic Quadrants (you should not compare them), you will find a totally different picture. 

Only three Leaders in the IBPMS Magic Quadrant, namely: IBM, PegaSystems and Appian. No Challengers and a lot of Visionaries I know (Oracle, Software AG, Tibco, Vitria) and two Visionaries I never heard of (Bosch Software Innovations, Whitestein). 

Previous BPMS Magic Quadrant includes many Leaders, many Challengers as well as many Visionaries.

The pattern of few Leaders, No Challengers and many Visionaries is typical to immature markets.
Gartner explains it as a new generation of BPMS tools.

What differentiate IBPMS from BPMS?
IBPMS tools try to address a new Use Case: Intelligent  Business Operations(IBO). IBO is required for better and faster decisions in a dynamic ever changing enterprise. 

The implication of the IBO Scenario is convergence (or at list tighter binding) of BPM with other paradigms and technologies. The word Intelligent included in the IBO acronym implies that Business Intelligence (BI) is one of the related technologies. SOA which was already coupled with BPM is more connected to BPM in the context of IBPMS. Complex Event Processing, Service Orchestration, ESBs and Registries are SOA and EDA concepts and technologies, which are closely related to IBPMS implementation.


MY Take

• I already read and wrote about IBO. Few months ago I wrote a new Business Intelligence Kit to be included in the next version of MethodA. I met this concept while drilling down BI. Gartner's Magic Quadrant starting point was BPMS.    

• Gartner's view of a new generation of BPMS is different from Ovum's gradual evolution approach. However, you can find the same Vendors as Leaders (Gartner) or Shortlist (Ovum): Appian, PegaSystems and IBM. Ovum's Shortlist also  includes Oracle. Probably PegaSystems's, Appian's and IBM's products are currently better products than other products. 

• Product selection is specific to an Enterprise. Enterprises differ in Size, Use Cases, Technological Infrastructure, Applications Technologies etc. Sometimes a Niche product or Visionary product and not a leading product is the best fit for an Enterprise.

• Expect changes in an Immature markets like IBPMS. Today Leaders will not necessarily be tomorrow (2013 or 2014) leaders. 

• Not all BPMS products are created equal. Gartner divides them to two major categories: Pure BPMS Products (e.g. Appian, PegaSystems and Bosch Software Innovations) and Infrastructure Products including BPMS (e.g. IBM, Oracle, Software AG and Tibco). 

• IBPMS and Case Management There are similarities between IBPMS and Case Management but they address different Use Cases. Case Management and IBPMS converge between BPM and other concepts and technologies. However, Case Management is for Knowledge Workers and IBPMS is usually for Managers tasks (sometimes it is also for Knowledge Workers). Some of the technologies included in Case Management such as Knowledge Management and Enterprise Content Management are not integral part of IBPMS.                                  

BPM market Growing Rapidly but still Maturing and changing

Why SOA is implemented by more enterprises than BPM? 
SOA is an Architecture, so an enterprise may use an Architecture or not. 
Many Enterprises without any architecture, begin their SOA initiative, when SOA was only Hype and buzzword. Other Enterprises followed when it matured. Some realized measurable SOA benefits. 
Unfortunately, many of them executed it wrongly, and therefore their SOA benefits were limited or even non-existent. 

Managing Business Processes is not an option it is a must. Therefore Enterprises managed their Processes manually or by usage of code embedded in Systems' Business Logic Layer.

It is difficult to convince them to change their Process Management practices by implementing BPM.
The company's management team may use the slogan: If it is not broken do not fix it.  

The significant value of BPM is not Business Process Automation. It is Business Process Change or Improvement or Flexibility.
In order to change a Business Process, usually you need to automate it before changing it. Therefore BPM benefits are Long Term benefits.

It is more difficult to convince managers to spend resources when the predicted Return on Investment and the predicted benefits are Long Term.

SOA is already a Mainstream architecture, while BPM is still a rapidly growing and evolving market in 2011 and 2012. 
According to Ovum's Research Note, published in December 2011 "BPM is a rapidly growing  market and high double digit revenues growth figures are very common among leading vendors profiled in this report". 

I recommend reading the full report written by Somak Roy and titled:Decision matrix: Selecting a Business Process Management Vendor. 

In this post, I will discuss a limited number of topics appearing in that report.

The Vendors
Ovum view is that there are twelve leading vendors. Ovum divides them to the following categories:

1. Shortlist: Appian, IBM, Oracle and Pegasystems

2. Consider: Tibco,Cordys, Active Endpoints, Newgen, AuraPortal 

3. Explore: SAP, EMC, Bonitasoft

There are new vendors in the list, replacing vendors appearing in previous similar Research Note.  The change of the leaders list could be a sign of limited maturity of the BPM market. 

Case Management  
According to Ovum, Case Management is a major Focus area for most vendors.
It is not surprising. Vendors solutions, as well as BPM implementations, begin with handling automated Processes (SOA Processes). The next phase is adressing Human Processes and finally the less structured Processes, i.e. Case Management Processes, are the focus area.

SaaS  
BPM is not the best fit for SaaS. BPM Engine infrastructure requirements are limited. Usually, BPM implementations invoke Systems and/or Services and the amount of code and data in them is minimal.
The main issue is Business Alignment, which has nothing to do with Cloud Computing. 
Ovum believes that Cloud Computing will not be the dominant delivery model.

Social Software Concepts
Social is trendy, so it is possible to find Social concepts in most of the BPM products. However, currently they are important mainly in Case Management context.

Open Source
Bonitasoft is the only Open Source vendor included in Ovum list. Intalio, the Open Source BPM traditional leader is not included. According to Ovum, most vendors did not mentioned it as a competitor.
If Ovum's view will be verified by other sources, then the emergence of a new Open Source BPM leader could be an indication of BPM immaturity. 
   

MY Take

• The question: Which BPMS Vendors were not included in Ovum's analysis? is as interesting as listing and comparing the twelve vendors included. I was surprised that Software AG was not included. I usually find it among the Leaders in Gartner's Magic Quadrant and in Forrester's BPMS Wave.

I was not surprised at all that Microsoft was not included. Traditionally, Microsft's BPM products are limited. However, Ovum did not include any of Microsoft's major BPMs partners, namely OpenText (acquired Metastorm and Global 360), K2 and Agile Point.

• Cloud based BPM could be a major deleivery model

I agree with Ovum view that SaaS delivery model is more adequate to CRM or HR applications than to BPM. However, SaaS Delivery model is a natural choice for Enterprises which use the SaaS delivery model for the majority of their systems (SMBs for the following years 5 years). 

• Not all BPMs products were created equal

Some of the BPMs products included by Ovum and some of the BPMs products not included are Niche products. 

For some use cases they will be better fit than the Leaders or Shortlist vendors in Ovum terminology.

For example, Active Endpoints's ActiveVOS suite is excellent solution for Straight-through Processes. 

Fujitsu's Interstage could be a good fit for large enterprises especially in the Japanese market.

Even SAP's BPM suite is mostly used in Enterprises deploying SAP's ERP.