Saturday, October 31, 2015

Traditional Business Process Management solutions: Dead End or Reinvention?

Ford assembly line, 1913
Source: Wikipedia

Are traditional BPM solutions still relevant or new approach is a must? I am not the only one who asks the question above.

According to Gartner's analyst, Janet Hill, Traditional BPM is the past and "Improvisational Process" is the future. "Improvisational Process" is less structured and more Agile than Traditional BPM. Traditional BPM aims at more Automation and Process improvement and kills Innovation.   

Let us try to answer the question above. In order to understand the issue I will use an analogy between Software Development and BPM Software Development.

First stage: Automation
The Typical Software developed in the 1950s automated simple organizational tasks. For example, instead of calculating profits by adding data manually, the data was entered into the computer and a programed calculation routine was executed. 

Another simple example is a report. Instead of writing it manually, including data and calculations such as summing numbers the report was built and printed by software executed.

The main goal was Automation. The Business functions were coded and could be executed each time on different set of Data.

The first generation of Work flow applications and afterwards BPM applications is very similar to the first Software stage.  

The Business Processes were represented by Software.  
The goal was Automation of as much as possible tasks and sub-processes.

The software developed 50 or 60 years ago was developed from scratch.

BPM applications were developed as a layer above existing software, therefore the lack of Visibility challenge characterized BPM systems and was irrelevant to old software systems developed from scratch.   

Second stage: Improvement
Information Technology systems functionality could be enhanced easier than manual systems functionality. Functionality improvements were the next step of the IT systems.

Ease of extensions is applicable to BPM systems, as well, therefore processes improvements followed processes cloning to IT systems. 

A Business user who can see the representation of a process on a screen could think of process improvements and sometimes could even simulate them.

Next and current stages of IT systems: Complexity
The focus of this post is the future of BPM and not step by step evolution of IT systems, therefore many stages of IT systems evolution are encapsulated in a single paragraph.  

The improved IT Systems was extended gradually until they were large Monolithic systems or Silo systems. 
The main problems of Monolithic Systems are: 
difficulty of maintenance,  development takes too long time and difficulty of Integration with other systems.

Systems and Data Integration was a must and is more important in a Connected World, due to PCs, Internet and emerging Channels, Technologies and Platforms such as Smart Phones, Internet of Things, Big Data and Wearables

Handling IT Systems Complexity
Agility is the key for Coping with Complexity.

1. Handling Complexity  by dividing the Systems and/or smaller Systems entities to Components 
The Components could be Reused and their boundaries are well defined.

The following Technologies and Architectures are examples of dividing large IT entities to smaller Components.  

Object Oriented Development (composed of Classes and Objects, Inheritance and Methods), Components Based Development (CBD) which is based on Components and Components Reuse, Service Oriented Architecture composing an Enterprise or a Virtual Enterprise from SOA Services and Micro Services, a new approach of developing an application as a suite of small Services. 

2. Shortening Development time
Quicker development is complementing systems division to composable component.
The unrealistic ideal is assembling pre built  components to systems without developing any new components.

Agile Development and RAD (Rapid Application Development) are more sensible approaches for shortening systems Development time.

Next and current stages of BPM: Complexity
The analogy between IT Systems development and maintenance and BPM systems development and maintenance is not perfect, however Complexity characterized these two systems types.

BPM should handle the whole life cycle of Processes, as well as More complex Use Cases such as Case Management Processes and Intelligent Business Operations.

Previous posts described the new Use Cases and the growing Complexity.
For example, read the following posts: 
Case Management - The missing topic in STKI Summit 2011 

BPMS Next Generation:IBPMS

IBPMS updated Vendors Positioning

Unstructured Processes, whose flow is by Knowledge Workers decisions, are the focus of many BPM initiatives.  
Developing and maintaining such processes is beyond traditional BPM software capabilities.  

Handling BPM Complexity

1. Shortening Development time
Shortening Times to Deployment of BPM is crucial, so the term Agility is often used when BPM is discussed.

In a post titled: BPM Agility is a Must, I argued that Agile methodologies could used for developing BPM applications. 

Appian, an IBPMS and Case Management leader advocates the Agile approach as well. It emphasize its Unified BPM App Platform  
which includes User Experience as part of it in order to shorten the development time. 

2. A Data First Approach  
MicroPact's approach is Data before Processes. 
MicroPact is a Case Management vendor. After the Data Model is completed the Processes are defined. According to the company, Data First is more easily understood by Business users, so larger number of users are involved and most users involved are involved with no need for special training. 
The result could be more rapid adoption and iterative deployment.  

3. Case Management Frameworks
Case Management Frameworks is a new growing subset of the Case Management market.
the Framework is composed of Layers. The top layer, Implementation Specific Logic, is the dynamic part. The Vertical Business domain and The Horizontal Business domain are less dynamic, as well as other lower layers .

If this approach is good enough for an organization, it could shorten Time to Deployment and reduce maintenance costs. For more information, read the post: Case Management Frameworks: A growing subset of the Case Management market

Concluding Remark
IT systems Complexity is growing. In order to cope with it the systems architecture should be based on Components and the Development Cycle  should be shortened.

BPM systems Complexity is growing similar to IT systems Complexity.

Traditional BPM solutions are no longer adequate for development of the new unstructured Case Management processes. According to Gartner's analyst, Janet Hill, new software should address those new "Improvisational Process" and the traditional BPM software "kills Innovation".
Innovation and not Automation is the goal of current BPM implementations.

The image of Ford assembly line from 1913, in the beginning of this post is a reminder: Innovation is not necessarily based on software. 
The innovative assembly line process saved a lot of time, money and efforts in car assembling.
No BPM software was available to support Innovation.

However, as the processes become more complex (unstructured Case Management Processes including Knowledge Workers decisions based on a lot of data and other people's opinions) it is more difficult to innovate without adequate software usage.     



    

Thursday, October 15, 2015

Vendors Survival: Will Dell Survive until 2025?









More than six years ago I wrote a post titled: Vendors Survival: Will EMC Survive until 2018? 

The trigger for writing that post was an article by Jason Hiner, the Editor in Chief of Zdnet. According to Hiner "EMC, the world’s leading storage vendor, is flush with cash and has the opportunity to make a big move".

Hiner thought of two possible big moves:

1. Dell and EMC merge i.e EMC would buy Dell

2. Cisco buys VMware

I thought that the two moves suggested by Hiner will not be realized in 2009. 

AS far as EMC Survival was concerned, I thought that the keys for the company's survival until 2018 are keeping its leadership in the Storage market and adapting to Cloud Computing. 

I do not know if Cisco will acquire VMware, but on October, 12, 2015, Dell announced a deal with MSD and Silver Lake to buy EMC for 67 billion USD in Cash and stock.  VMware owned partially (80%) by EMC is excluded from the deal.
The deal is the largest Information Technology acquisition ever.

On 2015 EMC is no longer "flush with cash". Elliott  Management Corporation took last year a 2.2% stake in EMC and urged it to review breaking up, which immediately raised possibility of sale.  

The following paragraphs are my First Take of the proposed acquisition.

EMC since 2009
EMC is still a Storage Market Leader owning about 20% market share. In my 2009 post I wrote: "The Storage Market is changing and storage vendors should innovate in order to keep their current position or even improve it". 

I am not sure that EMC the innovative Storage vendor of the eighties beating the Mainframe Storage Market Leaders such as IBM, is still an innovative company.  

Read the article "IDC says server-based storage sales are soaring – and Dell's pwning the market"
 in The Register.   

The chart titled: "Worldwide Total Disk Storage Systems Market Top 5 Vendors Q1 2014 -Q2 2015 (shares  based in revenues)" reveals the following trends:

1. The competition is increasing. "Others" market share is larger than any Leading Vendor share.

2. EMC is still the Leader, but its market share is gradually declining ( its market share in Q2 2015 is larger than its market share in Q1 2015).

3. The other leaders are: IBM, Netapp, HP and Dell.

4. Dell's market share is growing slowly but in terms of total storage shipped is number 1: "Dell is, and remains, number 1 in total storage capacity shipped terms, looking at both external and internal storage. We understand Dell shipped 3.6 exabytes of data, more than NetApp, IBM and Hitachi combined (3.05 EB). EMC shipped 2.56 EB.

VMware
Why does Elliott  Management Corporation "urged EMC to review breaking up", i.e separating the  
VMware business from the Storage Business, and probably selling its 80% share in VMware?

VMware is no longer a Leader with no competition in The Virtualization Market. The Virtualization market is also crowded and "Now Elliott appears to be arguing that keeping VMware aligned with EMC not the most profitable option" 

Dell
Michael Dell is back leading the third largest Enterprise IT company. IBM and HP are still larger than Dell-EMC combined together.

Dell company was a PC market leader, which extended its product lines to Enterprise Hardware, such as Server and Storage due to the PC market challenges.
Latter the company added Software Products Line to its Hardware.
For example it acquired boomy. Dell Boomy is a Leader in the Cloud Integration Market

For the last two years Dell is no longer a public company. It is a private company and therefore its financial and business details are not publicly available. 

Will Dell Survive until 2025?
Large companies such as DEC and SUN did not, but many other survived. Large companies do not disappear suddenly, so Dell may Survive. However, it has multi challenges and I am not sure it will Survive. 

Major challenges

1. Merges of Large companies are difficult
The issues include different Corporate Cultures, overlapping Business Lines (e.g EMC Storage and Dell Storage), Layoffs, unifying Organizational Business Processes and Information Technology Systems and Architectures etc.

A good example of a similar challenge is the acquisition of Compaq by Dell's competitor HP. The acquisition of EDS by HP is not similar, but some of the issues may be similar.

Read my posts about HP's acquisitions and my recent post about splitting HP to two companies:

Vendors Survival: Will HP Survive until 2018? - HP's EDS Acquisition First Take

Vendors Survival: Will HP Survive until 2018? - Revisited

Vendors Survival: Will HP Survive until 2025? - is not a question to be asked anymore

2. The IT market is changing
The Information Technology market is no more an Enterprise based market. It is more and more Consumer Centered market based on Internet, Clouds, Smart phones and Pablets. 

New market implies new technologies e.g Social and Professionals networks and Smart phones Applications. 

New market Leaders, such as Google, Facebook and Apple emerge and former Market Leaders face new Challenges.

Dell a traditional Enterprise and PC vendor has challenges. Other traditional technologies based companies such as IBM, HP, Microsoft and Oracle has to cope with challenges as well. 


3. The Financial perspective
MSD and Silver Lake are Investments companies. These companies will pay some of the large amount of money required for EMC's acquisition.
According to some of the Web sources I read, high percentage of the payment will be by loans. Dell will have to return the loans.

Could Dell return the loans? It is not clear yet if it will be able to return the loans. 
If it could and would what will be the downside of returning it instead of Business Development? 

4. Competition
IBM and HP are Dell's major competitors. Oracle (SUN's Hardware), Netapp and other Storage Vendors are competitors as well.

They will continue to develop their products, to market and sale their products and to develop new innovative products.

Could struggling Dell (because of the merging process with EMC) develop, sale and market its product like its competitors who do not have to allocate resources to a merge with another giant company? I do not know, but i am very skeptical. 

5. The Servers Market
According to few Internet articles, the trend of better Servers usage is another threat to Servers vendors including Dell. The usage of Cloud Computing and Operating Systems Virtualization are the major enablers of Servers usage efficiency. Read the next paragraph in order to understand why my opinion is different from these experts' opinion.

My Take
The conclusion that improved usage of Servers resources will reduce Server's Capacity is simplistic view.

The major trends of the Servers market are (I marked in red trends reducing Servers Capacity and in green trends augmenting Servers Capacity:

1. Operating Systems Virtualization
 Multiple Operating Systems instances sharing the same Server reduce the total Servers Capacity.
For example, single instance of Operating System on a Server could use sometimes  20% or 30% of the CPU power. 
Multiple Instances could use 70% of the CPU power or even higher percent.    

2. Cloud Computing
Large Data Centers sharing Workloads of multiple organizations are more efficient than dedicated Data Centers. They use Operating Systems Virtualization as well.
Many SMBs will use Public Clouds. However, larger enterprises will probably implement Hybrid Clouds i.e. Private Clouds and Public Clouds. For additional information on The next Generation of Clouds read my post: The Next Generation of Private Clouds

The bottom line is that Public Clouds will save Server's resources. 
Probably many Private Clouds will save resources as well, but due to lower expertise and smaller size, Private Clouds would save less resources than Public Clouds.


3. Natural Capacity growth
The Server Resources of most customer of mine, as well as other organizations I know about, grew systematically. The frequent growth rate was two digits growth per year e.g. 10%, 20% or even 30%. The Capacity growth rate could be declined because of Cloud usage, but other factors drive more rapid growth rate.  

4. New Enterprises
New Enterprises have to use Servers' resources. The emergence of new enterprises, as well as high growth rate of current enterprises' servers resources is more frequent in Developing Countries.  

5.  New applications
New Applications consume Servers resources. For example Social Applications, Analytic Applications, Case Management, Consumers Applications etc.

6. Rapid Data growth Rate
More data implies more processing in addition to more Storage usage. Big Data and new Analytical Applications consume a large amount of Servers resources. The need to integrate data placed in varied locations and varied data formats augments the servers resources required for Big Data applications.

The prevalent usage of more complex data formats, such as videos and pictures requires more server's resources. 

7. Smart Phones and Pablets
Did the emergence of PCs and the Client/Server architecture reduced Server's resources requirements?
The answer to this question is no. On the contrary, offloading of application and data to PCs augmented Server's resources requirement. 

Smart Phones and Pablets are a new generation of very similar architecture.
Applications are offloaded to the Smart Phones and the integration to the Back end Servers, usually Cloud based servers, is via Internet. 

Expect that usage of new and sophisticated Smart Phone application will augment Server's resources requirements, similar to the growth of resources in the Client/Server architecture.


8. The same computing power costs less and less 
The last bullet is not marked in green and not marked in red.

It is another issue which is not directly related to Server Capacity consumption, but it could have negative influence on vendors' revenues. 
   

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