Tier One Leads in BPM Adoption

Fortune 1000 companies will continue to lead the way in BPM adoption for three reasons. First, they have the budgets to support the large-scale implementation and integration efforts that fully realized BPM solutions require. When filtering the data for only enterprises that allocated more than $100 million to IT in 2003, a full quarter of respondents report analytics budgets of greater than $10 million.

Second, after years of investment in large-scale analytics projects, these enterprises have the mature analytics infrastructures that can support the complex BPM requirements.

Third, tier-one companies, most of which are publicly held, have the greatest need to achieve regulatory compliance. Indeed, companies with more than $1 billion in revenues have the highest expectations for being in limited cross-functional implementations in 18 months. Interestingly, we have seen in related research that some savvy executives are drawing on lessons learned while managing Y2K projects.

These executives use the goal of meeting the looming Sarbanes-Oxley compliance deadlines to push BPM initiatives and other strategic upgrades to the analytics infrastructure that might not otherwise be authorized in uncertain economic times.

Next Phases of BPM

META Group expects that over time, the concept of managing business performance through a "closed loop" of planning, reporting, and action will extend throughout the enterprise. Leading businesses are already beginning to incorporate a variety of functions into the original financially based management activities.

CRM was most frequently cited as the next activity to be incorporated into BPM efforts (see exhibit 8). These intentions reflect the heavy investment in CRM over the past couple of years and the desire to correlate CRM analytics data with enterprise planning for more accurate revenue budgeting and sales/promotions/operations expense controls. Almost three-quarters of respondents indicated that their firms have integrated or plan on integrating customer-oriented analytics into BPM solutions over the next two years.

Human resources is the next most cited area for BPM. The intention to include HR in BPM efforts is consistent with the need to drive expenses around payroll, benefits, and employee-related functions, such as training, from real-cost drivers including headcounts, as well as link compensation with financial and organizational performance.

Despite the publicity surrounding the accounting scandals at Enron, WorldCom, and other large enterprises, and the increasingly strict regulatory environment, "regulatory disclosure" and "investor relations" were considered less critical than the transactional and speed-of-business issues.

META Group expects the inclusion of these areas in BPM to rise in importance as compliance deadlines for regulations such as Sarbanes-Oxley draw near.