Spending on BPM to grow significantly in 2011

BANGALORE, INDIA: Spending on business process management (BPM) projects will increase significantly in 2011, according to a global survey by Gartner, Inc.

Overall, respondents were optimistic about spending plans, with 54 per cent planning a spending increase of 5 per cent or more and almost 20 per cent planning an increase of more than 10 per cent during 2011.

“Many of these budget increases are driven by the fact that BPM is focused on improving business outcomes and explicitly meets the objectives of many organisations' return-to-growth strategies,” said Teresa Jones, principal research analyst at Gartner.

“However, there is a mismatch between what users think they will achieve from BPM and what they actually achieve. Understanding the real benefits and how to measure them will help organisations create better business cases and get the expected business results,” he added. 

In Asia/Pacific, respondents expected strong increases in BPM spending, with 25 per cent of respondents indicating that spending growth was likely to exceed 10 per cent. “Many countries in Asia/Pacific are exhibiting strong economic growth, which correlates well with increased IT spending generally,” said Jones.

“In addition, BPM technologies can be used to create highly flexible business applications, which are often needed to support rapidly growing businesses,” she added.

According to Gartner, the market is changing as organizations look at software as a service (SaaS) subscriptions to tools which can offer a lower-cost starting point. In addition, BPM project funding comes not from an IT budget but from the line of business budget in 66 per cent of cases, and because BPM is focused on business outcomes, many business units are funding it more readily than they are IT-specific projects.

Responses differed significantly worldwide regarding the average initial investment in a BPM project within their organizations. Overall, the most common initial investment was between $100,000 and $200,000, which is low in comparison with many BPM suite (BPMS) implementation projects. Asia/Pacific respondents tended to have even lower initial project values, with nearly 35 per cent spending between $50,000 and $100,000. These findings reflect the lower prices usually charged by software vendors in Asia/Pacific, as well as the lower cost of external services.

“The survey findings indicate that users might want some BPM software capabilities but not necessarily a full blown BPMS,” said Jones. “Many organisations do not aim to achieve full process automation throughout their enterprise; most people improve process by process.”

Gartner conducted a primary research survey of nearly 600 mid-to-large end user organizations across 14 countries worldwide in the third quarter of 2010. The objective of the survey was to understand adoption patterns, preferences and investment plans related to BPM.