Thursday, April 18, 2024

Business Intelligence and BPM: Merging?

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Every now and then something happens in tech that poses a real
head-scratching moment. Such a moment arose when Tibco moved to acquire
Spotfire, a provider of visual analytics and business intelligence software.

What would an integration software vendor — Tibco (Quote) — want with a provider of software that helps business
managers make more important decisions?

Answer: more intelligent business process capabilities.

Tibco’s move is the
starting point of what some high-tech analysts have been predicting for the
last few years: Business process management (BPM) (define) and
business intelligence (BI) are becoming increasingly intertwined.

Forrester Research analyst Boris Evelson, who covers BI, said the purchase
is the first transaction that will merge a pure-play middleware vendor with
a pure-play BI vendor.

There are a number of reasons for a merger of such technologies.

Business managers rely on BI software to provide graphical reports about
business processes. For example, a report might let managers know how their
sales professionals performed in a specific region. Or BI might
automatically alert business managers to depletions in a supply
chain. In short, BI greatly influences business processes by giving managers
salient data to make informed decisions.

BPM software, which is expected to lead the next generation of distributed computing, choreographs multiple business processes and enables disparate technologies
employed in a distributed computer network to work together.

For example, BPM software includes graphical editors that let developers
document business processes, such as the shipping of products in a supply
chain. BPM might also include simulation tools to run a process, such as
calculating a repayment plan for a loan, many times to measure its average
time and cost.

believe combining BI with BPM — kept separate and siloed — will provide a
more natural, dynamic computing environment.

While BI is a more mature, multi-billion-dollar market comprised of Business
Objects (Quote), Cognos (Quote) and others, BPM
has taken on greater importance with the move toward service-oriented
architecture (SOA) (define) and Web 2.0 computing.

BPM frontrunners include IBM (Quote), BEA Systems (Quote), Tibco (Quote), Software AG and smaller,
second-tier players. Oracle (Quote) offers both BPM and BI
through its Fusion Middleware strategy, but the company hasn’t technically
intertwined the two yet.

Evelson said in his blog one of the reasons for such a marriage is that businesses
can no longer stay competitive just by squeezing more efficiencies from
operational applications such as BPM; they need the smarts BI applications
can provide.

“For example, while workflow and rules are used to efficiently process a
customer credit application, business intelligence analytics are needed to
effectively segment customer population and extend the credit offer to a
much more targeted customer segment for a better response,
cross-sell/up-sell ratios,” Evelson said.

Given the importance of meshing smarts with processes, you would think that
the BPM and BI trains would have pulled in to the station at the same time.
Not so, said Evelson’s colleague, Forrester analyst Connie Moore.

“I think the BI vendors are missing the boat on process,” Moore told “They don’t really understand
process because they focus on analysis of data. Operational data, tactical
data, strategic data; the data needs to be put into action. The BI vendors
don’t understand the whole process world.”

This failure to grasp process may be why standalone BI vendors such as
Business Objects, Cognos or MicroStrategy can be such good acquisition
targets for BPM providers.

Moore said BPM vendors are increasingly realizing they need to improve their
business processes, rules and event management with greater intelligence or
analytics capabilities. Lacking the patience or technical wherewithal to
build such technologies themselves, BPM vendors may have to buy them and
integrate them.

“As BPM goes beyond process, some BPM vendors are cleverly adding
integration with collaboration, portals and BI,” Moore said. “I really
believe that BPM is evolving into a bigger market, and BI vendors are at risk
at missing a giant trend. Now Tibco buys Spotfire and it’s just a matter of
time before those [other BI] vendors get bought.”

Ventana Research founder Mark Smith was less sanguine about the convergence
of BI and BPM, noting that while BPM software has value, most corporations
weren’t built on business processes.

“The challenge with process management is that it makes good common
business sense, but most corporations aren’t designed or managed by process,
right?” Smith said. “It’s not because they’re doing the wrong thing, it’s
because companies aren’t mature enough to manage their business by process.”

Smith wants to know where the evidence is that the market for BPM software,
estimated by researcher IDC to top $1 billion just two years ago, is picking up.

Sure, there have been several acquisitions in the BPM space — Oracle bought
Collaxa, BEA nabbed
Fuego and Sofware AG recently targeted
webMethods — but Smith wants to know what fruits these buys have borne.

“The reality is, I haven’t seen anyone hitting a homerun selling BPM
systems,” Smith said. “But I think there is a lot of potential around
applying analytics to BPM is important to get more intelligence around
processes, activities and events.”

And the BPM market certainly has some momentum. Cordys, of The Netherlands,
recently set up shop on U.S. soil and ingested
an $80 million round of funding to help further its fortunes in North
America, where it has been scarcely competitive. It must be upgraded season
for BPM because
Progress, Savvion, MetaStorm and Lombardi have all enhanced their platforms.

But is the BPM market going to subsume the standalone BI market?

“It is not going to subsume the BI marketplace — there are different sets of
buyers and requirements,” Smith said. “BPM vendors have to deal with a
‘hurry up and wait’ market and prove themselves by finding companies willing to
adopt it.

Yet Forrester’s Evelson remains convinced that Tibco-Spotfire is not a
one-off deal.

“While this was a relatively small transaction, I am predicting/hoping that
there will be a more impactful move next, potentially coming from BEA
acquiring a larger BI vendor,” Evelson wrote on his blog.

BEA Executive Vice President and CTO Rob Levy refused to comment on the
acquisition speculation. He does, however, see value in sprinkling BI in the
BPM mix, eventually creating a new software category.

“I think with SOA, we’re going to see a new type of BI,” Levy said. “Let’s
call it dynamic event-based BI, where the information is running through the
system in real time, processed through the BPM engine, analyzed in some sort
of event-processing business engine activity where it correlates an
inference and creates an event out of that.”

This article was first published on To read the full article, click here.

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