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Choosing business process management: Saas BPM or on-premise BPM?

On-premises BPM has been the norm for most enterprises, but advances in cloud computing have lead to increased interest in on-demand, software as a service (SaaS) offerings. Which approach is right for your company? Ovum analysts and BPM vendors share their views.

While on-premise business process management (BPM) has been the norm for most enterprises, advances in cloud computing have lead to increased interest in on-demand, software as a service (SaaS) offerings. Which approach is right for your company? This decision involves many important factors.

The on-premise and SaaS approaches to BPM each have their own strengths and weaknesses. Generally speaking, what it comes down to is deciding how you feel about the depth of execution required, exposing data in the cloud, and collaboration.

Ovum analyst Surya Mukherjee, author of "SaaS BPM: Silencing the Skeptics," an Ovum research report, said full-service BPM suites usually comprise five basic components:

  • Process discovery and project scoping—to try to discover a process automatically
  • Process modeling and design—to engage those affected by the process and duplicate it in the software
  • Business rules—to create the rules that define business decisions based on internal and external data
  • Workflow engine—to turn process models into executable files
  • Simulation and testing—to debug the processes and prepare for implementation

The SaaS products tend to be strong in the conceptual stages of BPM. Mukherjee said process modeling and design, business rules and visualization are the most benefitted by Software as a Service. The weak points of most SaaS offerings, he said, are the workflow engine and execution capabilities.

"Up until execution, everything is at the theoretical stage where people are trying to build boxes and arrows and describe how a process went," Mukherjee said. "BPM requires a lot of interaction with every kind of enterprise data."

Executing business processes often requires access to data from sales, finance, enterprise content management servers, DRPs, data warehouses and repositories. With a multi-tenant SaaS BPM suite, security often becomes a concern here. Many IT managers are still cautious when it comes to exposing data to external services over which they have little control.

Technologically speaking, it is possible to have solid execution in the cloud. Security concerns tend to be more of an emotional reaction, Mukherjee said. In the near future, he said, working with cloud-based SaaS solutions will likely become more acceptable.

Ovum analyst Tony Baer said one of the great benefits to SaaS BPM is the elimination of the need for software deployment, but admitted that execution is indeed "another ball of beeswax." He said the on-premise offerings are much more mature, which is expected as this is where most of the market interest had historically been. He said cloud-hosted BPM is relatively new and untested but will certainly continue to grow.

"Right now we're all in this fog about the cloud," said Baer. "I do think there will be more experimentation on BPM in the cloud, especially on the process definitions side. But I think it will probably be a more deliberate march of progress when it comes to execution."

One of the greatest benefits to SaaS BPM is the depth of collaboration it offers. When modeling on-premise business processes, those involved often have to get together in the same boardroom to move forward with the project. With SaaS, those with input on a process can log in from anywhere in the world to share their thoughts. This makes for a BPM practice that is more responsive to changes in a business, Mukherjee said.

What the vendors say
Mukherjee specifically mentioned Cordys, Appian and Vitria as three vendors that have a fairly good handle on execution in a SaaS BPM product. Hans de Visser, managing director of Cordys for Benelux (Belgium, Netherlands, and Luxemburg) region, said that when the company got started in 2001 the demand was almost entirely for on-premise BPM. In recent years, however, he said there has been a shift toward SaaS. Cordys sells its offerings for both types of use.

"I think both offerings have their pros and cons," said de Visser. "Typically what we see is if there are high security demands because a company is under heavy regulations, as in defense or pharmaceuticals, there is no chance that software can be exposed outside the infrastructure that the company controls."

Manufacturing, insurance and the services sector, especially business process operations vendors, have embraced SaaS BPM more thoroughly, he said.

The company's approach to BPM execution in the cloud takes two approaches. In one, a user can expose on-premises web services to systems in the cloud. In the other, a master data management system transports data between the systems. But while modeling in the cloud has grown in popularity, de Visser said many vendors and customers have not thought enough about what it takes to do execution with distributed architectures.

Metastorm, on the other hand, is a company that has been better known as an on-premises BPM vendor, although it too has offerings on both sides. Greg Carter, vice president of product development, said the most successful SaaS-based BPM products have been what he calls "process plus content."

"These capture process models and system models and use them to create an application," said Carter. "Take that and add some content, like pre-built forms, vocabularies and processes."

The obvious example here is, which has focused on customer relationship management, he said. Carter said Metastorm itself is interested in SaaS, but believes that the on-premises model will be popular for some time to come. This is especially true in the government sector, where some organizations won't even run their IT infrastructures on the public power grid – let alone expose their data to the cloud.

"We think BPM will move effectively into the cloud in stages and we think modeling and collaboration is the first step," said Carter. "For people who are solving problems, we don't see people including SaaS-based BPM."

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