One of the most interesting an under-analyzed aspects of Jim Snabe’s latest book on the theory and practice of BPM (Business Process Management: The SAP Roadmap, http://www.sap-press.com/product.cfm?account=&product=H2977) is the observation about the scope of automation in the enterprise. In chapter, the book explains that of all the processes in an enterprise, 80 percent are not automated. Of the 20 percent that are, Snabe and his co-authors (Ann Rosenberg, Charles Moeller, Mark Scavillo), suggest that only 20 percent of those are differentiating, or core, using the framework provided by Geoffrey Moore’s core and context analysis. The rest of the processes are what Moore would categorize as context, meaning that they don’t provide competitive advantage in themselves.
So put another way, the 80 percent of the processes in an enterprise are not automated, meaning they must be performed in some manual way using the fundamental building blocks of collaboration, such as phone calls, email, spreadsheets, documents, presentations, and so on. We all intuitively sense that this is true, as evidenced by a running joke in many companies large companies: What technology do we use to run the company? (pregnant pause) PowerPoint.
In this analysts view, the significance of this 80 percent of unstructured and un-automated work is that, at some point in the near future, SAP’s integrated story about BPM, SOA, and Value Scenarios will have to be extended to include more unstructured collaboration.
Let me take you through my reasoning. If we put everything on the same scale, Snabe and his co-authors are saying that in most companies 4 percent of the processes are automated and core, 16 percent are automated and context, and 80 percent of the processes are not automated at all. We can’t really confidently categorize them as core or context, although it is likely that the percentage of core processes are probably much smaller than the context.
Value Scenarios as Bowling Pins
Let’s now turn to what is happening with Value Scenarios. SAP is justly proud of itself for the multi-faceted achievement of creating Business Suite 7. The separation of functionality by boundaries defined by ERP, CRM, SCM, PLM, HCM have been obliterated by providing access to chunks of data and functionality through Enterprise Services, SAP’s productized incarnation of SOA. Value Scenarios automate end to end processes that automate processes of urgent concern. In other words, they build on the flexibility of Business Suite 7 to fill white space.
SAP NetWeaver BPM, Business Rules, and a host of supporting technology allows value scenarios to be extended and adapted by orchestrating services. One of the main ways that the power of SOA and BPM will being put to use is in the extension of Value Scenarios to meet specific needs.
I think of Value Scenarios using the Geoffrey Moore idea of bowling pins. Moore’s Crossing the Chasm analysis points out that most technology companies first establish a product as a powerful toolkit that is sold to early adopter and innovators. But to reach a much wider audience, the early and late majority, the company must show their technology solves specific problems of urgency to the business buyers. Moore calls these niche applications of a general purpose toolkit bowling pins. Moore’s advice to technology companies is that you sell bowling pins to the risk averse early majority are lot differently than you sell toolkits to innovators and early adopters.
The way of technology is that the bowling pins of the last era become the platforms of the next era. Remember that SAP R/3 was a bowling pin in that it was envisioned as a solution for medium-sized companies. It turned out to be useful for a lot more than that. Then CRM, SCM, PLM, HCM all were created as bowling pins or collections of bowling pins in their own right, until they were consolidated into what has become Business Suite7.
Value Scenarios are this year’s model of bowling pins. SAP has carefully planned and worked for years to create the current situation in which SOA and BPM make it easier than ever to assemble and extend support for automating processes that use data and functionality of Business Suite 7. SAP has changed its product management organization and the way it goes to market to focus on the identification and productization of Value Scenarios. With the technology and application platform in place, what SAP for some time has been calling the business process platform, now the key skill becomes design, not technical design, but the design (or perhaps discovery) of business processes that will provide a boost if they are automated and optimized. The success of Value Scenarios rests on SAP’s ability to correctly choose the most important processes, automate them, and packaged them up as Value Scenarios. In other words, it must be a hugely exciting time to be a solution manager in SAP.
Extending Value Scenarios
So, what’s the next step? In two words, collaboration and search. Two projects I recently undertook made this clear. While working with the brain trust from SAP and Accenture on a recently published paper (BPM Technology Taxonomy, http://www.sap.com/community/showdetail.epx?ItemID=17407) that set forth a taxonomy of BPM-related technology it occurred to me that there was a continuum of processes and technology from the most unstructured to the most structured as shown in this graphic:
While this graphic breaks things down into three categories, in reality, the boundaries are very hard to define. The less structured act of assembling widgets on a web page or a dashboard bleeds into the act of creating a mashup which bleeds into more advanced and structured process design using BPMN and other such techniques. Technology for unstructured process automation includes blogs for collecting and broadcasting ideas, wikis for shared content creation and capturing knowledge, instant messaging for real time collaboration and so on.
In addition, I just finished helping create a book on enterprise performance management Driven to Perform that points out that process automation is generally just one of three aspects of a full view of a process. To really understand everything about a process you must not only measure the process itself but also analyze and monitor risks inherent in the process as well as adherence to compliance and control concerns. For many Value Scenarios, it is likely that risk management and compliance concerns will be baked in from the beginning.
Finally, three other companies I recently met with brought up ideas that are certain to be relevant to the design of Value Scenarios. Dale Skeen, CTO of Vitria, has introduced me to the idea of operational intelligence, the notion that Business Intelligence, BPM, and Business Activity Monitoring must be enhanced to include a much larger scope of information, both structured and unstructured, internal and external. Then, once an issue has been identified, collaboration must be able to start quickly based on the relevant data collected. The idea of folksonomies is used to allow people to refer to data an concepts in familiar terms.
Paul Sonderegger of Endeca introduced me to the idea of search applications, the advanced science of assembling relevant data precisely when needed in the context of a business process from a huge number of structured and unstructured repositories inside and outside a company.
Rene Bonvanie of Serena argued in a recent conversation that mashups are much more powerful when seen as a way to discover and partially automate processes. The typical view holds that mashups are primarily a technique for assembling data display interfaces like BI dashboards. By supporting business process mashups it is possible to provide a bit of structured support for a process that may not be supported in any way.
The Design Challenge for Value Scenarios
Now imagine you are solution manager at SAP and are in charge of finding and supporting Value Scenarios. From the bottom up, in terms of the earlier diagram, your job is clear. Find an end-to-end process that is worth automating. In the near to medium term, I’m sure SAP intends that Business Suite 7 makes this process primarily a business modeling challenge, not one that involves lots of development. The first crop of Value Scenarios fill lots of white space using established development methods approach. BPM and SOA will allow these to be adapted.
As Value Scenarios become the way things work at SAP, the challenge for solution managers will eventually become figuring out how to extend support for processes from the BPM layer into the realm of unstructured collaboration. My guess, is that before too long a second generation of Value Scenarios will appear that are empowered and extended not only by BPM and SOA, but also in ways suggested by the ideas of collaboration, operational intelligence, search applications, and business process mashups. Information relevant to risk and compliance will be brought in the Value Scenarios. The transition from structured to unstructured collaboration and back will be much smoother and more integrated that in current applications.
Of course, this discussion is more than a bit premature. SAP is just rolling out Value Scenarios and there is much to learn about how to identify and automate end-to-end processes that extend the reach of SAP to under-supported areas. But in the world of technology, we are all greedy for more. Value Scenarios will quickly move from being the new new thing to the new thing, and the expectation vacuum must be filled. My guess, is that the second generation that fills this gap will be very much like what I have just described.