Hosted Business Process Management Eases Adoption Curve

July 12, 2004

Hosted applications are nothing new. Application Service Providers (ASPs) made their meteoric rise (and crashing fall) in the late 1990s, as an offshoot of the Internet Boom. The premise was to provide enterprises with the full features and functionalities of applications such as customer relationship management, sales force automation, and supply chain, without the overhead of having to install, manage, and upgrade the solutions. Not everyone bought the idea that you could successfully outsource some of your most business-critical applications, and with the Internet crash of the early 2000s, the ASP market felt the hit.
Since that time, ASPs have existed under the radar, still bringing value to many organizations-just a bit more quietly. Hosted applications can be particularly attractive in situations where an organization does not want to invest large amounts of money or resources to get a solution up and running, but instead is willing to pay an incremental per-user or per-connection charge. While hosted applications typically are not as ideal for solutions that will require extensive integration with existing applications, they nevertheless can integrate to existing resources and add value for markets such as workflow or business process management (BPM), where the initial investments for a solution can be prohibitive for smaller companies.
For example, Nsite, a provider of outsourced workflow and business process management (BPM) solutions that provides software to mid-market companies in a service delivery model. Nsite’s first customers in 2001, primarily in the high tech and semiconductor market, are still using the solution today to route processes throughout their organizations, and in some cases, to suppliers and partners.
The model is simple: customers pick which of Nsite’s pre-existing business processes they want to use (e.g. exception handling for non-standard pricing), and then Nsite activates the customer’s unique web site where they can see those processes. Nsite also allows customers to use their own forms, which may be converted to HTML or simply attached as files for use on Nsite. The client is an existing web browser, and three levels of security protect the applications. For customers that don’t need to customize a process, they can be up and running literally in minutes.
Nsite claims that all of its customers are fully deployed and trained in less than thirty days. The solution utilizes email for notification, and users only have to log into the web site to start a new process or make changes to existing processes.
Upside Uptake
Having covered the rise (and fall) of the ASP in the early 2000 time frame, Upside Research was intrigued by the premise that Nsite brings to the table – instant workflow and BPM without any of the hassles of enterprise applications. Nsite is targeted at the mid-market, and their ideal customer often starts with a departmental process, and then expands to include other departments, additional processes, and in several cases, inter-enterprise processes. We believe this market is much easier to penetrate than some of the enterprise sales that many BPM players are courting today. Because the solution is billed monthly, and can be turned on or off with minimal impact to the enterprise IT infrastructure, companies have a lower risk threshold than with more traditional software implementations.
The ideal type of application that Nsite works with is a process that requires human interaction/response at multiple points, and little or no back-end integration. For example, running a purchase requisition around the company for approval can be solved by simply completing an HTML requisition form on the Nsite portal, and then choosing the list of people it needs to be routed to for approval.
Nsite positions itself as complementary to existing BPM and ERP solutions, and Upside Research believes this is a good position to take. The solution cannot replace the heavy lifting process management and multi-system integration that traditional pure-play BPM vendors such as Metastorm, Fuego, and Pegasystems handle, but it can provide an easy fix to many of the manual processes that companies face each day. More importantly, while Upside Research doesn’t see any other BPM vendors jumping to provide hosted BPM models immediately, we do expect a number of vendors to continue to develop new versions of their solutions that lower the adoption criteria (if only for specific solution areas) and make it more consumable for business managers and users. From this perspective, Nsite makes a nice measuring stick.
Nsite’s success indicates that the BPM market is spreading out to include more of the fringe types of markets, and Upside Research expects there to be additional neighboring markets that will incorporate BPM functionality over the next year. While this will add even more players to the market, it also brings with it further awareness and will lead to more widespread adoption. BPM for the masses? Perhaps it’s closer than we thought.

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