Workflow: A VAR's Best Weapon Against Tight IT Budgets
By giving VARs a relatively low cost way to add value to existing applications, workflow can be used to build incremental sales in a soft economy.
If it seems like your customers are spending less, you're probably right. In a September 2002 report, analyst firm IDC downgraded its predictions regarding the worldwide opportunity for systems integration services in general. In fact, IDC predicts growth for 2002 will only be about 1.3% because of "skeptical customers and tight IT budgets." Workflow/BPM (business process management) vendors believe advances in that technology can help VARs overcome economic objections of customers, keeping VARs active at customer sites until the economy shifts. "This is not a great market for attracting new customers," comments Brian Brown, VP and general manager at Worktiviti (Cincinnati). "You have to be able to back-sell to your existing customers, and workflow is a technology that fits that strategy well." That's because workflow can be implemented around existing customer applications and deliver quick payback in many instances.
Show Customers How To Increase Efficiency Of Existing Systems
"Right now, we aren't seeing a lot of new enterprise purchases," notes Brown. "VARs have to enter an organization with software that will drive existing applications, and a workflow layer draws more value from existing applications. A company might have an outdated ERP [enterprise resource planning] system, for example, but because of the high cost of replacement, they'll live with it. But they still need to improve their business process and can justify the cost of a solution that will extend the life of that application."
"By adding to existing applications, there are a lot more opportunities to sell," agrees Ken Reich, VP of workflow at AXS One (Rutherford, NJ). "There are services a VAR can offer around workflow products. When an integrator has knowledge of how work actually flows through an organization, he could also be able to offer some expertise about re-engineering processes to make the system more efficient."
Helping end users deal with disconnected pools of data is more important than ever. The soft economic conditions encourage more mergers and acquisitions, and even customers who haven't been through that process find themselves with heterogeneous systems and need a way to link them without the costs of a full-blown EAI (enterprise application integration) initiative. "Systems integrators now have many customers who are running more than one kind of server or e-business platform," says Paula Negron, product manager at Fujitsu Software Corp. (San Jose, CA). "That means they need a workflow product that has been certified with leading application servers [e.g. BEA WebLogic or IBM WebSphere], so they don't have to get training on more than one product."
Being able to link processes between diverse applications helps customer get the most from existing data sources, and VARs must also be prepared for advances in integration technology. "You can't offer a workflow solution that doesn't touch the legacy data," advises Brown. "Workflow can't be another island of data, so it has to have a strong database model or integration capability." Integration at this level of complexity requires standards-based APIs (application programming interfaces).
Unfortunately, many of these standards are still in development, including Web services. A protocol intended to enable diverse systems to communicate openly via the Web, Web services has attracted the attention of vendors, analysts, and end users. "The more Web services are deployed, the easier it will be to grab data from diverse applications and route it through a business process," says Charlie Brett, AXS One's business development director. Brett points to some of the prolonged EAI implementations to connect big name applications, which never completely realized their goals. Web services will address issues such as long implementation times and integration complexity, assuming a standard can be reached and vendors do their part to make data available.
Negron advises VARs to be prepared for increased demand for Web services applications. This will require choosing products that can work with traditional interfaces now while supporting a future conversion to Web services. "The market for Web services isn't there yet, but it probably will be in 2003," predicts Negron. "VARs and end users need to be patient to see who will be the winner in setting standards. Hopefully next year there will be a clearer set of proven standards."
With or without Web services, workflow can enable integration between a variety of applications from ERP to forms processing. Brett believes portal integration will be one of the hottest trends. A June 2001 report from Gartner Dataquest found that, despite slower IT spending overall, the worldwide portal software market grew 59%. Many companies have implemented portals as a means to consolidate data while customizing and simplifying the end user interface. As a result, organizations are already seeing increased employee efficiency and will be willing to build on that. "A portal can become the interface for workflow," says Brett. "It allows aggregated access to various applications and data sources and supports the search of all corporate assets from a single interface. Many resellers are probably already working with a portal vendor and are experienced in the necessary integration. Workflow is just another content source."
Reduced Costs Of Implementation, Maintenance Make Workflow More Attractive
Fortunately for VARs, workflow isn't likely ever to be plug and play, but advances in workflow/BPM technology have reduced development time and maintenance costs. This decreases the end user's costs for both acquisition and total cost of ownership. "Prebuilt templates combine different types of content and are easily deployed," comments Brett. "Implementation time can be further reduced with graphical design tools that don't require a scripting language." Reduced development time also reduces the costs of business disruption associated with drawn-out implementation projects.
Graphical tools also make ongoing adjustments easier to deal with and quicker to implement. As a result, a VAR can present a solution that can be adapted quickly when workflow needs to be changed. "A business process diagram will make it easier for a system to be maintained and changed," says Negron. "For some customers, this ability to change workflow on the fly is crucial." Negron cites a Fujitsu customer that specializes in travel risk management. The ability to react quickly was one of the customer's major requirements, and that system was put to the test when it suddenly had to shift its focus from international to domestic data on September 11, 2001.
By automating processes such as exception routing or approval, workflow naturally increases employee efficiency, which can be relatively simple to assign a value to. "What has been lacking in workflow products in the past is the opportunity for human participation and collaboration," comments Negron. "This can increase efficiency and quality by fostering interaction and knowledge sharing among employees."
Of course, a solution works only if end users actually accept and use it regularly. In many cases, that means maintaining the familiarity of existing application interfaces and adding the functionality of workflow. "A good BPM product is designed to be built into an application and support dynamic business processes," says Negron. In addition to promoting acceptance, allowing users to work within the applications they know reduces training time as well.
When corporations include trusted business partners in workflow processes, they often reduce costs even further. "Many companies are starting to use workflow to integrate with business partners, such as a vendor," says Brett. For example, before approving a purchase order, a company could route the order to its supplier to make sure that the necessary components will be available at the scheduled time. Automating these processes cuts communication costs and improves efficiency.
Target Critical Issues First To Deliver Quicker Payback
In brighter economic times, customers were more likely to be impressed with a soft return on their investments, but these vendors agree that approach doesn't fly these days. Customers are not looking for just payback, they want a quick payback. As a result, Brett and Negron advise VARs to begin with small projects that address a customer's most expensive processes. "We're seeing a demand for more tactical applications for a specific problem than a need for a universal workflow hub," says Brett. "That's especially true right now because customers aren't writing large checks. Most customers are looking for something with a shorter implementation time and quick payback period, usually within a couple of months."
VARs may need to be patient and settle for smaller projects that prove their value initially. "First you'll want to do a small pilot project," Negron advises VARS. "Once you can show benefits, customers will be more likely to move on to other applications. If you address the most critical needs first, you'll build a good track record of success and win customer trust."
If IDC is right, the channel may have to hold on just a bit longer before the integration services market rebounds. The analyst firm believes the market for systems integration services will begin to turn around in mid-2003, but it expects a slow recovery. Capitalizing on workflow technology that delivers quick payback relatively inexpensively can keep VARs actively engaged with customers and on-site until they're ready to spend again.