Legislation to Drive BPM Market Growth in 2004
In an effort to comply with new federal legislation governing accounting practices and securities law, businesses are turning to business process management (BPM) software to help with the transition.
Because BPM applications shepherd work items through a multistep process where they are identified and tracked as they move through each step with either specified people or applications processing the information, many businesses are relying on these applications to help them comply with the Sarbanes-Oxley Act of 2002 (SOX).
PriceWaterhouseCoopers, along with most observers, agree that SOX is the single most important piece of legislation effecting corporate governance, financial disclosure, and the practice of public accounting since the U.S. securities laws of the early 1930s were enacted.
SOX compliance efforts are expected to drive growth of the BPM market by 15 percent to 20 percent in 2004, according to a new study by market researcher Meta Group.
Although the 2003 the growth rate of the BPM market was also 10 percent to 15 percent over 2002 (to nearly $1.1 billion), this fell short of what most BPM vendors had expected for the year.
The business drivers for the BPM market in 2003 were, primarily, more penetration of planning and budgeting solutions, not compliance-driven sales, according to John van Decker, vice president of Meta Group's technology research services.
Van Decker says businesses that were primarily involved in activities for the assessment of internal controls in 2003 are now looking to optimize controls, and will look to BPM for improved visibility, compliance dashboards, alerts/notification tools, and planning.
The Meta Group study shows that within the next 18 months 85 percent of firms will work on a BPM project.
According to the study, a large number of these BPM projects will include moving to suite solutions to provide a closed-loop lifecycle approach that includes metrics, reporting, and planning.