IBM Will Find Business Process Optimization with Acquisition of Lombardi Software
December 18, 2009

This week IBM signed a definitive agreement to acquire Lombardi Software who is one of the key independent and dedicated providers of business process management systems (BPMS). The unique element of Lombardi was their ability to help organizations gain visibility through their process models that can easily measure activities and business flows across the enterprise. The Lombardi Teamworks 7 is not your typical BPMS that focuses on process automation and execution but actually focuses on the design and management of models that are used for visibility and optimization. This essential element of Lombardi makes it more than just middleware or integration technology but essential business management software that through analytics provides some deeper insight to the actual business processes of your organization.

I have watched Lombardi for well over 7 years as they were one of the vendors I highly regarded in 2002 as having business process intelligence which was the fusion of business process management and business intelligence. Of course this concept was well ahead of its time and not as easy to understand by organizations that were confused on what needs to be done first. Do you automate and change your business processes before assessing they need to be improved in the first place? Well unfortunately most organizations made the mistake or gut-based decision to automate and focus on execution which worked out for some and for others was just an exercise of work. Due to the lack of maturity of competency of most organizations, Lombardi adjusted to the mainstream terminology on describing what they do as business process management systems that has helped them be more accepted by many organizations. At the same time the BPMS industry has been too insulated in their own industry discussions preventing them from getting break through growth like the business intelligence industry did in the last 10 years.

IBM is acquiring a robust platform called Lombardi Teamworks7 that provides the key capabilities of designing and assembling process models and their components that can be re-used across other business processes. As the BPMS software industry has matured over the last five years is that the use of a repository and storage of the sub-components of business process models that can be used to develop a range of process-centric applications. It provides the ability to develop measurements from which metrics and key process indicators can be linked to objectives are the baseline of what they call process visibility. The framework of business process scoreboards are comprised with goals and key process indicators are an essential element of the technology which can be accessed and delivered into the Teamworks Portal and also directly into Microsoft Office. For the sophisticated is that the technology can perform optimization routines and simulations across options business process options to help organizations make pinpointed improvements.

The other key technology and intellectual asset beyond the platform and capabilities is the Lombardi Blueprint that provides a foundation for teams to collaborate and maintain process documentation. This software and best practices based environment provides a centralized environment to discuss and focus and improve business processes. The blueprint environment provides methods to author logical layout of business processes along with the overall secure access to the information. This complimentary component to Teamworks7 is a significantly valuable component that I hope IBM assesses and expands to support other areas like analytic and information models.

Lombardi is not just about efficiency of business processes but more importantly is the effectiveness of them and how they can be optimized for maximal outcome to the goals and objectives. Lombardi brings a nice portfolio of customers across many industries that will help IBM gain further depth in their experience as they did with the FileNet acquisition. The timing of the acquisition is quite good for IBM who has been significantly advancing their position in the market over the last three years with acquiring and assembling much needed business tools.

It is clear from the way IBM has described and placed the acquisition of Lombardi Software that they want to position the technology as part of middleware and integration software. But Lombardi is much more than that as I have described and is actually more valuable to the overall business analytics and performance management capabilities from IBM that I recently assessed (See: “IBM Fuses New Generation of Analytics for Deeper Business Optimization”). These analytic capabilities focused on data assets are important for assessing the performance of business areas while Lombardi can assess the performance of business processes focused on activities in an organization. This is nothing new as IBM Cognos had previously engaged with Lombardi in 2006 to embed TeamWorks into the Cognos product line right before IBM came to acquire Cognos.

At the same time the competitive market environment for BPMS has been changing with many of the providers transforming to bring their capabilities into the cloud computing (See: “Vitria Provides Business Process Management in the Cloud”) and deepen their focus into the use of events for driving deeper visibility into the operations of business (See: “Operational Intelligence Requires Complex Event Processing (CEP)”). This is also important to compete against Oracle, SAP and Tibco who are major players in the BPMS market. These changes come at an inflection that business processes require business involvement but also be integrated across the enterprise set of existing applications and systems. This has been the challenge for BPMS that must span across many areas of the organizations from people to technology while providing the information about the processes necessary for finding methods for improvement.

For existing Lombardi customers they will need to hold on and leverage their current release as the transformation into IBM will slow down new releases as they have to do what is called ‘Blue Wash’ to adjust the technology into the IBM environment. As well the integration into other IBM middleware will expand beyond what is currently done and will require some deeper work by Lombardi and IBM to get accomplished in 2010. For those looking for BPMS, IBM plans to be a major supplier in this area and compliment their IBM WebSphere and integration technologies further into the enterprise with Lombardi. IBM is a professional when it comes to acquisitions and everyone should expect the transformation of Lombardi into IBM to be done efficiently with probably few hiccups. My concern is that the software would probably have been better as part of the business intelligence and performance management division of IBM that recently expanded into analytics with acquisition of SPSS (See: “IBM Boldly Elevates Analytics with Acquisition of SPSS”) and optimization managed in a different division of IBM Software. Let’s hope they cross pollinate and get the Cognos and Lombardi team working more closely together quickly as it is there where the value of business process optimization using analytics and performance management can provide business the greatest value.

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Regards,

Mark Smith – CEO & EVP Research


 

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