Delivering Business Processes from the Cloud

We’re at the beginning of this world of hybrid clouds where companies large and small are able to leverage the different cloud models to knit together services with both routine and innovative process environments. The future evolution of many interesting business process services can be characterized as belonging to three different areas:

Commodity business process services: These services are common to most businesses and are technically mature. They include services such as e-mail, accounting, and payment services. Although critical to the operations of most businesses, they’re not a differentiator. They simply are business requirements. Some commodity services can be quite complex, such as sophisticated accounting process systems.

Specialized business process services: These services make a huge difference in the way a company competes. They could be specialized services, such as one used for molecular modeling or predictive analytics. These tend to be highly complex services to build and manage. Also, most companies won’t necessarily need them or have the infrastructure to support them on an ongoing basis.

Foundational building process services: In some situations, organizations need to customize business processes in unique ways. This is where products to create business process workflows come in. With this type of capability, companies can use templates and best practices from a cloud-based provider to create sophisticated linkages between business partners. This capability requires sophisticated underlying middleware that can broker between services and manage the data between services.

Business processes destined for the cloud

Some applications that embody business processes are inevitably destined for the cloud because of their high number of users and their ease of use in a cloud context.

These applications form two groups:

Existing applications that are migrating to the cloud. The cloud makes the most sense for these established applications (for example, e-mail).

New applications that are taking off in the cloud faster than they are through the use of software installed in data centers, or where use of a data center isn’t available. For example, a service that analyzes data from MRI scans in remote applications can provide incredible value in remote locations. Sophisticated collaboration applications can provide a complex process management environment that would be too expensive for a small- or medium-sized business.

Hidden in the cloud

If you haven’t had much contact with web businesses, you may not know that nearly all their important business processes are run from the cloud, often at low cost. For example, unless you run a very large website, the web statistics software you use is most likely provided by Google. Your e-mail system likely runs on your web server, which itself is probably hosted by an Internet service provider (ISP). If you carry ads on your website, you’re probably using an ad server of some kind, which, again, doesn’t run out of your offices. Selling ads to fill the available space on your site is probably outsourced to an advertising broker.

Your website is probably running on software built by someone else with various software modules provided by yet another company. The photographs displayed on your website may well be sourced from another website, and even some of the content may be sourced from content syndication operations.

It’s easy to come up with a list of the business processes and applications that will, as a general rule, be run from the cloud in the future. A few organizations will run such applications themselves, for reasons of security or possibly technology integration, but most will not because of the cost.

Business processes already flying high

Many processes sold as on-premises productivity applications will become standard cloud environments. However, this transition will not happen overnight. Companies that make a living selling office software may be reluctant to move to a cloud model. In addition, an important market will remain for sophisticated consumers who deal with very sophisticated processes and will need the process on-premises. So, for now, hybrid business process environments will be the norm. Here is a list of business processes that are already available from the cloud:

Clerical activity: Office software such as word processing, spreadsheets, and so on

Communications: Unified communications, e-mail, Instant Messaging (IM), voice, conferencing

Collaboration: Desktop-to-desktop capabilities, from webinars to collaborative work and file sharing

Data backup and disaster recovery: The ability to store information in a cloud service for both immediate retrieval and to protect against the loss of a system

Payment technology: PayPal, credit cards, voucher schemes, and so on

Research: Including marketing research, technical research, patent research, and almost all other areas of research

Website work: Design, content, advertising, and SEO

You could add many others to this list — for example, the businesses of insurance, banking, package delivery, and travel and hotel booking. You might not think of these businesses as cloud services, but by any reasonable definition, they are.

Predicting the future

BPaaS is one of the fundamental services that’s not only changing cloud computing, but also the way some innovative businesses operate today and the way most companies will operate in the future. The value of BPaaS becomes a foundational element of the hybrid cloud model where companies will be expected to link services from their own operations with services from partners, customers, and suppliers.

The foundation of this future state means that these service components must be based on well-designed and model business processes. They must be logical constructs based on how business is conducted, and they must follow business guidelines. Therefore, BPaaS will have to include concrete governance and policy requirements within the structure of that service that is configurable by business management.

One of the best ways to understand what’s coming in the future is to look at how some successful born-on-the-web companies operate. Many of these companies have the persona of very large companies with complex and well- designed processes that can be scaled according to demand. These companies assume from their inception that they will build complex customer-facing process management environments using cloud-based models.

Even when web-based businesses are large, many of their business processes are assembled by linking software together, often in a way that’s no more sophisticated than simply linking to it from a Web page. Imagine a company that sells a sophisticated pedometer, such as Fitbit, which offers a device that tracks a person’s everyday steps, stairs climbed, and calories burned, and automatically syncs that data with a data measurement dashboard. The company has developed sophisticated analytical tools that measure both the steps people take and how their activity compares to others in their age range and at a specific activity level.

The company has a sophisticated distribution model that includes an online sales model and direct sales through retail (say, Best Buy) and online stores like Amazon.com. It, therefore, has to create a sophisticated business process model to link its various distribution partners and keep track of business partners that link to its Application Programming Interfaces.

To attract new customers and ensure that its customer base continues to grow, it must leverage social media and search engine optimization.

Now, try to envisage other businesses running in this way. It’s not that hard to do, because the vast majority of small to medium businesses do only one or two unique things — and that means most of their business processes are common, mundane, and a good fit for cloud computing.