Pei Huang: Please introduce the status of BPM application globally and in Asia & Pacific.
Rashid Khan: BPM is a new idea in China, but in many ways, it is a new idea, new concept and new technology throughout the world. I can't really say that China and Asia& Pacific is very much behind the rest of the world. It is new for everybody in the world. Before the year 2000 or 2001, very few people know about BPM, it was usually described as workflow automation. the collapse of .COM in 2001, companies invested a lot of money in ERP, CRM, and financial solutions. They then discovered, "look, we have to use some new solutions to automate certain functions. We have CRM solutions, which are already automated, but we have to serve our customers by the processes across the different applications and departments." They really need some ways to automate the processes. That's why BPM became common in 2002 and 2003 and it became a very strong technology,? There is a lot of analysis on BPM done by Gartner and Forrester and some other research companies in North America and in Europe.
We have seen tremendous growth in all industries, not only in manufacturing, but also in defense sectors, automotive, high-tech, and legal area, you name it. Still there is confusion about what is really BPM. But in my view, it is a very simple thing. Business Process is an asset, just like the building, machinery, people and brand. A company can be valued and measured by how effective the processes could be. An asset goes through a lifecycle.? Business process management software allows the company to manage all the process assets over the entire lifecycle. There are different roles in the companies, BPM allows the people with different roles to work on the processes as a team.

Pei: Are there any analysis data about the size of global BPM market?
Rashid: Gartner, Forrester and Butler all have their analysis data. The size of the market depends on how to define this market. Gartner reports 5 billion US dollars. Forrester reports 3 to 4 billion US dollars worldwide. Frankly, in my opinion, the market is much bigger than that. Because BPM will finally be used to organize the business processes in every country and every industry. BPM will be used to manage the business process now by handled by e-mail, by paper or whatever. It is not like the market of automotive, because you can define what a car is. You don't have any confusion about it. However, in BPM there are a lot of confusions，but the market is much bigger than that. Right now, our concern is not the market size. For a saturatated industry, such as the auto? industry, people really care about the market share, but since there are so many opportunities and challenges that we face, we are more focused on technological innovation and continuously expand our application areas.

Pei: Please briefly introduce the history and status of Ultimus.
Rashid: I used to work for a high-tech manufacturing company to help it pass the ISO9000 certification. Basically, the concept of ISO9000 is to do what you say, and say what you do. So, we should document the process and tell the employees to follow the document. For example, we can manufacture the product in certain ways, so we should document it, and make sure the workers can consistently follow the document.
After we passed the ISO9000, I discussed with my colleagues about how to help them keep following the documents, and ensure them to obey it again and again? That's the pain of mine, so I began to find some software packages to ensure it. Lotus Notes was one of them. At that time, Lotus Notes was brand new. We could not find a good software package to easily automate the processes. So, Mike Andrade and I founded Ultimus in 1994. Ultimus delivered the first version of the Ultimus Workflow Suite to the market in 1995 and growth rapidly followed, with the customer base tripling in each of the next four years. Meanwhile, most of the well-funded early workflow competitors disappeared. Ultimus had clearly made the right choices in defining a new approach to workflow.
Today, Ultimus is recognized as a leading provider of Business Process Management (BPM) and workflow automation software and services. Drawing on Ultimus' experience and philosophy, customers are using Ultimus as a platform for automating many business processes throughout their organization and across other organizations.
We have released 7 versions of BPM software. Now we are working with the next generation. We already have about 1600 customers worldwide and in different industries with different languages. We have 330 employees in 18 countries. Last year, we grew 50%. This year we will grow 35%.
Our revenue includes software, service and support. We invest a lot of effort into service right now. Most of our new employees are in service department, because it is very important for us. Software accounts for 40% in our revenue, service accounts for 40% and support is 20%. The percentage is different in different countries, because in some countries, we provide service through our partners.

Pei: How many vendors in this market?
Rashid: If you talk to Gartner, Forrester or Butler, they will say that there are more than 100 vendors. But when we compete in the market, we don't find so many vendors. The scope of BPM is so big, when people manage a process, they may consider several types of solution. For example, after I finished a document, and then I e-mail to you, and you do some work for this. This work is gone from me to you. So people think Lotus Notes is a BPM solution. And Microsoft may say that Exchange is a BPM solution. There are many vendors who have part of BPM functions, but if you classify the complete market as pure BPM players, there are only 8 to 10 vendors. On the Gartner report names" Magic Quadrant for Pure-Player BPM 2Q04", there are six in the leader quadrant, including Ultimus, FileNet, Metastorm, etc. IDS-Scheer provides a tool of enterprise modeling, which is a part of BPM. They work with the customers to understand and document or model the processes. But the customers still need to automate the process. Actually we partner and work with IDS-Scheer. So, after the customers finish the modeling, we can help them to automate the processes by our software packages.

Pei: Do you use ARIS as a modeling tool or you have your own modeling tool?
Rashid: ARIS is a very good modeling tool, but is also very complicated. If a customer already has the expertise of ARIS, they can model and optimize the processes. We have developed a XML based technology, so that we can export the process definition from ARIS, and Ultimus imports it to implement process automation, and then we can export it back to ARIS to improve it. So, it is bi-direction integration.
We have our own modeler, which is much simpler than ARIS. You can learn that in one hour. But it only automate a process, you can design a process flow, you can make the assumption of the possibility of tasks go here and there, what is the cost and what is the time, you can run the simulation, you can also figure out where is the cost, where is the time and how to automate a process. Ultimus has already integrated that solution. In fact, there are other 4 or 5 modeling tools. ARIS is the top one. ARIS is very good at managing the multiple processes and resources. We just limit our solution to one process and we assume the resources are available. ARIS do process optimization and resource optimization, but we do process automation.

Pei: What is the key difference between workflow management and BPM?
Rashid: Workflow management system really controls the flow of work from one person to another person and to an application, so, it is used to manage the information of workflow. Workflow management does not care about the optimization of the process. BPM is actually controlling the flow, and it could make the workflow move forward as planed. We have a number of tools, such as Process Designer, it could help the business people to easily create the flow and document the process. Then we have another tool called BPM Studio, which provides a collaborative environment for teams of IT designers to convert business processes into deployable solutions integrated with database, electronic forms and business rules. When the process is very complicated, one person is not enough, so different people should work together, so we offer this collaboration tool. Business and IT people could work together the same time. Then we have another web service solution called Flobots, which could help the software developers to integrate third party applications. There are many processes in different application systems in a company. For example, there are ERP, PLM, financial and many other systems in the company. These systems could be integrated through Flobots. We have another tool called Administrator, which provides the tools for the administration of business processes and handling exceptions and special situations. It can publish the process, and do version control of the process. We also have a tool called Reports, which could capture a variety of metrics from live processes using customized reports that enable process owners to manage resources and optimize business processes. In short, BPM solution provides all process control functionality and could integrate many types of application software, but workflow could not do that.

Pei: What is the main difference of Workflow Automation, EAI and BPM?
Rashid: Workflow automation is used to collaborate people to people. EAI is used to integrate system to system. The following table compares the difference between Workflow Automation and EAI.

Before 2000, 2001, Sap, Oracle, Siebel and many other application software used their own technology. It was a big challenge for the customers integrate them together. So, the EAI solution providers could offer the value for the customers. But after the XML and Web services came to market, the integration works became easier then.
The BPM system is a new product category that combines EAI and workflow automation, and then extends them into two other categories: Business Process Modeling& Analysis, and process metrics.

Pei: What's benefit of your customers using the solution of Ultimus?
Rashid: Ultimus is a stand alone BPM platform. It can integrate with many existing ERP, CRM, financial and HR systems. The biggest benefit of BPM solution like Ultimus is to reduce the time of executing process and improve accountability. For example, we have a customer in Canada, which is a real estate company. The time for them to measure the performance of employees may need 30 days with card and paper. With our software they could do it in 4 days. We have many banks customers. Their credit card application may take 3 weeks before and they reduce that to 3 or 4 days by using our solution. Microsoft is one of our customers. They use our solution to automate the process of packaging. They have to make the packaging boxes ready to release the new software. The packaging boxes have different markings and legal terms, colors, and are written in Chinese, Japanese, and German, etc. They used to send e-mail to coordinate with manufacturing and the designers of the packaging boxes, and it takes months to do so. We help them to automate over 20 processes and reduce the time greatly. In China, we also have several successful customers and help them to integrate the different application software and automate the processes. We have four methods and 12 different Flobots to integrate different systems, so, the customer can easily find the best way to integrate their application systems. We are increasing our Flobots continuously. We also offer a developing platform named EIK (Ultimus Enterprise Integration Kit), which provides developer tools and documentation to create advanced integration with back office and enterprise applications using modern technologies such as Web Services and .NET objects.

Pei: There may have some different old languages, how to be compatible with them?
Rashid: They might have some problems before, but now, web service technology is available to solve them. For example, there are many companies which are still use COBOL and other legacy systems on main frame computers. We can help them to integrate these systems via web services.

Pei: What is the relationship between BPR and BPM?
Rashid: BPR is trying to restructure a company and change the entire way of doing business, but it was not very successful, because as soon as you want to make a massive change to the company, it caused all kind of obstacles. People don't want to accept change or change so quickly. When we do BPM, people realize that they don't need to do massive changes and they even don't need to automate all the processes. We could just help them automate one or two processes and make sure it is working successfully and receive benefit, then, we can automate more processes. We could deploy BPM step by step, so, it is easier to accept.

Pei: Some software already have workflow module in their systems, what's the different responsibility of their own workflow module and BPM?
Rashid: Yes, some systems have workflow functions. For example, SAP has workflow, but it can be only used in SAP system, but BPM platform like Ultimus talks to different systems, it is running across systems. Also, the cost of paying a SAP is extremely high. You can't use SAP for all types of business processes, because it cost too much. We can automate the process cross the systems. Now, more and more software are built on SOA architecture. So, you can export the data of the process to web service. So, you can still use the internal workflow module. Ultimus can hold this service link the workflow with other applications.
On the Internet, there is a catalog of all web services called UDDI. The users could choose the web service in UDDI to find the interface they like and get the relevant code to call that web service.

Pei: What is main features and advantages of Ultimus compared with your competitors?
Rashid: We have business advantage and technical advantage. We have rich experience because we have done this business for 11 years. We have large customer base throughout the world. From product point of view, we have competitive product. For example we have Organization Chart, in which, you could define your organization structure. Our Process Designer could define a process very easily, and our Flobots could integrate many application software including Sap and Microsoft Office. One of the very important differentiator of Ultimus is that we have the technology to discover the workflow. Our customers need not to create complicated process chart with many rules and many exceptions, because that is a time consuming works. The system will discover the flow chart when a process is used and it will learn and save the rules itself. So, if the companies use our BPM Suite more and more, it will become smarter and smarter.

Pei: How does Ultimus grow in Asia and Pacific area?
Ned Smith: We have adjusted our strategy from an indirect model to a more direct model. We have had a direct presence in Japan for several years and we recently established offices in Mainland China and Taiwan in 2004 and in Australia in early 2005. We are executing a more direct model in our South East Asian markets as well. Our growth rate in A&P is increasing significantly. In Asia, we have more than 25 employees, not including software developers.

Pei: Please summarize your Chinese strategy?
Rashid: Our strategy is to localize our product and service, and also we are rapidly developing our business globally. The trade between China and other countries is growing very fast, and there is huge number of processes needed to be managed among the partners. It is a big opportunity for us to help Chinese manufacturing companies to automate the processes. China is not a very big market at this moment, it will become the biggest one some day.
Philip Chui: First, Education is important, because there is still a lot of confusion now. We have to be very patient. That is why we are offering one day free trainings in China. Second, success creates success, so, we have to create a lot of success references. Every implementation must be successful, and we will commit to use all of our resources to serve the customers and help them to be successful. Third, we will continue to build our team in China, improve their skills and grow our people.

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