Cordys, a Dutch company that specializes in selling business process management software, has raised $80M in financing in what appears to be the largest single investment in a private company in this area. It is backed by Jan Baan, a controversial entrepreneur who was forced to leave his previous company under a cloud of questionable financial practices.
The company also informed VentureBeat that it had established a San Jose headquarters.
Argonaut Private Equity led with $67 million of the financing, and was joined by the Vanenburg Group, which contributed the rest, and which has supported the company with more than $100 million in previous backing since 2001.
The company was founded by Baan, who has a strong track record of backing companies driving change in enterprise software. After founding Baan Software, an initially successful enterprise resource planning company, he backed Top-Tier, an Internet portal company (acquired by SAP), and WebEx, a web conferencing company (acquired by Cisco).
However, after concern about aggressive accounting practices and news that unusual ties to his separate investment company were used to inflate Baan Software’s revenue, that company stumbled. Baan himself was forced to leave the company in the late 1990s. After first giving SAP a run for its money, Baan Software’s sales tanked, and it was eventually sold to Britain’s Invensys in 2000.
Baan started Cordys in 2001, and is chairman. Cordys is going after a market that is estimated by Gartner to reach $1 billion this year, and which could reach $2.6 billion by 2011.
Cordys says it is different from competing offerings because it tries harder to reduce the technical complexities of business process management software (known as BPMS) for business people. The company says its software is built from the ground up with a service-oriented architecture and seeks to bridge the gap between business and IT teams by using an intuitive web browser interface leveraging AJAX.
Here’s a blog on the BPMS market.
Also, below are examples of specific enterprises using BPMS technologies. In many cases, they are automating tedious manual systems like POs, customer service, etc. These were presented by Gartner analyst Michele Cantara at their BPM conference in February, and comes from the blog above.
–American Home Shield talked about using BPM to help them double in size and to capture and drive compliance with best practices.
–Symetra Financial talked about eliminating paper processes to improve customer service with less errors and shorter cycle time. It talked about the change of address process requiring someone to pull a paper file, make the changes, capture the before and after screen images, and then return the file.
–Symetra had huge results – 20% increase in productivity per underwriter, 30% increase in productivity per case manager, increased job satisfaction, processing time reduced by 4 days, 67% more volume without increasing staff, increased compliance, and reduced training time by using foolproof processes.
–Symetra had some good lessons learned / CSFs – work with a pilot team which for them was newer employees that weren’t stuck in the old process, advertise to the users about the benefits (e.g., “No more papercuts”), talk to lots of vendor references, and do a proof-of-concept.
–SanDisk talked about their implementation focused on A/P. Their PO processes were too manual making authorization enforcement difficult and international paper approval processes ridiculous (e.g., paper “evaporation”).
–SanDisk did a 16 week implementation but smartly added on 2 months of piloting and UAT. They reduced cycle time from 3 weeks to 1 week and were able to handle 80% more volume without increasing FTEs.
–SanDisk’s team is 4 people – architect, administrator, and 2 business analysts.
–SanDisk said that even though they automated the current state it opened up Pandora’s box since the users saw the power of the system and wanted to make lots of changes.
–Western Union make a great point about how they modeled the “To-Be” future state process prior to buying a tool. Once they got the tool, it identified steps that weren’t necessary because the system could fully automate things that the users just assumed had to happen manually.
–Epcor talked about their order to cash process which often required a “hero” to make it successful. They looked at custom development (5x) versus BPMS.
–Epcor was able to drive their order to cash process form 12-16 hours to 5 hours which made it easier for everyone and increased job satisfaction. The change was hardest on the heros that enjoyed saving the day in the old manual process. It talked about using BPM for clinical document capture, A/P, and appeals and grievances with great outcomes.