One of the first things to consider is what business problem you trying to solve with your BPM application.

1. If it is mostly a system integration problem - then you'll need to make sure the BPM application can access and interface with the systems needed. If those are mostly internal systems then access restrictions could be an issue when trying to use a cloud based BPMS. If you need to access external systems, then an on-premise BPM application could have trouble accessing information outside the firewall. 2. If it is a human centric BPM application then you need to make sure that the application has access to docuements and people related to the BPM application. A cloud based BPM application allows people to access the application no matter where they are, but may have a harder time accessing an internal document repository. Of course, if you are part of a completely cloud based organization (including your document repository) that won't be an issue. For an on premise BPM application - vice-versa.

I believe the key to answering this question relies on your connectivity to the Cloud. If you have a dedicated connection configured between the host organization and Cloud provider, the primary differences will be around deployment, management and scale of the BPM solution since it will effectively look like a BPM solution running behind the firewall. If the BPM solution moves outside the firewall in the Cloud, then there's a host of issues that need to be addressed, that may result in an internally deployed BPM solution being a more effective solution. Things become unnecessarily complex with the introduction of the Cloud. The key elements that need to be evaluated are, how am I billed for usage and what happens in the event that the host is unavailable. This latter question needs to be answered even if your own data center is hosting the BPM (or any) solution. The Cloud is about 2 things: cost and elasticity. They are not mutually exclusive, but typically users tend to want one or the other.

Good insights and discussions so far. One key area we have not discussed yet which I believe needs to be taken into account right up front is process ownership, support and management. If an enterprise decides to use a cloud BPM platform to deliver a portion of a business process or the entire business process, who has responsibility if an issue occurs? From a business perspective, this is a critical area of planning that must be addressed up front when looking at using a cloud BPM platform or even integrating a cloud Business Process Outsourcer (BPO) with internal business systems. Management and ownership must be clearly defined and communicated between the cloud provider and the enterprise. What if a process transaction doesnt complete or completes incorrectly, who gets involved and how can we get to the root

cause of the problem if it crosses enterprise-cloud service provider boundaries? What about the points of integration between systems and data managed by the cloud provider and systems or data managed by the enterprise? It is at those points of integration and hand-offs that finger-pointing ? is likely to occur. What if the use of the BPM platform by the enterprise starts to exceed the threshold of the level of service agreed to by the BPM cloud provider? Who manages the re-negotiation inside the enterprise and can the enterprise explicitly track all points of consumption of the BPM platform by different constituencies inside the enterprise so that consumption can be managed?

These issues are difficult to manage inside an enterprise and become even more challenging and critical to explicitly define, apply contracts and manage when dealing with cloud services for BPM or otherwise.

I think enterprises must put the time, thinking and best practices in place around consumption governance and management, usage monitoring and rating and transaction and business activity management and monitoring when considering using cloud services for areas such as BPM. Consumer-provider management is needed both on the side of the enterprise and on the side of the cloud BPM service provider to make this model work beyond the pilot test for driving meaningful business process activity at an enterprise level.

BPM applications in the cloud will likely be multi-enterprise process applications, implementing collaboration contracts between multiple parties, automating the value chains sustaining these collaboration schemes, and ensuring that SLAs are fulfilled between the collaborating partners. Typical processes candidates for cloud operation include the SEPA SDD rule book processes in the financial payment domain, the VMI/CPFR processes in the supply chain domain, and the RosettaNet PIPs in the electronic equipment eco-system industry.