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BAM against the world

• By Tony Baer
• February 1, 2004

Many organizations credit the use of Business Intelligence (BI) solutions for their survival and, in some cases, their success in recent years. BI tools have allowed many organizations to utilize information assets already in place to more effectively run businesses. Such efforts to gain access to gobs of information at reasonable costs explains the appeal of emerging tools like enterprise scorecards and dashboards that can deliver the kinds of performance reports that are well understood at the corporate board level. Thus technology suppliers are searching mightily for next-generation BI technology.

Not surprisingly, as executives clamor to get more information faster, the enthusiasm of the technology community toward the next big BI tools technology has been palpable. For instance, Gartner Inc. analyst Roy Schulte, a longtime champion of pushing technology to create tools that can provide real-time data to workers, describes the emerging Business Activity Monitoring (or BAM) tools as “the killer application for app integration.” (See http://www.adtmag.com/ article.asp?id=8382.)

Is BAM truly the next “killer app”? Who knows. Business Activity Monitoring has plenty of competition for that coveted designation. While BAM solutions can provide scorecards of business performance, a similar kind of solution, Business Performance Management (BPM), can add closed-loop functionality such as budget planning and forecasting to the mix. Also competing for the title is a totally different kind of BPM called Business Process Management. More about that variety of BPM later on in this column.

Let’s start with the performance management flavor of BPM. In a recent survey of 145 companies, consulting firm BPM Partners found -- surprise, surprise -- that BPM solutions are becoming popular. Seventy percent of survey respondents reported that their organizations are in various stages of implementing BPM. Now here’s the shocker -- coming from a firm with “BPM” in its name -- the survey found respondents judging BPM solutions as more relevant than BAM dashboards or portals for meeting their needs.

Resolved: Business Performance Measurement is gaining critical mass attention, and companies believe that such tools can offer real benefit.

So what’s the deal with that other kind of BPM that covers Process Management? To make things more complicated, there are two kinds of process BPM. First, there’s the high-concept BPM that implies the kind of end-to-end internal process reengineering that many organizations likely utilized while implementing ERP systems. And then there is the “lite” version, which allows companies to rationalize routine workflows and provide simpler ways to complete those workflows when the information must come from one or more systems. Put another way, the latter can be described as tactical BPM that allows for the development of simpler front ends to applications that are involved in the workflows.

Now here’s the kicker: While both flavors of BPM refer to completely different solutions that are designed to solve completely different problems, in some cases you might need to implement both solutions to derive any real benefit because there isn’t much good that can come from only measuring consistently dismal business performance.

Let’s say that your company has a problem with profit margins. A BPM dashboard could reduce those assumptions down to cold hard figures and, if a dashboard were used, could regularly show meters moving into the negative red area when measuring factors such as costs or revenues. In some cases, you might have the ability to drill down into a business intelligence application that might provide some insight as to why those numbers are getting worse. And in most cases, bad processes are at the heart of the problem.

For instance, the call center might not always have access to the most up-to-date product or pricing information, or the procurement team might not have adequate access to current supplier information to take advantage of the best deals. In these cases, you might need a BPM lite solution to, at minimum, make an SAP screen less intimidating to a call-center representative or to blend information from SAP, procurement and supply- chain systems to provide corporate buyers with the big picture so they know when to negotiate deals with suppliers and which suppliers are offering the best terms.

At the risk of tripping over ourselves here, implementing performance and process management BPM implies that there is ready access to information from all source systems -- whatever they are. Otherwise, a scorecard or process management solution that is superimposed on, for example, an SAP system will provide only an SAP view of the world, which may not be a complete view. Consequently, that requires some form of integration solution, framework or architecture — the use of multiple solutions.

The moral is not just that the technology industry loves to snow customers with proliferating buzzwords and acronyms to sell more software. Instead, the reason that all this confusion exists is that there has never been -- and never will be -- a single silver bullet solution for complex business problems.