Much has been said and written about business performance management, or, as Gartner calls it, corporate performance management. Whether you refer to BPM or CPM (or, as Meta Group calls it, enterprise performance management, or EPM), the commonality among analysts and commentators with regard to this business/technology wave is that they have hyped it out of all proportion.
This in itself is hardly surprising. Every time a new revenue-generating opportunity presents itself, everyone seeks to jump on the bandwagon. And BPM/CPM/EPM (I`ll refer only to BPM hereafter for the sake of brevity and clarity) is one of those opportunities, driven as it is by demand and opportunism.
The hype, unfortunately, has blurred the lines with regard to what BPM actually is, and what it isn`t. And, as this new discipline permeates throughout business across the world, it is becoming clear what BPM is, what its key drivers are, and what we should be looking for.
While some companies are understanding the need for enterprise-wide BPM, and are asking the right questions in this regard - and they should be lauded for proactively embracing this technology-enabled business wave - many others enter it in line with functional or line-of-business requirements, seeking to address points of corporate pain.
Typically, the pain points are in such areas as modelling, budgeting, planning, the balanced scorecard, activity-based management and financial consolidation. BPM addresses each of these, and more, in a strategic and holistic manner, and companies which are embarking on these activities - and there are dozens of them in SA - are in effect laying a foundation for BPM.
The hype, unfortunately, has blurred the lines with regard to what BPM actually is, and what it isn`t.
CEO, GBI
There are five pillars supporting the BPM model:
* Methodology: This looks at and includes the methods for driving performance, including balanced scorecard, economic value-add, activity-based costing, Six Sigma, and more. BPM delivers best when it is integrated into the business at this strategic level.
* Business processes: From the methodology flow the business processes, which work best and are most successful when documented and codified. These embrace management-related processes, budgeting and planning, strategy formulation and financial consolidation. It is here that we see the value of strategically driven BPM, off the basis of a methodology. For instance, through decomposing business processes down to their most granular level, management can come to understand the drivers of cost and revenue. This approach, typically known as activity-based costing, or ABC, allows businesses to redefine and hone their processes in such a way as to arrive at the most profitable way of running the business.
* Metrics: This is the traditional business intelligence component of BPM. Through understanding the key drivers in the business, and executing all of BPM against a single, multidimensional database, companies can both leverage their investment in business intelligence and ensure that data and processes operate off one unquestioned view of the truth.
* Enterprise intelligence: With all key business processes now being informed by and feeding into a single view of the truth, a company can truly be said to have created an intelligent central nervous system. This becomes pervasive and ubiquitous and percolates throughout the business. It becomes the standard way of doing business.
* Compliance: Regulatory compliance has become a key driver for business process enhancement and change. The demands of such regulatory issues as King II, Basel II, Sarbanes-Oxley, the triple bottom line and IAS 2005 are consuming the attention and bandwidth of executives locally and worldwide. Many people view these compliance requirements as punitive and excessive; however, if they are approached in the right spirit, they can be embraced as enablers of major business improvement. Weaving the compliance requirements and reporting into the day-to-day functioning of the business, and aligning compliance with the fundamentals of the organisation`s BPM cycle will logically and inevitably result in a better, more strategic business.
These are the five pillars of BPM, and any company that is considering an investment in this critical new business wave should consider each one carefully.
* Marc Scheepbouwer is CEO of GBI, the business intelligence division of Global Technology.
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