Features
Feature
Aligned for success
Leverage BI for business performance management and attain better results.
by Nancy Williams
Executives increasingly turn to business performance management (BPM) frameworks to support fact-based decisions and improve bottom-line results. While measurement and active performance management are key ingredients for a successful BPM program, business intelligence (BI) is often overlooked. The alignment of BPM and BI initiatives is a natural next step.
By aligning, measuring and managing all aspects of the business, BPM seeks to optimize performance. Leaders in BI now pursue the same result as well. Their mission is to provide the information needed to measure and enable proactive BPM. The combination of BI with BPM ensures that information capabilities align with and support the business vision, strategy and goals. (See figure.)
Click to enlarge
BI plus BPM adds up
Few organizations that fund both BPM and BI/data warehousing efforts see these programs as related. Because BPM initiatives have their origins on the business side, performance measurement is commonly undertaken by business staff members who either use manual processes and spreadsheets or are supported by a stand-alone automated scorecard application. BI is left out of the equation.
BPM and BI are thought of as separate, unconnected initiatives for many reasons. In some cases, BI is perceived as exclusively a function of IT and BPM exclusively business. In others, business stakeholders believe it is too expensive to automate performance measurement and therefore rely on manual data collection. But in most cases, the potential contribution of BI to BPM is not recognized.
BI offers organizations committed to BPM yet another valuable tool. While BPM seeks to align all resources for peak performance, without BI, information optimization has not been achieved.
Know your limits
Without BI, organizations striving toward a mature BPM program are constrained. Key to BPM is fact-based management supported with business evaluation available through scorecards that flow vertically and horizontally across the organization. Manual approaches, however, are sorely limited in meeting this type of enterprise-level assessment. Typically, companies that use them are restricted by what they can measure.
Consider a company whose goal is to increase revenue through the acquisition and retention of new, high-potential customers. (See the “Maximize ROI” scenario above.) It would want to measure its success in this area. Manual approaches would not be feasible, and the company would most likely have to resort to counting customers, without regard to whether they are considered “new” or “high potential,” based on business definitions.
Integrating BI into the process has the ability to automate highly complex business rules to achieve complex measurement based on business logic. (See table.)
Click to enlarge
In addition to being the right tool for the job in supporting measurement requirements, BI also offers necessary analytical capabilities for active management. To meet the spirit of a BPM initiative, the organization needs to measure and proactively manage performance.
Another level
While measurement provides insight into what happened or what is likely to happen, BI analytical capabilities go a step further to uncover the underlying reasons why business performance is what it is or is likely to be in the future. Without this information, it is impossible to take the actions needed to get back on course.
Without BI, an organization might be able to measure, but it can’t truly actively manage for optimal business performance. In this very important way, BI goes beyond supporting business measurement, and enables the analysis needed to address the root causes of problems.
BI affords the opportunity to both automate measurement and enable analytics for optimized BPM. Organizations that are committed to BPM have an opportunity to further mature their programs and to reach the next level of performance by exploiting the information advantage associated with BI.
Nancy Williams is the vice president of DecisionPath Consulting’s business intelligence (BI) practice and brings more than 20 years of business and technical experience to the firm.