Does Your Company Need Business Performance Management?
At some level, even the smallest business uses business performance management (BPM), even if they do not have a formal BPM software system installed. In the least formal stage, BPM occurs every time a manager asks, “Is this process working?” or “How well is it working?” A business performance management implementation formalizes this analysis, looking more closely into all of the business’s processes and performance, deriving metrics, and delivering visibility into what makes the business work.
The Value of Business Intelligence
Business intelligence is essential, even for smaller businesses. Information is capital in today’s business environment. Information about the competition is obviously relevant in a competitive environment; information about the customer base is vital from a customer services perspective, and of course, information about internal operations is essential to a smooth-running enterprise. Business processes and the people who run them tend to resist change. Business performance management helps to overcome this resistence by gathering intelligence on internal processes to create an environment of continuous improvement.
What does Business Performance Management Consist Of?
Business performance management is typically delivered as a suite of tools that do several things. First, the tools gather information; then other tools within the suite take that information and analyze it, and generate detailed and informative reports that can be easily understood. Lastly, most business performance management suites also include components to allow management to take action based on the information gathered.
Collecting the information requires integration from multiple departments, and often, from multiple silos of information that may not be readily accessible to areas outside of each silo’s domain. This process of gathering disparate information, actually a type of “data warehousing,” brings together all of a corporation’s relevant data into a single physical or virtual location. Furthermore, simple data gathering is insufficient; it must be in a common format that lends itself to uniform analysis. This phase of business performance management alone can be a major undertaking.
Once the framework for information gathering has been laid, then reporting can be enabled. With corporate data in a common format, that data can then be queried using a set of standardized and ad hoc reporting tools that can be used for a wide variety of analytical purposes. Specifically, management will define Key Performance Indicators to set a standard for what must be achieved to meet the corporation’s business goals—and the reports will show how those goals are being met.
Lastly, most business performance management systems go beyond reporting, to include decision support and forecasting tools that allow managers to take action on the information presented in the reports, and accurately predict future performance.