Business Performance Management Software
Definition:
Business Performance Management (BPM) is a management culture that aids enterprises in optimising
business performance through the analysis of business processes and the provision of forecasting
tools and performance analysis.
What is BPM?
It’s a simple fact that accurate and appropriate
business intelligence is critical in the
attainment of both the short- and long-term goals of an enterprise. The possession of relevant
data about
customers, competitors, internal operations and the marketplace gives enterprises the
ability to make the best decisions to ensure their present and future success.
 Business Performance Management software (from vendors such as Applix, SAP AG and Longview
Solutions) provides the suite of tools necessary to collect and analyse such data. The basic
processes of such software can be broken down into three functional areas:
Data Collection
One of the greatest challenges in performance management is the appropriate storage and
organisation (and
safety) of an enterprise’s data. To this end, BPM software incorporates support for data
warehousing – that is, the collection of all informational
assets of an organisation into a
single ‘corporate memory’.
The central concept of data warehousing, rather than being simply a passive repository for all
the data generated by an enterprise, is in storing data in a way in which it can be easily
accessed for the purposes of querying and analysis. Data warehouses generally follow a set
process in filing and categorising data:
* Source Data Layer
Source data refers to any electronic data of value to management.
* Data Transformation Layer
This electronic data is then cleaned, sorted and standardised according to the data storage
protocols the enterprise has implemented, ensuring not only that the data is understandable
to human users but also to aid in the querying and analysis of data at a later stage.
* Data Warehouse Layer
Data can be stored using a dimensional or normalisation approach depending on the requirements
of the enterprise. The vital point at this stage is to ensure that data can be easily analysed
and utilized.
* Reporting Layer
The raison d’être of any data warehouse is in facilitating the analysis of data for the purposes
of assessing business performance, which leads on to the next aspect of BPM software.
Generating Information
For data to become useful to an enterprise it is essential that tools and processes be put in
place to allow for its appropriate and timely analysis. BPM software provides the means to
generate reports and analysis on all forms of business data.
For business data analysis to become a useful tool, however, it is essential that an enterprise
understand its goals and objectives – essentially, that they know the direction in which they
want the enterprise to progress.
To enable this understanding it is essential to define a number of Key Performance Indicators
(KPIs). KPIs are a set of values used to quantify the performance of an enterprise (production
time scales, revenue per customer and levels of debt are all KPIs).
KPIs offer a tool by which an enterprise can construct a set of measurable objectives to track
the progress of an enterprise. The idea of BPM software is to provide the means by which an
enterprise can generate an analysis of data related to these indicators.
These analyses can be in any format valuable to decision makers, whether they be in the form of
simple spreadsheets or more advanced
information visualisations.
Response to Data Analysis
The primary objective of BPM software, following the gathering and organising of relevant data
and its analysis, is to provide decision makers with the decision support systems necessary to
form strategies that will drive the enterprise towards its objectives.
Analyses created by BPM software create better
feedback loops. By providing timely analysis of
business information they allow management to identify problems and take corrective action before
they become too large.
In addition to providing the support necessary to analyse current performance and correct
problems, BPM software also has the capacity to forecast future performance. Based on the
analysis of past information the software can answer a range of ‘what-if’ queries to aid
management in creating strategy for the future.
In a Nutshell
Essentially, BPM software offers a complete solution to the information management needs of an
enterprise. It provides the means to store, organize and analyse large volumes of data to allow
for the production of simple, understandable analyses to aid management in their decision making.
Further information regarding business performance management can be found at the
BPM Standards Group.
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