SearchCIO.com solicited questions and answers from industry experts about what CIOs and other upper-level IT managers need to know about this emerging technology.
Companies that survive with little or no business intelligence and performance management capabilities are at risk. These companies run on gut feelings. Senior managers sense that they know what is going on because they apply their knowledge and experience to the current situation. For today's complex corporations, data-driven decisions are needed. Executives need a comprehensive view into every aspect of their business and often in different perspectives. If a company is running on gut feeling rather than being driven by accurate data, competitors may notice the company's weaknesses before the company itself does.
What are common performance management myths?
Myth 1. It's the job of the chief financial officer. In fact, it's everyone's job, from the CEO to the employee. Performance management (PM) helps IT prove its value to the organization in business terms. In addition, IT plays a critical role in aligning resources with the organizational strategy.
Myth 2. A dashboard is all you need. Many organizations struggle with the most basic component of a performance management system -- good, clean, integrated data. Again, it's IT to the rescue. "Point solutions" are the way to go. It's an IT nightmare. Integrating systems from multiple vendors is the No. 1 technology obstacle in performance management.
Myth 3. Analytics are just "nice to have." Analytic software dramatically increases the success rate of performance management by helping to determine causes and effects, forecasting and simulating strategies before they're implemented.
Why do I need a business performance management solution when I have already spent millions investing in ERP and have licenses sitting on the shelf that my business owners could use?
ERP source transaction systems collect reams of data about what is happening in the business. They capture transactions and automate operational processes. But they do not help transform this data into actionable business information. There is a distinct performance gap between the source transaction systems and the business process of managing/driving performance improvements.
Can I leverage my existing IT investments?
Yes. One of the reasons for the rapid adoption of BPM is that it is designed to work with other systems, applications and data sources. There is no need to "rip and replace" existing IT systems because BPM uses standards-based integration mechanisms to move information where it is needed as part of a process. For example, this could be importing data from an ERP or customer relationship management system in order to validate information, or exporting to a data warehouse based on the results of a process activity or an automatic e-mail notification.
Some BPM suites provide the ability to manage both structured data and unstructured content (documents, images, faxes, email, etc.) directly within the process. These products are typically integrated with a content management system, allowing for multiple types of information to be packaged together as needed by workers and systems and providing a complete solution for security, retention and storage of process information. Many processes require a combination of data and content-based information, and the ability to effectively handle both should be a requirement when evaluating BPM solutions.
What are the IT issues a CIO needs to keep in mind when selecting or deploying business performance management?
When choosing a BPM product, a CIO should look for a vendor that specializes in BPM and can offer a complete platform capable of meeting the enterprise's full range of needs. Specific considerations include effective integration with legacy or disparate systems, interoperability with current software offerings, the ability to incorporate specific actions (such as workflow and analytics) into the product and a modern design that takes advantage of emerging standards such as Web services.
Hosted software and Software as a Service are popular right now. How viable are they for BPM initiatives?
Both are great options for smaller organizations, but large organizations should ask some critical questions before moving forward with either one. Questions to ask include: Are they scalable? How easily can I integrate them with my enterprise applications? What is the true long-term ROI?
When should I consider BPM "done?"
BPM should be viewed as holistic, not just as a finance activity. After implementing BPM in finance, organizations should look to operational BPM, leveraging BPM across different functions. One of the most promising areas for BPM is sales. Sales performance management can help reduce the expenses of managing an incentive plan, while also growing profits, retaining top-performing salespeople and tying sales performance to corporate objectives.
Special thanks to the following industry experts for their advice on BPM: Cliff Longman, CTO, Kalido, Burlington, Mass.; Becca Goren, marketing manager for performance management at SAS Institute Inc., Cary, N.C.; Leah MacMillan, vice president, product marketing at Cognos Inc., Ottawa, Ontario; Brett Stineman, senior product marketing manager at EMC Corp., Hopkinton, Mass.; Ben Plummer, vice president of marketing and strategic alliances at Applix Inc., Westborough, Mass.; and Rod Radojevic, vice president of product management, Varicent Software Inc., Toronto.
Matt Bolch is a contributing writer based in Atlanta. Let us know what you think about the story; email firstname.lastname@example.org.