Analyzing business activity data in closer to real time, whether to identify and reduce cost centers in a given day or monitor customer response to a new marketing campaign, is helping businesses respond to the economic recession. And some CIOs are utilizing existing investments to add this functionality -- which users call business activity monitoring (BAM), operational business intelligence (BI) and event-driven software.
CIOs and analysts interviewed offered a range of solutions, including data streams integrated in Microsoft SharePoint, mobile data integrated with business intelligence portals and modestly priced monitoring tools.
Business activity monitoring can analyze large-volume transactions down to the second, or even fractions of a second, but costs from $300,000 to $500,000 for software, with an additional 20% cost for maintenance, said Bill Gassman, a research director at Stamford, Conn.-based Gartner Inc. Plus, the closer you get to real time, the more you have to upgrade your infrastructure and change business processes so you can use that data effectively.
Thus, "Companies often start off a lot smaller than that, and they can do some very simple projects with the BI tools they already have," Gassman said.
Take Euro Disney SCA, which used FTP, an existing Business Objects portal and scanners placed around the park to display, in 15-minute intervals, where visitors in the park were gathering, Gassman said. This real-time business activity monitoring approach, with Business Objects portal views displayed in employee workroom areas, allowed employees to see where they were needed most by visitors to the park. Alerts were also sent to employee mobile devices when ride lines became too long.
Such projects have immediate paybacks in terms of better customer service, which is why tactical projects are popular right now, said Colin White, president and founder of consulting firm BI Research in Ashland, Ore.
"The biggest growth area for operational BI is using it for short-term cost-benefit projects. People are focused on tactical projects that address specific business units and performance cost centers," he said. Operational BI is also used in fraud detection and risk analysis.
That was the case at a national record store, which set up a system to monitor cashiers because management suspected some workers were giving friends steep discounts, Gassman said. As cashiers sold merchandise, the transactions from their point-of-sale (POS) terminals, including discount percentages, were collected and aggregated across 12 stores on a SharePoint server for management to view.
The biggest growth area for operational BI is using it for short-term cost-benefit projects.
Colin White, president and founder, BI Research
Over time, the store morphed the practice from fraud detection to real-time sales monitoring, integrating the POS sales data on the SharePoint portal with information from store scanners that counted the number of customers coming into the record stores. Employees could look at a SharePoint portal in the backroom and see, for example, that the Boston store had a 60% conversion rate (turning people walking in the door into paying customers); Chicago had a rate of 30%; and Seattle 60%.
"Employees turned this into a contest, and management let employees experiment with placement of merchandise, putting the top 10 DVDs in the front versus the back of the store, for example, and then they would check data to see how that worked," Gassman said. "It turned into an information democracy."
A level information playing field is also under way at WildBlue Communications Inc., a satellite broadband service provider in Greenwood Village, Colo. with 400,000 subscribers.
CIO Mike Casullo wants to eliminate paper reports and give everyone in the company access. "We are correlating data in different [display] formats from the bottom up, so the CEO receives the same data as everyone else," Casullo said.
To monitor a range of data, from IT systems performance to customer performance, the application development team started building monitoring capabilities into its custom applications. WildBlue also recently invested in HQ Enterprise, a business service monitoring tool developed by Hyperic Inc. that monitors Web application infrastructures, including operating systems, virtual machines, application servers, Web servers, databases, messaging servers and authentication systems.
The Hyperic enterprise edition, called HQ Enterprise, starts at $300 per production server and $200 for nonproduction servers and network devices per year. Volume discounts start at 25 servers and prices include support, upgrades and new releases, according to a Hyperic spokeswoman.
"Gathering data is something I live and breathe every day," Casullo said. "If you buy or develop a product for $50,000, how do you know it's doing what it's supposed to do? The only way to do that is with some type of monitoring … and if you can deliver data first [on the performance of a product], before the business asks for it, you win."
Where BAM meets BPM
There are other ways to get more bangs from bucks already spent on business intelligence and other software investments, such as speeding up the refresh or update cycles of the data warehouse for closer to real-time monitoring. CIOs can also tap enterprise application integration products that are already installed, such as products developed by IBM, Oracle Corp. and Tibco Software Inc. These products have analytic capabilities within their application integration, BI and operational software products as well as BAM capabilities via service-oriented, workflow and business process management (BPM) functionalities, White said.
The real value from business activity monitoring comes from combining it with BPM suites, because monitoring what's happening in your business processes can prevent problems or detect them early. "BAM is most valuable when it is combined with processes, and you don't need a process orchestration engine to have BAM," Gassman said.
Some BPM suite vendors are broadening their offerings to include business activity monitoring, Gassman said. These include IBM, Software AG and Progress Software Corp., with its Apama tool for building event-driven applications.
A growing number of BI application vendors such as IBM Cognos, SAP Business Objects and Oracle Hyperion, as well as data warehouse vendor Teradata Corp., are developing appliances for BI applications that include real-time operations monitoring, White said. This gives companies a combined hardware and software solution that is easier to set up and put into production on low-cost hardware, versus installing operational BI applications that require high-performance hardware and software, White said.
Let us know what you think about the story; email Christina Torode, Senior News Writer.