At BPM's core are consolidation, planning and budgeting applications, a common database, and, often, the ability to display the data via a scorecard or dashboard interface. Vendors tout the closed-loop nature of BPM: the same data flows through applications used for budgeting, planning, forecasting, and operations, so as business results change, budgets and forecasts can change in response. Choosing BPM software - compare packages.

What, exactly, is BPM? Simply put, it is a framework for organizing, automating, and analyzing the business methodologies, metrics, processes, and systems that drive business performance. It is a blueprint for better business management. It promotes greater visibility and accountability and better aligns stakeholder goals with strategic and operational planning. BPM Magazine

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 SoftwareBusiness 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.