Intelligent Enterprise

Better Insight for Business Decisions

RSS
Webcasts
Whitepapers
Subscribe
Home

September 1, 2003

Behind the BAM Hype

Why is managing operational performance so difficult?

by Mark Smith

You've no doubt noticed all the hype surrounding business activity monitoring (BAM) and all the new vendors coming to market with software in the last six months. The magical appeal of BAM — the technology and architecture for monitoring and alerting business events and activities — is center stage as new products have become available for review. The questions that should be on everyone's minds are, "Will this technology evolve? Will it survive or be consumed by the ERP, business process management, and BI industries?"

Ventana Research recently conducted the "2003 Operational Performance Management Study" with media and association sponsors, Intelligent Enterprise and The Data Warehouse Institute (TDWI). This study, published in July, surveyed more than 1,000 global organizations to determine the current state and future of how organizations are addressing the challenge of managing business processes using technology. It revealed some eye-opening information about BAM and ERP.

BAM hype has had very low penetration where it counts: the organizations interested in measuring and monitoring business activities and processes to improve operational performance management. And organizations aren't turning to the old standby ERP, either. What follows are some interesting research results and analyses from the 2003 Operational Performance Management Study that provide objective insight on these two facts.

How Important?

When asked about the importance of measuring and monitoring the efficiency of business activities and processes, the majority of individuals, 93 percent of 894 respondents, believe this business requirement to be very or somewhat important. (See Figure 1.) A higher percentage of North American respondents (60 percent) said this requirement was very important compared to Europeans (39 percent). Executive managers responded with increasingly higher levels of importance for this initiative according to their organization's size (the bigger the company, the more important it is).

Ventana Research recommends that those organizations that don't rank measuring and monitoring the efficiency of business activities and processes as important should reevaluate their priorities if they want to remain competitive.

Top Priorities

Out of organizations that are currently measuring and monitoring business activities and processes, the survey asked participants to provide their top three business reasons for this initiative. Out of 713 respondents, improving efficiency and managing or reducing costs ranked highest, followed by increasing focus on revenue opportunities. Retail and professional services were the only industries placing a higher priority on increasing focus on revenue opportunities than improving efficiency and managing or reducing costs. (See Figure 2.)

Ventana Research believes that organizations can't afford to emphasize efficiency and managing costs at the expense of other priorities, such as responding to competitors or aligning individual actions. Balancing these priorities is the way to ensure success.