Henry Morris, vice president of Applications and Information Access Software Research for IDC, explained the difference between business performance measurement and business performance management during a presentation at TDWI World Conference Spring 2002. Business performance measurement (which includes balanced scorecards and other metrics) analyzes data by dimensions and key performance indicators. This is the high-level, enterprise-wide view. Business performance management can be differentiated because it builds predictive models for leading performance indicators for enterprise optimization and develops actionable information. "It affects decision making such as revenue management and supplier relationship management," he emphasized.
Morris explained that there are three levels of analytic applications across an organization. The first is the strategic level. This includes balanced scorecards and application areas built on a planning platform. Second is the process-specific/operational analytics such as finance, manufacturing or CRM over a subject data mart. The third is a foundational layer which includes activity-based accounting and offers the way to deliver the metrics. Morris states, "At this time, no vendor can supply a product in all three areas. There are good vendors in each of the three categories, but it is a mix of build and buy at this stage of the game."
He recommended that BPM must impact decision making to generate any ROI. Morris proposed a few guidelines for beginning a BPM implementation.
- Identify key business objectives
- Identify KPIs to measure progress to objective
- Focus on business processes with high impact to selected KPIs
- Gain the support of relevant business and technology stakeholders
- Implement an analytical application to track, analyze and model potential operational changes
- Support a collaborative policy hub
- Measure, evaluate and refine
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