In last month's column, we started with a list of my favorite business performance management (BPM) implementation mistakes to avoid. These missteps have real costs relating to time, money, project outcome and career impact. The first three mistakes included: believing vendor hype, trying to custom build too much and going it alone. Now, on to the conclusion.
Mistake 4: Adding a dashboard to a warehouse. Those companies that have already created a data warehouse (DW) are ahead of the game. They have taken a critical step toward BPM success - pulling all key data together into a central repository utilizing a common set of meta data. However, just slapping a sexy dashboard on top will not turn a DW into BPM. Keep in mind that the three basic elements of BPM - content, processes and technology - are all essential. You need to address the processes such as budgeting and consolidation. Give attention to the content, such as key performance indicators (KPIs) and reports, and the data which they contain. Finally, the technology piece includes more than a central information repository; it also requires supporting systems and applications. Use your data warehouse as a starting foundation for BPM. Identify the processes that still need to be automated to supplement/feed the warehouse, such as budgeting and consolidation, and acquire those applications. Work with your business leaders to define the KPIs that need to be displayed on your dashboard. Then, and only then, add the dashboard technology as the finishing piece.
Mistake 5: Ignoring everyone outside finance. There's a good chance your BPM project will be initiated and driven by the finance department, and with good reason. However, it's a mistake to leave sales, marketing, services, manufacturing and other key parts of your business out of the requirements definition. The value of the BPM investment can be multiplied by extending it into the revenue-generating, product development, manufacturing and service delivery departments. In addition, by including some of the departments involved in delivery, you may be able to improve efficiency and identify potential cost-savings. If these departments don't have a say in the early stages, you may end up buying a system they can't or won't use. BPM should be a company-wide initiative. Make sure it achieves that high standard by forming a cross-departmental team early in the process. This group should be involved in defining and prioritizing requirements as well as evaluating vendor finalists. Once the project gets underway, progress should be communicated to the team on a regular basis.
Did we say five mistakes? There's one more, and it's potentially the most expensive.
Bonus Mistake: Assuming IT can handle it all. Perhaps the most expensive error is placing full responsibility on the IT group including definition of requirements, reengineering finance processes, vendor selection, implementation, training and, of course, overall project management. Let's consider the first of these: specifying requirements. The business side of the house must be your partner. If not, the resulting system will miss the mark. This is not a negotiable point. With all due respect to talented IT staff, the overall management of a BPM project is generally beyond the reasonable capacity of an IT project manager. Unlike most other IT initiatives, this role involves such problems as arbitrating between powerful competing interests within the company. Implementing several BPM components simultaneously is really numerous projects in one. In addition, IT will already have its hands full optimizing the infrastructure, installing the software and databases, identifying, cleaning and moving data, etc. Get help! An impartial outsider who understands the business can be invaluable.
For those of you just starting down the BPM path, we hope you take these lessons to heart and avoid the most common mistakes. For those of you who have already completed a BPM project, we'd like to hear about your experience. What went right and what went wrong? Please feel free to send a chronicle of your initiative, emphasizing key turning points, to me at email@example.com. Let me know if names should be changed to protect the innocent (or guilty).
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