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Leverage Existing Systems to Get BPM Benefits Now

  • October 01 2004, 1:00am EDT
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Craig Schiff wishes to thank Chris Iervolino of ITEC, a BPM implementation consultancy, for his contributions to this month's column.

In prior columns, we've discussed the selection of a business performance management (BPM) software vendor; however, you might not need to buy or build anything to get the BPM benefits you are pursuing. The key components of a good, solid starter BPM project could be hiding in your existing systems.

Consider the fundamentals of a BPM system: plan data, transaction data, analysis of operational data and a scorecard to help evaluate performance. The plan data is covered if you have an existing planning system in place; however, if your system is Excel-based, you probably need to buy planning software designed to perform this task on an enterprise level.

For transaction data, a single company-wide transaction-processing system gives you a big head start. Even in a heterogeneous environment, you might get away without buying a BPM consolidation system if you operate a flexible data warehouse that integrates transaction data company-wide. If you already run Hyperion Essbase, Microsoft Analysis Services or Applix TM1, you have the tools to perform the operational analytics of a BPM system.

Your company needs to determine its key measures: what drives your business and what KPIs can best measure your success in achieving strategic goals. This is a crucial step whether you are buying a new BPM system or trying to leverage the systems you already have. You will use these key performance indicators (KPIs) to create your scorecard - the most visible part of typical BPM systems.

The scorecard is usually displayed on a dashboard; however, you don't need to buy new software. The scorecard can be displayed using the report writer of one of your existing systems. Write a report that compares actual and plan for the key measures you selected for your scorecard. Display variances as well. Many report writers can color code the results and generate graphs.

To pinpoint the BPM functionality that existing systems can deliver, we recommend a structured approach: a systems audit tailored to BPM requirements. Done correctly, it will show you specifically where use of in-place systems will cut down on both cost and complexity of implementation.

BPM is more about your business processes than about software. Important steps in launching a BPM initiative are to evaluate your strategy, determine your most important business drivers and choose KPIs. We've heard clients comment, "This was 90 percent accounting changes and 10 percent software implementation."

One strategic accounting decision is whether or not to accompany the BPM project with a company-wide move to a unified chart of accounts. This may require a major campaign of persuasion; however, with a consolidation system already in place and one chart of accounts to support it, the jump to BPM is smaller.

Collection and analysis of fundamental performance data is an important focus point. Maximize the use of actual results, plan data and the scorecard. You must decide on the granularity of actual data for analysis, ensure the strategic utility of the budgeting process and select meaningful, measurable KPIs.

Leveraging in-house systems can save you more than license fees. Those 18 to 20 percent annual fees for upgrades and maintenance on new software systems add up. Implementing a new system is much more costly than evaluating and integrating current systems. It pays to take a close look at existing infrastructure with the systems audit.

Like most companies, yours probably has important elements already in place to create a BPM system. It takes only a modest effort to turn those disconnected system fragments into a BPM solution. In most cases, it will be quicker and less expensive than purchasing new software. Of course, if you want a fully integrated, seamless solution, look at a complete BPM suite from one of the leading vendors; however, bear in mind that even some single-vendor suites have integration challenges. The bottom line: determine your requirements and budget, analyze what you have and determine the BPM solution that will work best for you.

For the unabridged version of this column, please visit

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