It is fair to say that standards are lacking in business performance management (BPM), exacerbated by the fact that there is not only disagreement over what BPM is, but even what it's called. We've recently heard a vendor say that BPM doesn't have to include planning, a view that seems patently wrong to us (how do you assess performance if you cannot compare it to a plan of your expected projections?). Some media Web sites are referring to performance management and process management interchangeably, which confuses getting your internal process workflow documented and selecting the optimal key performance indicators to keep your organization aligned and on track. We've even seen two articles in the same magazine refer to BPM by different initials (BPM, CPM and EPM seem to be the most common). This lack of clarity in this burgeoning category of business performance management is felt by many of your peers, several of the vendors and even service companies that implement BPM for a living.
What does the current absence of standards mean to you? In general, there are serious risks for a company that implements BPM in blissful ignorance of developing standards. Veering outside what will become the mainstream is dangerous; the risk increases that you could be left abandoned without anyone to turn to for support. Enacting practices and approaches used at other companies will make it easier down the road to hire employees and get them to easily understand your overall BPM architecture because they've seen it before.
Recognizing that there is some confusion in the category should not lead you to avoid leveraging business performance management to help enhance the competitiveness of your business. On the contrary, business performance management is a rapidly developing, early stage category, and leading companies are wisely taking advantage of enhanced capabilities provided through fundamental BPM philosophies. By carefully managing your project and recognizing the basics of what constitutes the core components, processes, methodologies and evolving best practices, your organization can also benefit from some of the far-reaching results of BPM: a unified single version of the financial truth, execution that is tightly tied to company strategy and a more real-time operating mode for the entire company.
Major Players Tackle Standards Definition
It bodes well for the future that organizations are being formed to set standards and share best practices, and they include the most influential companies and analysts.
To acquaint you with the main players, we'll drop some important names in the BPM category. IBM, SAP AG, Hyperion Solutions Corp., IDC, META Group, Applix and The Data Warehousing Institute joined with our company, BPM Partners Inc., in late March to announce the BPM Standards Group. As a group, our goal is to establish BPM standards that can be used by software vendors, service providers, the media and, ultimately, users. The early involvement of global software vendors and consultants has been crucial, and more are in the process of joining as we write this article. Cognos, Geac, OutlookSoft, EDS and Unisys have all expressed interest in participating.
An entity called the BPM Forum was formed in July 2003 to address the challenges of performance management primarily from a user perspective. The BPM Forum already numbers more than 220 business leaders. This group describes their mission as helping to build the performance-accountable organization. Their ranks include heavy hitters such as Fujitsu, General Electric, Hewlett Packard, JP Morgan Chase, ICN Pharmaceuticals, Safeway, Southwest Airlines and many more.
Finally, the BPM Implementation Alliance (BPMIA) is a global network of performance management consulting experts who share a methodology and quality-conscious approach to performance management. They work as a virtual team to assist companies with their BPM initiatives from start to finish, across all industries, geographies and product sets.
Definition Comes First
The new BPM Standards Group's first job, self-assigned, was to define BPM. This is the group's current thinking:
- BPM is a set of integrated, closed-loop management and analytic processes, supported by technology, that address financial as well as operational activities.
- BPM is an enabler for businesses in defining strategic goals and then measuring and managing performance against those goals.
- Core BPM processes include financial and operational planning, consolidation and reporting, modeling, analysis and monitoring of key performance indicators (KPIs) linked to organizational strategy.
To flesh out a BPM framework, the group formed three working committees: process, technologies and content. This will be important as more and more users embrace BPM. Unlike the early adopters who are willing to take some risks, the more mainstream BPM users need to know what to expect. They need more structure. In the future, the BPM Standards Group will tackle establishing best practices for organizations that are in various stages of deploying BPM.
What is unusual, given that this is a hot area for software vendors, is that there are no major arguments so far between the players. Common sense has prevailed over competing commercial interests.
What You Can Do
Your first concern should be to stay abreast of developing standards and mitigate your risks as your company gets involved with BPM. You can find the latest information produced by the BPM Standards Group on its Web site. You can also play a role in standards evolution. If you are an end user, your involvement in the BPM Forum can give you a voice in the development of performance management, and at their site you can find information about becoming a member. Forum members will have the opportunity to review documents produced by the BPM Standards Group before they are finalized. Consultants and implementers should consider joining the BPM Implementation Alliance. Industry thought leaders are welcome in the BPM Standards Group. Membership information is available at the respective site:
There has been a feeding frenzy of product development, system sales, implementation and usage in BPM without having standards on which to lean. This makes it harder to develop best practices. On the other hand, most software vendors recognize that standards will help their cause, and few have any desire to be an outlier. The BPM Standards Group, the BPM Forum and the BPM Implementation Alliance are solid groups, with knowledgeable people who are deeply engaged with business performance management and eager to see widespread user acceptance and success.
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