Business Performance Management (BPM) is also known in the industry as Corporate Performance Management (CPM) and Enterprise Performance Management (ERM).  What is the common denominator of all three?  That’s right, its all about performance management.  In a survey performed by Applix and BPM Magazine for 2006, BPM  is defined as “…a methodology to optimize the execution of business strategy that consists of a set of integrated, closed-loop, analytic processes, supported by technology, that address financial as well as operational data.  BPM enables a business to define, measure and manage its performance against strategic goals.  The core financial and operational processes of BPM include planning, consolidation and reporting, analysis and the deployment of linked key performance indicators (KPIs) throughout an organization.

This survey provides interesting user insights on BPM. The survey was sent out to the BPM Magazine subscriber base and 250 responded.  14 industries were represented including Agriculture, Insurance, Banking, High-Tech Manufacturing , Healthcare and Transportation. Company size varied from less than 50 employees to over 2000 employees. 

First let’s look at which departments are using BPM today. By far, the biggest user of BPM is Finance. With the increased focus on SOX compliance, this should not be a surprise.  What is very interesting is the growing use by Operations to improve performance, data integrity and reducing manpower requirements.  Sales and Marketing have always been a big user of BPM, for customer tracking, focused marketing efforts and increased sales.  Customer Interaction has become an ever increasing valuable tool in order to improve customer satisfaction and increase customer loyalty.  Being able to show the customer that you care has many long term benefits.  Now Supply/Distribution and HR functions are also seeing the benefits to using BPM to improve their services and track their performance.

Now that we know who is using BPM, we should determine what problems BPM is solving. The most consistent response from the survey was the BPM delivered one version of the truth.  How many times have you been in meetings, hearing different numbers from different departments.  One department is stating success while the other is raising the red flag.  You are in the middle trying to figure out which is the correct version.  The value of having one version of the truth is extremely powerful.  Reducing labor and allowing more analysis came in

strong at second place. Increased analysis can enable better decision making while reducing costs is always on the radar scope. Coming in third was understanding profitability by products, service and customers. Let’s think about that one for a moment. You would think that this is a given, but you would be surprised as to how many companies have no idea what areas are delivering the greatest revenue, or highest revenue margins. Many don’t capture who their best customers are in order to leverage more sales or to offer increased services. Think of the lost revenue opportunities that can occur from not having this basic information. Yet it happens all the time. Is it any wonder that there is increased focus on what BPM can deliver?

When asked “What Functions Could Benefit from BPM?” the response was divided almost evenly across the six departments.  The message is, every department can benefit from BPM.  As you can see, performance management is on the move.  Once the primary focus of Finance departments, the community is growing and operational performance management is catching up fast.  It is clear that there is a common understanding of the benefits of performance management across the individual organization functions.  The tough questions are what type of BPM solution is your company using, are they fully utilized and effective?

contributed by Michael Vigil

Spotlight: Accepting known mediocrity versus seeking unknown potential

Have you ever sat and watched children learn or at play? Their senses are in a continuous acquisition mode. They are open to all new aspects and elements because there have no preconceived notions.

All throughout our academic years from preschool through advanced education, we are taught to explore and ask questions to gain understanding and develop insights. Presumably we are being groomed to become contributors to our society and to add new levels of value with each new generation.

Then as we begin to become professionals and take up our role in society, this magical experience seems to slowly stop for most people. Instead of pushing the envelope to learn and innovate, we get harnessed into the team which has already determined the pace at which we will move. We learn very quickly how to apply various filters to shield ourselves from seeking the unknown potential.

This shift of behavior is characterized by "accepting known mediocrity versus seeking the unknown potential". For most it begins with experiencing a few of their good ideas getting squashed. Then it is reinforced with a large dose of "I told you so".

So how and why does this shift occur? It could be this little thing called a paycheck. Once we all become a contributing member of society, the paycheck becomes the be all and end all. It sounds harsh, but let's look deeper.

We all meet people everyday working in companies that knowingly ignore the signs of breakage. Typically the situation gets sidelined with a statement like "we have always done it that way", "why waste the energy to change it, no one cares" or "its not on my goal set". This level of apathy is widespread and visible everywhere. It certainly received a healthy injection of 'stay low and fit in' when the dot.com went boom. Raising your hand too high could get you visibility and possibly an opportunity on the Pink Slip Team.

So why should you care now more than ever? Because highly successful companies are made of people who care to make a difference. When you stop caring to make a difference and simply exist for the paycheck, your personal growth, health, and self-esteem will suffer.

How do you breakout of this funk? Take personal ownership and seek the unknown potential versus continuing to accept the daily mediocrity. It will take courage and leadership, especially when many companies have become very good about accepting mediocre performance. There is no question that your paycheck is important. Yet it only takes a few people to start a cultural shift. So what about you? Are you a highway or a speed bump on the road to success? Give us a call at ASIL to explore your potential today.

contributed by Pete Pazmany

Industry Trends

Enterprise Performance Management (EPM) Growth in 2006

AMR Research surveyed more than 200 companies within North America and across all sectors of industries and concluded that EPM spending remains strong in 2006 with nearly $23B planned for software, hardware, labor (internal and external), and integration services.

Companies were questioned about anticipated spend in the five areas reflected in Table below.

An interesting key finding in assessing customer preferences in software procurement emerged.  While software-as-a-service (SaaS) and on-demand delivery modes are gaining a lot of attention, traditional models of seat-based pricing and licenses still make up 80% of buyer preferences.  In addition, service companies prefer the SaaS or on-demand option over manufacturers, however over the last two quarters there has been increased interest in these models.

In conclusion, “Last year, the ability to react to changes in the business rated highly, but dropped in importance this year, replaced with process monitoring.  But the strategic view of EPM is strong, and companies continue to use these investments as a way to manage and guide their businesses forward.”

The details of the study will be published in AMR Research’s Market Analytics Report “Trends in Enterprise Performance Management, 2006” in the next few weeks.

contributed by Deborah LeBaker

Product Highlight

Businesses have found that the best way to ensure that an issue is not repeated is through a five step process.

1. Identify the root cause
2. Define the corrective action
3. Change is implemented
4. Validation by Initiator
5. Monitor future corrective actions

This process is known as Closed Loop Corrective Action.  This is an industry term and concept that many companies are striving to adopt.  Any action that is taken to resolve an issue or problem must also have a component of supporting evidence that the issue has been resolved.  MAX Partnering™ provides an easy to implement integrated tool suite that guides users through the processes of Closed Loop Corrective Action management

For a full feature description of the software tools that are available please visit us at: www.asil-inc.com/Products/Products.htm