While most organizations do a decent job of managing business processes, most of them have not yet mastered the challenges of linking their people and systems with those processes. But applying business intelligence tools to business process management is helping to close that gap. In fact, it is actually opening an area of process-centric performance management and giving rise to a new kind of business performance management (BPERM), best defined as operational business intelligence.

This BPERM expands the understanding that to improve operations and performance, integration with more data is required. And tools supporting BPERM are not to be confused with those supporting business process management (BPROM), with its focus more on the workflow involved in critical business transactions.

“Many people who talk about BI-based performance management think it’s just about giving a handful of employees at the top of the food chain information to help them make strategic, long-range decisions,” notes Steve Wooledge, product marketing manager for Business Objects, San Jose, Calif. “What organizations are asking for is a BI platform that can be tightly linked with operational business processes, the people involved and the way they work,” he adds.

A better insight into business processes allows companies to make better decisions. “By combining process information from BPERM tools with other information about the business, there’s a natural value-add that BI brings to continuous improvements in operational processes within an organization,” explains Wooledge. Better decisions mean cost savings.

The New BPERM Defined

New wrinkles in BPERM tools allow a mapping to many business processes to monitor data and alert people to areas for improvement. “Today, we have the data and technology to apply these process improvement principles across any business process that’s been defined and we can collect data about,” Wooledge says. The advantage of this, adds Curt Hall, senior analyst in the BI advisory group of Cutter Consortium, Berkeley, Calif., is the ability to foresee problems and act on them before they impact business.

At some level, BPERM involves dashboards and scorecards. In fact, according to Hall, dashboards are currently the largest BI operational area Cutter Consortium is seeing. Executives “want to look at like a balanced scorecard concept,” such as how well revenue’s doing and how well sales are going. They also want a gauge of human relations, a gauge of sales for different regions and to see if the company is on track to meet this quarter’s goals, next quarter’s goals, how the Sarbanes-Oxley effort is going and so on.

Mid-level managers, Hall says, look at a different dashboard that provides more product-specific information, such as sales of a specific product by region, sales groups and salespeople. “Some of that may be real-time information, but they’re mixing that with some historical information, too,” Hall says. “Just getting real-time data doesn’t help. It helps a little bit, but you need some context to it.”

Wooledge points out that “users want information to be at their fingertips in every area of the business, not just the C-level or within finance. BI has to be embedded within any application they use, whether it be a portal, ERP system, Microsoft Office or a process workflow within a BPERM tool.”

BI appears to be evolving to an everyday business tool. “BI is becoming mission critical. It’s used on a daily basis. The scale is large. If it goes down, business grinds to a halt,” notes Eric Rogge, VP and research director in Ventana Research’s business intelligence and performance management department, San Mateo, Calif.

“Operational deployment of BI is the engine that drives the BI industry today,” Rogge says. BPM is about delivering BI out to frontline workers so they can better perform their jobs. And it involves blending real-time data with a historical perspective.

Why Do I Need That?

Hyperion and Cognos have both shifted their focus to BPERM. Business Objects has focused on operational BI for years. These software vendors often talk about the same thing while speaking different languages. But regardless of the language used, most organizations have not yet realized their need for BPERM.

“BI suppliers have been casting about for a way to differentiate themselves from their peers,” Rogge notes. BI vendors have been attempting to differentiate themselves through product-line extensions with things like data integration, dashboarding tools, budgeting and reporting. “Now these larger suites are positioning themselves as performance management because they’re not BI tools,” Rogge adds.

Rogge likens today’s industry to that of the 19th century farmer, who could have farmed more acreage with a tractor. But because tractors weren’t yet invented and farmers couldn’t understand or fathom their use, they couldn’t embrace them. That’s where many of today’s IT organizations are with BPERM: “You don’t see a lot of IT organizations screaming yet for a performance suite. The rest are saying, ‘We’re still working on reporting,’” according to Rogge.

Analyst Hall believes the industry is ready for this shift, however, partly because it’s harder to sell stand-alone software anymore. In today’s IT atmosphere, Hall says, managers want a business reason for why they should purchase any tool. BI vendors “kind of need to be able to offer the company a business solution in order to get the stuff approved anymore,” he explains. They need to be able to say they offer the whole package just to get a foot in the door even if they don’t have all the technology a company desires, he adds.

And BI vendors are stepping up to the plate. If they don’t have the technology themselves to put these performance suites together, they’re gaining it through partnerships and acquisitions. Business Objects is a good example, having just scooped up SRC Software, a vendor of financial planning and performance management software.

These vendors will tell you that they have all the technology you need. Now they’re integrating the parts and pieces together, “but how well they’re integrated is questionable. It takes a while,” Hall cautions.

Facing Challenges

Yet that’s only one of the challenges in this shifting arena. The most significant obstacle in using BI on business process management is aligning data from disparate systems. This has been an ongoing challenge in BI in general. “Most companies have multiple operational systems in place and need to integrate data from multiple sources, put the data in the right context for different user audiences and provide front-end tools that make the navigation, reporting and analysis of this data intuitive for end users,” explains John O’Rourke, senior director of product marketing at Hyperion, Santa Clara, Calif.

What’s needed is some sort of integrated management methodology. “It needs to be grounded with the same methodology so everyone’s using the same terms or definitions of revenue,” notes Hall. Is it BPERM or operational BI?

According to Rogge, the issue is not alignment but contextualization “because many applications out there are stovepiped.” That’s the same thing Hall referred to earlier with real-time and historical data.

The answer to this challenge is in finding how data relates and integrates together. Technologies such as master data management and enterprise information integration technologies are emerging to address this. “The solutions are embryonic frankly,” Rogge says. “We’re just coming out of the starting blocks.”

Regardless, software vendors are doing what they can to help the transition along. Business Objects, for example, recently released BusinessObjects XI Built for Operational BI, a service-oriented architecture that allows BI to be called as a service from any application or BPM tool as needed by the user. The new tool, according to company officials, enables embedded analytics, process optimization and guided decision making.

In addition, Business Objects offers BusinessObjects Process Analysis for process improvement initiatives, BusinessObjects Process Tracker to structure BI in a workflow for repeatable decision-making processes, and BusinessObjects XI, a platform that can be integrated with Java, .NET and Web services.

Hyperion offers the BI Platform as well as integration of its tools into a unified environment. The company is working toward “pervasive BI.” The next release of its BI Platform, code-named Avalanche, will combine financial, operational and analytical reports into a single environment, according to company officials.

Cognos recently announced the Cognos Performance Management System, which is designed to connect people and goals across operations and management functions with right-time, actionable information, according to the corporate Web site. It is designed to bring together technology, best practices and a partner ecosystem.

Applix, supplier of the TM1 product with a multidimensional database that operates within memory at its core, emphasizes return on investment as its value proposition. “Customers do more with TM1 because it can do complex modeling and work with huge data sets,” says Brian Barnes, senior director of product management with Applix. The company recently announced the TM1 Financial Reporting and TM1 Consolidation products, in an effort to build on its BPERM base.

Pegasystems positions squarely in the related business process management (BPROM) market, with its SmartBPM Suite with its PegaRULES engine in the center. “Rules-driven [BPROM] has three differentiators: the ability to capture business objectives, execute on them and then optimize the process,” says Russell Keziere, director of marketing for Pegasystems. The company has recent customer wins at Wells Fargo, Allstate Insurance and Mellon Bank. A recent SmartBPM update emphasizes continuous improvement, and recently announced applications target specific purposes such as exception management.

Also in the BPROM market, Fuego helps companies close the gap between business strategy and process execution. Southwest Airlines recently committed to the FuegoBPM suite for building, managing and optimizing the airline’s business processes across the enterprise.

Other BI vendors are certainly following suit to help organizations overcome the challenges of aligning disparate data.

Case in Point

Emergency Medical Associates (EMA), Livingston, N.J., believes it has already overcome the challenge of aligning data, according to Jonathan Rothman, director of data management. As a large, freestanding emergency room group practice, EMA staffs 17 emergency departments throughout New Jersey and New York, treating 750,000 patients annually. “Rather than deploying physicians who work directly with the hospital,” Rothman explains, hospital emergency departments “will contract with us to provide doctors that work in their emergency department.”

EMA began applying BI to its business processes when it started in 1988 with its homegrown Emergency Department Information Manager (EDIM). The organization uses EDIM for such things as real-time tracking of patient location and status, document physician charts, patient discharge instructions and forms, and prescriptions.

This later led to the development of EMA’s data warehouse and BI infrastructure, emergency Medicine Analysis and Reporting System (eMARS) in 1998 for collecting and consolidating all the information about an emergency department visit, such as clinical data, operational data and satisfaction data. Tools from Business Objects serve as the BI engine, the semantic layer to the data warehouse, and as the medium to display information and content of reports distributed.

The organization identified each step involved in an emergency department visit and then identified important metrics between each step that positively or negatively affected the overall patient experience, Rothman notes. “Most people focus on a high-level, executive view of things,” he points out. “But my feeling is that the top-level executive will have less time to take that metric and do something with it than a person down at the operations level. That person will benefit from that metric being available in a way that it’s more meaningful,” he adds.

The challenge for EMA was deriving a single source for all information, thus creating one version of the truth. “We have overcome this challenge by creating an environment where people understand the value of a centralized repository. They understand the value of going to a single source of information,” Rothman says.

In addition to BusinessObjects, EMA is using the same vendor’s Web Intelligence product for query and analysis. The product allows EMA to create cubes of data metrics. “Now I have an even more organized way of making sure there is one version of the truth because people are using this cube that’s embedded in the Web Intelligence product,” Rothman says.

That is significant for this organization particularly since Sept. 11, 2001. Using BI dashboards to search for patterns in patient data helps EMA stay alert to a possible bioweapons attack. The organization set up what it calls the “syndromic system,” where BusinessObjects looks into patient files in eMARS and assigns them to groups based on medical complaints. Thresholds of cases can be set, beyond which a potential epidemic or bioattack may have taken place.

“Business process management and the introduction of BI into [BPERM] will open doors to the rest of the organization and put the technology into the hands of the people that will use it the most,” Rothman says.

Seeing the Future

Looking ahead, Rothman envisions the integration of the value of a metric tied to the processes behind the scenes that resulted in the metric value. For example, if a company’s sales reached $100,000 and the target was $80,000, Rothman would like the BI tool to incorporate some type of explanation as to why that’s a good thing.

“I think that these BI vendors are going to start to integrate commentary or action planning along with metric values and then give you an opportunity to see the direct impact these actions have on future metric values,” he says.

More industry consolidation is essential before arriving at the point Rothman anticipates. “As companies seek to wring more value and productivity from their existing resources and processes, the demand for both business process and business performance management solutions will increase, as will the need to link process-oriented cost data to the overall business performance management cycle,” forecasts Hyperion’s O’Rourke.

“This will drive more demand for business performance vendors to more closely integrate our solutions with those of the ERP vendors and special-purpose process management solutions, to provide a more complete solution that enables customers to drive continuous improvement in their business processes and cost structures,” says O’Rourke.

Also on the horizon from BPERM suppliers is a more intense focus on integration and efforts to put disparate, seemingly unrelated data into context, suggests Ventana Research’s Rogge.

Robyn L. Wright is a technology writer based in Phoenix. She can be reached via e-mail at rwright@softwaremag.com.