Mike Ferguson wrote an interesting piece today on A Business Process and Performance Management Framework for the Intelligent Business over on the B-Eye network. He talks about the need to have a more coherent performance management stack to bring balanced scorecard (largely strategic) work and Six Sigma (largely operational) work together. This requires management at both the strategic and operational level with integrated objectives and results monitoring. Now it is true that operational people need to manage their performance also but they are far less likely to have the analytic skills implied in a typical performance management approach and, even if they do, they are unlikely to know the current business strategy well enough to interpret it correctly and so make the right decisions. After all, at an operational level, what matters are the customer treatment and other "front-line" decisions people make. Automating these decisions allows you to ensure that your strategy passes down to the front line.
When I read about performance management I hear a lot about dashboards, reports, KPIs and so on. This to me is all about performance monitoring. I cannot help but feel this is missing an opportunity. What if the systems being so carefully instrumented to provide these great reports and dashboards, were also easy to change? What if the people who see the dashboard and understand the importance of the KPIs could respond to them by logging on to a system and changing the way the systems, and thus the company, behave? What if your alerts were to tell you how your systems had responded not to ask you to respond? Decision technologies can be used to manage decisions in parallel with the technologies that let you monitor it allowing you to shift your CPM into action. Even Business Activity Monitoring assumes that a person must respond and that may well not be possible. Organizations must respond faster forcing them to become increasingly event-centric which means they need to be decision-centric also. This actually maps well to many people's vision of where business process management is going - Maureen Fleming of IDC, for instance, has a nice structure for this about which I blogged before.
Mike does end with a diagram that has rules at the center but I think he misses a trick by not talking about decisions and decision management as part of the operational environment.
For those of you confused by all the acronyms in this area, check out my acronym post and Mike wrote another excellent article some time ago called Building Intelligent Agents using Business Activity Monitoring for DM Review about which I blogged over on my other blog.
Technorati Tags: analytics, balanced scorecard, BAM, business activity monitoring, business rules, corporate performance management, CPM, customer decisions, decision management, monitoring, six sigma
 Subscribe to this blog by RSS
James,
Thank you for your kind words on my article. With respect to your comments on missing an opportunity, I would disagree. May I refer you to my article in March 2007 on "Decisions at Your Service" http://www.b-eye-network.co.uk/view-articles/4070. I this article Figure 5 refers to Decision Services available on demand on a service bus for automatic recommendations or as event-driven automated decision services that can take actions on behalf of the business. POerhaps the last diagram in my latest article should have shown BI, BAM and Decision Services at the centre of the enterprise. This was certainly my intention. Rules at the centre is however fundamental to success of both BAM and Decision Services. Without them what would determine the automated action? If I take Fair Isaac as an example of a vendor in the operational BI and Performance Management market then their BLAZE engine is central to that. The key here is that any actions must keep a business running optimally and also contribute to the strategic objectives of the enterprise otherwise automated actions could do more harm than good. For this reason any decision service must have data available to it that includes performance management targets, budgets etc. so that predictive models and action rules can in fact determine the business impact and take the right action as opposed to the wrong one.