Business Performance and Optimization 

Gartner coined the term Business Activity Monitoring (BAM) in 2002 and defines BAM as “the concept of providing real-time access to critical business performance indicators, along with the supporting information to improve the speed and effectiveness of business operations.” Back then, the Gartner prediction was that by 2004, BAM will be one of the four top initiatives driving IT investment.

At this point, we are still in the early stages of the evolution of the BAM market. This past summer, ebizQ conducted an online survey in which 34 percent of the respondents indicated they are now developing a BAM plan or strategy, 29 percent said they have no current plans, 21 percent reported that they are in an early pilot or test phase, and less than 20 percent said they had already rolled out solutions. To learn more about the ebizQ BAM Market Segmentation, visit http://www.ebizq.net/trainingcenter/products/150.html

Market Segmentation

The study revealed a number of different working definitions of BAM. BAM solutions currently being offered do one or more of the following:

• Provide real-time monitoring of business events related to Key Performance Indicators (KPIs);
• Provide analytical capabilities and management dashboards;
• Provide complex event correlation;
• Provide predictive capabilities.

One vendor had a BAM product that included dashboard and analytics, and another for complex event processing. While both products were part of their business optimization division, they were extremely surprised that we would consider event correlation technology as part of BAM. At this early stage, the definition of BAM seems to be in the eyes of the beholder. But both the vendors and the buyers are clear on the purpose – to improve and optimize business performance.

Business optimization includes the discipline of defining, monitoring and managing key performance indicators. This discipline, which has been practiced long before the term BAM was coined, is alternately called business or corporate performance management. Business/corporate performance management is a combination of methodology, best practices and technology infrastructure. BAM is one of the technologies which enable business optimization.

There are, however, different levels of business optimization. In recent years, Business Process Management (BPM) has enabled process level optimization through real-time visibility into business processes that cross application and organizational boundaries, as well as simulation to optimize those processes. The next layer of optimization crosses processes and levels of the organization. This involves correlating business events to Key Performance Indicators (KPIs). This is the focus of BAM technology. Business optimization requires both levels of optimization. In fact, it can be argued that business optimization must be performed at all levels of the organization, from the operational IT level, through line of business managers, up to senior executives. All require visibility into the KPIs for which they are responsible. Additionally, alignment across all levels of the organization is required for overall business optimization. Otherwise, there is a risk that a company can optimize one process, and sub-optimize at an enterprise level. For this reason, we view both BAM and BPM as essential components of a business optimization strategy. Moreover, all levels of the organization require visibility into relevant KPIs.