Speeding toward business visibility with BAM

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.

BAM Requirements

To better understand the emerging BAM and Business Performance Market, ebizQ conducted a series of on-line surveys. The key findings from these surveys were:

  • BAM market is still in the early states. The majority of respondents were either still in strategy development phase, or had no implementation plans at all yet.
  • It’s a business problem, not an IT problem. Most said that corporate culture and methods were the biggest obstacles – not technology.
  • Companies are looking for ways to become more responsive. When asked what they viewed as the most critical business challenges companies are tying to solve with this technology, overwhelmingly the most important was the ability to make the company more responsive and move from reactive to predictive mode – to be able to anticipate problems before they become problems. This capability requires real-time and predictive capabilities such as neural networks and inference engines. Increasing efficiency and automation was a distant second in order of importance, followed by managing customer satisfaction, loyalty and profitability, and enabling real-time decision making.
  • •
  • Most important among technical capabilities is complex event monitoring. When asked what they considered the most important technical capabilities of the solution, respondents answered that complex event monitoring and reporting was the most important capability (31%), and management dashboards was second (27%). Predictive capabilities and analytics were tied for third with 11% each.

BAM Market Overview

The BAM market is in a very early stage, and a number of different types of vendors are providing BAM solutions, including:

  • Pure play vendors which may focus on a type of capability such as dashboards, or a particular industry, such as financial performance management;
  • Integration platform vendors that are adding BAM to their stack just as they added BPM to their stack
  • BPM vendors, which may either offer only process level visibility or may offer complex event correlation across both processes managed by the BPM and external applications;
  • Business intelligence (BI) vendors, many of whom are now partnering with integration vendors to provide a BAM solution
  • Systems management vendors that provide operational level BAM, and
  • Application vendors that are instrumenting their applications for real-time visibility. Gartner predicts that by 2008, Business Software will account for 67 percent of the BAM market. However, ebizQ survey reveals that customers are looking for correlation of events across different applications.

While they all offer products labeled as BAM, it is clear from the variety of capabilities that among the vendor community there are many definitions of BAM. Some focus on dashboards, some focus on analytics, some focus on complex event processing and predictive capabilities, some focus on process level visibility.

The full BAM Market Segmentation includes an overview of 30 companies, and more vendors are coming to market with BAM offerings all the time. At the present time the market is still growing, more companies are coming forward with new offerings. This is another sign that the market is still in very early stages. Where are you with your BAM planning and implementation? Is this a technology trend you can afford to sit out on? Learn more at http://www.ebizq.net/trainingcenter/products/150.html.

About the Author

Beth Gold-Bernstein is an author and independent consultant specializing in SOA solutions. www.gold-bernstein.com.

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