Companies can improve their processes, slash costs and gain insight into operations through business performance management (BPM) tools. But there are considerable challenges to be surmounted, users said. That was the message here this week from those on hand at the DCI Performance Management Conference.
At a basic level, BPM utilizes business intelligence software such as a scorecard or an analytic application to enable a company to plan and perform performance analysis via a dashboard, said Craig Schiff, chairman of the conference and a speaker. While pieces of BPM have been around for some time -- typically as part of budgeting and financial processes -- the need for CEOs and CFOs to comply with the Sarbanes-Oxley accounting and reporting law has given the market a boost.
Once in place, a functioning BPM system can deliver a holistic view of business performance, Schiff said, allowing companies to do things such as identify new revenue opportunities and find cost savings.
But setting up a BPM process can be tough, said a half-dozen users. "The biggest challenge, and I don't care what kind of consultant you get or what you do, (is that) you truly have to understand what drives your business," said Celia Spitz, vice president of planning and analysis at Miami-based hospice services provider Vitas Healthcare Corp. Officials implementing a BPM system must decide "what the critical bits of information are that make a difference in a business. If you don't, that's just regurgitating data for analysis-paralysis and doesn't tell you anything."
Spitz's company uses a homegrown executive dashboard sitting over an onlin analytical processing tool from software maker Applix Inc., which is based in Westboro, Mass. The system has, among other things, helped Vitas Healthcare measure and reduce auto mileage and staffing costs.
Crucial to success is making sure key managers and senior management know that the BPM system, and the metrics to be tracked, are important to the business, and then getting their buy-in, said David Stack, manager of corporate financial planning and analysis at RSA Security Inc., a security software maker in Bedford, Mass. The company uses strategy implementation software from Comshare Inc., now part of Geac Computer Corp., to do product profitability forecasting and target setting and measurement.
While the software has paid for itself at RSA, measuring just how much return on investment the BPM system brings can be hard, as many performance improvements are qualitative, Stack said.
For medical products manufacturer Viasys Healthcare Inc., the most difficult part of rolling out its system was getting people to improve their processes and use the BPM blueprint to validate their data and improve operations, said Matt Gualtieri, finance project manager. The Conshohocken, Pa.-based company delivers manufacturing and financial reports based on BPM software maker Cartesis Inc.'s financial management system. Cartesis is based in Norwalk, Conn.
Viasys Healthcare also had to ensure that the data being added was in the proper format. Gualtieri said the efforts paid off.
"I think the pain and effort of going through implementing a system like this is worth it because it forces you to do things better," he said.