Embracing Complexity: A Speedy Business Performance Management Solution

Applix provides a complete performance management software solution for finance and operations, without compromising its strong customer focus. The company has over 2,200 unique customers, and is growing at a steady rate. Aside from being top-rated in vendor satisfaction by BPM Partners Pulse Survey, Applix was ranked by The OLAP Survey as a leader in overall business benefits achieved by customers, and was ranked in the top three for customer loyalty.

Headquartered in Westborough, Massachusetts (US), Applix is a provider of business intelligence (BI) and business performance management (BPM) solutions. Incorporated in 1983, Applix first targeted software applications for the UNIX market. To capitalize on the emerging market, thirteen years later it acquired Sinper Corporation, an online analytical processing (OLAP) software developer. In 1998, Applix released its first TM1 product, followed by five subsequent releases, which aimed at enhancing its capabilities for performance management, Microsoft Excel integration, 64-bit platform support, and complex analysis. The Applix focus is to drive operational performance management by investing heavily in its TM1 product line. Operational BI (OBI) and performance management software provide the necessary shift from the traditional backward-looking view of BI, towards a forward-looking approach. OBI allows performance management functionality to be embedded in overall business operations. This takes the shift away from purely using BPM tools for financials, and creates the ability to leverage strengths provided by performance management software for use across the organization and to create alignment with an organization's business process flow.

Product Overview

Applix TM1 gives customers the ability to solve difficult business decisions and perform what-if analyses in a user-friendly environment, making it an above-average performance management solution. TM1 incorporates dashboards, workflow, and OLAP cubes in a fully integrated Excel and Web-enabled environment. Users are able to transfer their skill set seamlessly, due to the familiar interfaces. The product has an integration layer which connects easily to open database connectivity (ODBC), object linking and embedding database for OLAP (ODBO), SAP, and legacy data sources to capture the appropriate data, and has a powerful in-memory data management server engine to help accelerate query return times, thus improving performance. Additionally, TM1 dashboards, Web sheets, and OLAP cubes aid in planning, budgeting, and forecasting activities. TM1 enables complex data modeling and rules creation. Also, data can be updated in real time and reflected in Excel Web sheets, dashboards, and cubes, which can all be posted on the Web. TM1 uses its Web portal as a gateway for users across the organization, in order to allow them to exchange work items by viewing the same sets of data, and to manage decisions based on those data views. This allows TM1 users to collaborate on multiple tasks across the organization. Customizable dashboards and cubes help users analyze and answer defined business questions. This helps to drive potential opportunities (and to avoid risk), by identifying data patterns, collaborating with multiple task stakeholders, and creating business scenarios.
TM1 has the ability to perform powerful what-if analyses against large data sets, faster than many competitors. Applix TM1's complex analytical queries are dealt with in memory through the use of a 64-bit processing platform and a caching architecture, as opposed to having calculations stored within a server (disk space). The development of 64-bit processing represents a significant trend in BI, for accommodation of large amounts of data. The advent of 64-bit processing also allows data to be updated effectively in real time. Vendors such as Information Builders and MicroStrategy also have this capability, and Hyperion is working on developing a platform compatible with Microsoft. Compared with most performance management vendors, however, Applix has taken the lead in providing a platform that provides users with the ability to create complex queries quickly, and to reflect those results on a Web portal in real time. Additionally, calculations are performed in memory and not within a server environment, which contributes to the quick response times.

Applix TM1's integration with Excel is above average, and permits users to use spreadsheets as the basis for creating Web sheets and dashboards, and to post their data to the Web. TM1 has integrated the use of Excel into its BI platform. Multiple users across an organization or across multiple geographic locations are able to access published data sheets, to edit the sheets, and to have the data automatically written to the server and updated on the Web. Cubes empower users to analyze data by drilling through multidimensional data views, and by identifying trends as well as data sources. With TM1 cubes, an organization can post OLAP cubes to the Web in different forms, such as graphs or as data integrated with Excel.

TM1's analytical capabilities focus on providing users with user-friendly access to cubes and reports. As opposed to developing complex and robust cubes that are only used by one or two super-users, Applix TM1 allows users to create compact cubes to hone in on an organization's business questions and on developing user-friendly intuitive cubes that help answer essential questions, and that are accessible to anyone in the organization. This is done by limiting a cube's scope to between five and ten main dimensions, and by authorizing users to choose what dimensions are available to drill through. These cubes provide users with the functionality to edit, change, and transfer data to Excel; to post changes to the Web; and to view the updates in real time. Although cubes are usually designed with a limited number of dimensions for focusing on actual business questions, it is possible to reflect up to 256 dimensions, which makes it a robust analytical tool. Users can also identify what dimensions they want to view and drill through, as opposed to the dimensions that are reflected in the background but not viewed online.

TM1 Rules helps users define the cube rules, allowing for complex and repetitive calculations within each OLAP dimension. Users create cubes through wizards, giving business users primary control of their analytics (as opposed to relying on the information technology [IT] department). Cubes and the associated data are then connected via defined rules, and the cubes can be customized for maximum efficiency by using rules from multiple applications.
TM1 Planning Manager manages an organization's workflow processes to grant key decision makers administration and access privileges. Each assigned task can be edited to create collaboration between employees, departments, and projects. Users can be assigned tasks, be given access to change report data, and submit those changes to the appropriate decision maker for approval. The user tasks are then submitted as work items for approval based on a task list accessed by the appropriate decision maker. Approvals and rejections with comments are submitted and stored within the task process, and users can view the logs and resubmit any additional edits or changes.

TM1 Planning Template features a planning module that supports the ability to create budgets and identify top-down goals and bottom-up plans, with pre-built worksheets. The template structure can be modified to suit organizational needs, and it is possible to load information into the modified model.

TM1 Consolidations provides users with the ability to view financial and operational data in a centralized structure, from any number of organizational units and general ledgers (GLs). Several different views of data are possible, which gives users the ability to perform variance analyses of budget-to-actual data. Key features include full support for recurring and reversing journal entries, the ability to create customized journal entry reports, and built-in controls for the journal entry process (including automatic generation of inter-company elimination journals), as well as the ability to post journal entries over the Web in Internet Explorer.

The TM1 Financial Reporting module lets users set up reporting structures and create queries for their financial reporting requirements. Reports are built once, and automatically maintained within the structure of TM1. Reports are updated automatically, and financial data from multiple GL systems can be consolidated to represent one view of GL and general financial data in real time.

Product Challenges and Opportunities

Applix needs to develop scorecarding capabilities and the ability to set metrics within its application, in order to develop a successful long-term strategy and to stay competitive within the market. Most other performance management vendors offer these features within their main product offerings, including leading BI vendors such as Cognos, Hyperion, and Business Objects. Not having scorecarding capabilities is a major disadvantage for organizations that want to track and to structure their goals and performance requirements, and to measure them over time using one integrated software suite. To address this issue, Applix has become highly integrated with Microsoft's new scorecarding functionality and current integration abilities with Excel, to pave the way for continued integration with Microsoft BPM tools. Applix hopes that customers will choose to integrate the two, as opposed to choosing a solution that already has scorecarding capabilities. Additionally, Microsoft is working on enhancements to their BI tools, including enhanced dashboarding capabilities. Thus, the Applix goal of aligning itself closely with Microsoft could be overshadowed by prospects considering Microsoft for a full performance management suite which is intuitively integrated and competitively priced, and which could eclipse the benefits of implementing TM1.

The ability to define key performance indicators (KPIs) is also an important component of performance management. Currently Applix does not have built-in functionality defining structured key performance indicators that are aligned to an organization's corporate strategy. TM1 is planning to provide this feature with a future release; however, other solutions that already have this feature provide users with the opportunity to set strategic goals, align those goals to the business unit at each level, and measure performance to drive decisions. This means that organizations that want to drive decision-making intuitively based on their KPIs, may have to put more processes into place to achieve the same result as organizations implementing a solution with built-in scorecarding and KPI functionality.

Technology's Role in Strategic Human Resources

Most chief executive officers (CEOs) are challenging their human resources (HR) departments to make more strategic contributions to the organization. With HR traditionally viewed as a cost center, it is often difficult to know precisely what that means. CEOs, who are focused on growth, earnings, and shareholder returns, want HR to support corporate business objectives and to have the necessary data to support business decisions. These roles are necessarily integrated with HR's responsibility to ensure that there are qualified and satisfied workers when and where they are needed. The way to fulfill these roles is through process excellence, integrated HR systems, and accurate and actionable data from all HR departments. When these elements come together, HR can have a tremendous and meaningful impact on the bottom line.

It sounds like a lot to ask, but these demands are achievable today. And the HR department doesn't have to go it alone. There are technologies and service providers that can help move HR from the administrative rut, free up manpower for strategic tasks, and employ business intelligence capability to align HR with desired business outcomes.

The Role of Outsourcing

Human resources outsourcers play a critical role. Companies often choose to work with outsourcers to gain access to the latest technologies without having to make the associated capital investment. At most enterprises where HR functions have been outsourced, the initial tier of value is well-established. Processes are standardized and employee interactions are professionalized. Transactions are faster, more user-friendly, and less costly. As employee programs continually become more complex and difficult to administer, outsourcing consistently delivers high levels of service.

But it's that next critical tier where advanced HR outsourcing technologies are delivering strategic leverage by gathering and combining fragmented data from discrete vertical HR systems. When data from various departments is integrated into a reliable, consistent source of centralized information, HR can make better-informed and more strategic business decisions daily. The impacts of HR programs and practices can be assessed, and critical insights into the workforce revealed.

Sophisticated analytics can measure how HR systems and programs affect employee behavior and influence customer behavior (for example), ultimately impacting financial results and corporate growth. Companies are beginning to see that reducing HR administrative costs is only the tip of the iceberg. A new priority is to employ the technologies that provide data and analysis, in order to realize the savings that lie in HR.

For example, your time and attendance program tracks worker hours and absences, and is the entry process for generating payroll. A separate program handles short-term and long-term disability payments. Both of these systems are important. But viewed separately, they reinforce HR's traditional administrative role. An outsourcing solution that combines information from both systems and employs business intelligence functionality delivers a human asset management program that tracks absenteeism, peak work periods, and turnover. Now your data shows impacts on labor costs, overtime, and the amount of money spent on temps and employee replacement. This business intelligence can be used to closely align the workforce with long-term labor needs, manage absence and labor utilization, and thereby reduce operating costs.

Training, staffing, and recruiting programs can be linked in beneficial ways, too. There are lots of technology tools that enable prospective employees to submit r�sum�s online. But does your HR department use that information beyond the recruiting process? By integrating prospective employee data and skill sets against the company's development plan and training programs, qualified individuals can be "pipelined" into the organization over time, and existing staff can be educated. This ensures more strategic hiring decisions from the outside, and better use of existing personnel.

Succession planning is another key area where HR outsourcing can provide strategic value. For example, if a company has a 10 percent turnover rate, and it typically takes 30 days to fill a job, what does that mean for its staffing at any given point in time? It means the company is nearly one percent understaffed at all times. In an organization of 50,000 employees, that's 400 workers not meeting deadlines or producing, which negatively impacts customer satisfaction.

In that same scenario, add in the ramp-up time required for new hires to fill the open slots, and the "downtime" could be as much as sixty days per opening. Factor in absenteeism, short- and long-term disability, sabbaticals, maternity and paternity leave, job sharing, and other benefits, and the staffing levels are likely to be much lower than imagined. Using business intelligence technologies and analytics allows HR departments to better see and manage what is really happening with staffing levels, and predictive measurements can help plan more accurately for the normal ebbs and flows of business.

Selecting the Right Outsourcing Provider

As important as deciding to outsource HR functions, however, is selecting the right partner. Partnering with an HR provider is a critical business decision, and should be considered with the same due diligence as a merger or joint venture. Companies should be culturally compatible and share a common vision.

An outsourcing partner's service framework and delivery model should be engineered to meet your requirements, and there should be a clear definition of the scope of services and defined service levels. The objectives of outsourcing should be translated into service-level agreements so performance can be measured against stated expectations. Most large enterprises will want a full-service provider rather than one that handles just one element (such as payroll). References should be checked, and the provider should demonstrate capabilities in full-spectrum HR outsourcing (and have the financial backing to be around for the long term).

Remember, working with an outsourcer is not about giving up control. Rather, it is about finding the best ways to deliver quality service, impact organization economics, and provide the data that aligns the HR department with business outcomes.
In today's economic climate, all CEOs have a growth agenda that requires a solid and committed workforce—in other words, they need to have the right people in the right place at the right time. The true value of the human resource team will be measured in how well it aligns with this growth agenda. Effectively integrating HR business intelligence technologies is foundational to HR's metamorphosis from administrative cost center to strategic contributor to corporate growth.

Examples of Strategic HR

Here are some quick takes on how companies can strategically leverage HR for measurable gains. The impact areas and results in the list below are far from complete, and are provided here only as samples:

* Staffing levels: Aligning time tracking with disability and leave information fosters greater understanding of staffing needs.
* New hires: Melding r�sum� data with future business needs "pipelines" qualified individuals for impending job openings.
* Succession planning: Assessing skill sets of existing employees and overlaying it with upcoming job openings promotes hiring from within.
* Benefits cost: Integrating HR survey data with corporate goals can help predict changing corporate contribution rates that would result in more job turnover.
* Hiring assessments: Extracting data from various HR functions allows you to determine if increased hiring is due to growth and skill upgrades, or to unwanted turnover.

Essential Considerations When Selecting an Outsourcing Provider

Beyond general considerations with respect to the utility of outsourcing providers, there are specific questions which enable companies to determine the compatibility of a prospective provider:

* Do the provider's systems have the capabilities to meet specific technology and business requirements? Note that inadequacy with respect to this question can of course come on two counts: either the provider's systems are too "generic" to meet these specific requirements, or else (in the case where they do in fact address the particular requirements) they simply underperform.
* Does the outsourcer have a clear understanding of needed capabilities?
* Will the operation be transparent, both financially and managerially?
* Do the outsourcer and your company share a common vision?
* Does the outsourcer have a partnering mindset?
* Is the outsourcer's culture compatible with your corporate culture?
* Will the outsourcer be proactive in engaging your company to resolve problems?
* Are the scope of services and performance levels clearly defined in a service level agreement?
* Can the provider enable your company to deliver business performance impact?

Sybase and MicroStrategy Team on Vertical Market Portal Applications

"EMERYVILLE, Calif., Nov. 1 /PRNewswire/ -- Sybase�, Inc. (Nasdaq: SYBS) today announced a comprehensive, multi-year licensing, technology and service agreement with MicroStrategy Incorporated (Nasdaq: MSTR). The alliance offers customers MicroStrategy's Intelligent E-Business� software coupled with customer relationship management (CRM) and business performance management (BPM) applications. Under the terms of the partnership, Sybase will embed and re-market MicroStrategy Intelligent E-Business� Platform for the Industry Warehouse Studios� (IWS) offerings; thereby leveraging MicroStrategy's core analysis, personalization, and broadcast technology within Sybase's complement of analytical CRM and BPM applications". As stated by Eric Miles, senior vice president and general manager of Sybase's Business Intelligence Division, "As Sybase expands its growth in the business intelligence, CRM and BPM markets, it is critical to form strategic partnerships with companies that share our vision".

Each of the Sybase Industry Warehouse Studios consists of five analytical customer relationship management applications and one industry-specific module. The suite of six applications, designed for sophisticated, business performance management and customer relationship management include marketing campaign analysis, customer profile analysis, sales analysis, loyalty analysis, customer care analysis, and business performance management (the vertical component which delivers operational scorecards and analytical reports).

MicroStrategy powered versions of the Sybase Industry Warehouse Studios for Property & Casualty and Life Insurance, Telecommunications, Healthcare, Retail Banking, Credit Card Companies, and Capital Markets will be available during the first quarter of 2000 on UNIX and NT platforms. Industry Warehouse Studio applications start at $100,000 (US).
According to Sybase "The Company is leveraging core enterprise product strengths to capitalize on the emerging enterprise portal market to provide powerful new solutions that deliver on the promise of e-Business." Due to their decreasing hold on the overall database market, Sybase is attempting to focus vertically in an attempt to improve their profitability. (Sybase saw share value decrease 44% in 1998, revenues have decreased for the last two years, and they have suffered four years of negative earnings per share). MicroStrategy has been very successful in the portal arena, and their stock has appreciated over 300% in the last three months alone (at the time of this writing, the stock was selling at $94 per share). In addition to this agreement, MicroStrategy has also announced alliances with Unisys and NCR. If Sybase is successful in leveraging this marketing relationship, it should help restore some market confidence in the firm.

Business Objects Objects Again

Software developer Cognos Inc. said on May 9 that it will fight vigorously a patent infringement lawsuit filed by arch-rival Business Objects SA, a suit that it says is without merit.

Ottawa-based Cognos, one of the largest vendors of business intelligence software used to access and analyze corporate data, said the patent is "invalid" and "unenforceable". "I don't consider this to be a huge concern," said Brandon Osten, analyst at Sprott Securities. "Most of these lawsuits don't go too far...patents are very difficult to defend in technology."

France-based Business Objects filed suit on Friday in the northern district court in California. Cognos, which has retained law firms in both Canada and the U.S. for representation, said it believes its market leadership is a factor in the litigation. "Unfortunately, some technology companies use litigation in an attempt to achieve in the courtroom what they may find difficult in the marketplace," said Cognos chief executive Ron Zambonini in a statement. "This lawsuit is without merit and seeks to deflect attention from the fact that Business Objects has been unable to dislodge Cognos from its leadership."

The patent refers to the process in which data is retrieved from a database in answer to a query or question, said Cognos vice-president and general counsel John Jussup. Business Objects filed a similar patent action against California competitor Brio Technology Inc., which was settled in September, he added. "The speculation was rife in the market that we would be next on their list and since that time we've been preparing," Jussup said. "The fundament of our defense is that we were there before...it's essentially the been there, done that defense."
Brio Technology was forced to acknowledge the validity of Business Objects patent (U.S. Patent 5,555,403) and settle with Business Objects (for more information see Business Objects Outguns Brio Technology in Patent Dispute, September 13, 1999). Brio's 10Q statement included the following: "On September 9, 1999 Brio and Business Objects, S.A. executed a memorandum of understanding settling Business Objects' pending patent litigation against Brio involving patent number 5,555,403 for $10.0 million. Settlement costs of $9.1 million, which represent the net present value of the 10 quarterly payments, are included in non-recurring operating expenses for the nine months ended December 31, 1999. The remaining $900,000 represents interest and will be recognized over the payment term using the effective interest rate method."

Cognos will likely be forced to recognize the patent also, and will have to take a charge against earnings in order to pay the fines. Business Objects can argue that it holds the patents on the technology and Cognos has infringed on them. In addition, management at Cognos will undoubtedly be distracted for a time in dealing with the legal issues

Flexible Customer Data Integration Solution Adapts to Your Business Needs

Customer data integration (CDI) has become one of the buzzwords within the master data management (MDM) industry. Although the concept of creating a single organizational view of the customer is noble and desirable, its value should also be justified by organizations. To implement a customer data hub that only creates a centralized view of an organization's customer-related data does not affect a company's bottom line, unless business units have bought into the initiative and tie it to the organization's strategy. Customer turnover, collections, call centers, and marketing initiatives can be monitored, consolidated, and improved through CDI. However, to ensure successful CDI implementations, solutions should be driven and managed by the business units to ensure buy-in, and to increase the value associated with customer-related data.

In addition to the collaboration and buy-in needed to ensure a successful project, the type of CDI initiative and the architectural style chosen to implement it play important roles in the use and view of customer data. CDI hubs are used differently depending on the way they deliver information to users. It becomes important to choose a style compatible with the organization's current business needs, with the knowledge that these needs will change over time, and that as a result, the CDI architecture may change as well.

An Overview of Siperian's Product Offerings

Siperian is a leading San Mateo, California (US)-based CDI vendor for the health and life sciences industry. The vendor's solutions allow customers to create, consolidate, and present a single view of customer-related data based on their organizations' needs and maturity within their CDI or MDM environments. Siperian's product offerings reflect the business needs of organizations, and provide businesses with the ability to reduce operational costs and improve compliance when implemented in alignment with the organizations' business processes. This occurs through the management of customer-related data by creating a singular view of the customer across the organization, and by providing the appropriate views of that data to business units across the organization, based on their needs.

CDI hubs enable organizations to develop centralized customer data management structures, and to contribute to the ongoing data quality activities required to ensure successful CDI initiatives. Different hub styles, coupled with vendor product offerings, provide organizations with the ability to build and structure their customer information to enhance the customer experience, and to supply employees with the right information when they need it.

Siperian offers three products with differing architectural styles, namely Master Identity, Master Data Management, and Operational Views, to meet the varied requirements of an organization's customers based on the maturity of its CDI environment. These styles provide organizations with different benefits based on the way these organizations choose to apply CDI. Organizations may want a total approach to CDI immediately; that is, to manage their organization-wide CDI and MDM initiatives from the start. However, the implementation of a CDI initiative in stages provides organizations with stronger frameworks to develop and maintain their CDI environments and data quality initiatives over time.

Siperian's Master Identity offers organizations a master reference to link customer-related data across the organization. The Customer-Centric Master Data Management style creates a cross-reference to provide one version of customer data within the organization. This includes the cleansing of data to provide one version of the customer addresses, as well as other information that requires reconciliation across various systems. Customer-Centric Operational Views creates a virtual view of consolidated customer records based on customer transactions.
All three styles provide reliable master data to operational systems such as enterprise resource planning (ERP) and customer relationship management (CRM). Siperian also supports a "consolidation style," which relies on the centralized repository of reliable master data. This centralized repository supports downstream analytical environments, including reporting, analytics, and business intelligence (BI) systems.

Master Identity, through its Master Reference Manager� (MRM), identifies entities including customer, product, supplier, etc. Master Identity uses a "registry-style" approach to match and link records from different systems across the organization to create a "golden record." This record creates references based on attributes such as customer number, a combination of phone number and name, and other unique identifiers to link the various records across the organization, creating a central reference area to pool data.

The registry stores data that can be cross-referenced back to the source systems. This hub style may be accessed in real time, and provides read-only access to data as needed. This means that operational data stores are not affected, and that data can be accessed instantaneously across multiple business units, helping users within customer service and marketing departments access the required information. This type of architecture does not allow organizations to add or change data, as the data acts only as a reference point. Therefore, it is not advantageous for point-of-contact users, who are required to update operational systems.

Master Data Management (MDM), through Hierarchy Manager� (HM), manages and visualizes the relationships between these master data entities within the centralized customer repository. Based on this, a single, consolidated view of customer-related data can be presented, centralized, and managed from across multiple applications and lines of business. Corporate acquisitions provide a good example of how this architecture style can be applied to organizations. Hierarchy Manager identifies and consolidates the data from across multiple corporate entities to create a singular view. This architectural style allows individual or single organizations to manage their data quality activities across the organization, harmonizing the customer view across operational systems, and maintaining greater consistency across the organization. This provides the foundational building blocks to create a single view of the customer.

The third style, Operational Views, through Activity Manager� (AM), accesses the reliable master data in the centralized repository, and then aggregates and identifies the associated transactions and interactions that take place with the customer. A federated view of the data combines with the master data to reference and deliver a full view of the customer within the business context required, and writes back data to the operational systems to maintain a single view of data across the organization. Data is integrated and systems are built to leverage the data views without worrying about integration with existing systems. Large organizations with high transaction volumes use this style to manage customer-related transactions. Many organizations adopt this style as a natural outgrowth of the MDM approach, as they see the benefits of expanding their usage of CDI to include daily operations.

Product Strengths

Siperian's strengths are in its ability to match its offerings to an organization's business needs. In addition to offering three distinct hub styles, Siperian centers its offerings on the integration of an organization's CDI initiative with its overall data management strategy. This means that although Siperian focuses on providing solutions for a specific set of data, the vendor places importance on an organization's overall business processes and how its CDI requirements will grow.

Data Quality: Cost or Profit?

In the past year, TEC has published a number of articles about data quality. (Poor Data Quality Means A Waste of Money; The Hidden Role of Data Quality in E-Commerce Success; and, Continuous Data Quality Management: The Cornerstone of Zero-Latency Business Analytics.) This time our focus takes us to the specific domain of data quality within the customer relationship management (CRM) arena and how applications such as Interaction from Interface Software can help reduce the negative impact that poor data quality has on a CRM objective.

CRM is prone to more corrupt data than any other enterprise applications. Traditional back-office systems require a limited number of individuals to process data, whereas in CRM, almost everyone in an organization interacts with parts of the application. As a result, the probability of processing bad data increases. Ultimately, quality data is the foundation of successful CRM implementation and accurate customer intelligence. Past experience and research show that 50 to 70 percent of many CRM initiatives should be devoted to data quality. Consequently poor data quality hampers a company's ability to realize the return from their investment in a truly integrated CRM. Data quality, therefore, should not be considered a one-time exercise. It has to be integrated as a core element in managing a business.

Defective data quality leads to customer complaints and customer defection. Therefore, it is imperative to clearly define a standard for your data requirements and how these requirements should support specific business objectives. One common affliction of data quality is a result of the fast pace of business environments. Information is constantly evolving. People are constantly moving in and out of positions, and companies continually change their contact details. These results in a number of common issues involving

* Incorrect or inconsistent collections of customer details

* Duplicate records

* Inconsistent synchronization between multiple databases

* Multiple databases scattered throughout different departments or organizations, with data structured according to the particular rules of that database.

The duplication of data is the most common type of data quality issue. Customer record duplication is caused by a multitude of situations. It can occur from variations in spelling or assigning multiple addresses to the same customer profile. As a result, data becomes corrupted and is then misinterpreted. Having a customer in a database two or more times may create the impression that they are different customers. Businesses may lose money if, for example, they do a mailing campaign based on this customer base. Multiple letters sent to the same customer will double the cost of mailing and fulfillment and reduce company credibility in the eyes of customers.

The use of poor quality databases can also lead to the misinterpretation of a business operation by generating misleading customer analyses. Additionally, customer intelligence and customer behavior analyses are also used for fraud prevention and for customer retention. Therefore, unreliable data can lead to catastrophic results. As increasing evidence shows, business intelligence is key to CRM success and as demonstrated above, mining into poor quality databases has the completely opposite effect.
Alone, a stand-alone system is insufficient to tackle the underlying cause of poor data quality. Data quality should be considered a business issue and as such, businesses must create and institute enterprise-wide guidelines for data quality. A combination of people, process, and technology tools is required to establish data quality program.

With this said, an application's contribution to data cleansing remains a pillar to the overall success of a data quality strategy. Systems may implement a data cleansing method through the use of centralized data warehouses, the integration of data cleansing software, and the use of third-party data with the enterprise application. Overall, some of the available techniques are

* Data-validating process rules

* Centralized database

* Data cleansing technology

* Data scrubbing

Data scrubbing is the process of fixing or eliminating individual pieces of data that are incorrect, incomplete or duplicated before the data is passed to a data warehouse or another application. The aim of data scrubbing is two-fold: eliminate errors and redundancy, and bring uniformity to different data sets that may have been created with different or incompatible business rules. Data scrubbing can be considered a combination of technology and process. The business to business process (B2B) list provider Dun & Bradstreet (D&B) has developed a good example of a data scrubbing process. D&B has introduced a uniform coding methodology that associates each individual business with a D-U-N-S number. This number is unique and remains unchanged during the business' life span. D&B created this unique approach to reach and maintain uniformity within its own database. It also offers its customers the same service on a regular basis.

Another approach to achieve high-quality data is the use of program tools developed for managing data quality. These tools fulfill the objective of auditing, cleaning, and monitoring data. Companies may opt to develop tools in-house or to acquire a third party tool from a vendor specializing in data cleansing tools. A majority of data warehouse and business-intelligence vendors such as SAS Institute, Informatica, Experian, and Group 1 Software provide data cleansing options that sit on top of their database. FirstLogic and Ascential Software, which also have this feature, are considered by the market to be among the data quality oriented vendors.

Business Performance Management Basics: An Overview of Business Performance Management and Its Benefits to the Organization

The market uses the terms business performance management (BPM), corporate performance management (CPM), and enterprise performance management (EPM) interchangeably. Vendors and industry analysts use these terms to describe performance management, but essentially they all mean the same thing. BPM represents the next generation of business intelligence (BI), and is defined as the use of software to help organizations manage their processes and measure their key performance indicators (KPIs) in order to optimize performance and help drive corporate strategy.

This article will focus on the key aspects to take into account, when considering implementation of performance management software:

* the way KPIs are defined by an organization's focus
* the meaning and importance of data mining
* the importance of scorecards and dashboards in driving business decisions
* the benefits and challenges of implementing a BPM solution

Other areas of performance management, as well as product notes identifying software relevant to the performance management industry, will be discussed in subsequent articles.

Business Performance Management versus Business Intelligence: A Brief Overview

BPM applications allow organizations to implement an approach to data analysis. Data mining tools identify trends and enable organizations to plan intelligently for the future. Additionally, performance management software provides organizations with visualization features (such as dashboards) which give them the opportunity to view summarized data and to drill down to operational data stores for relevant details. This differs from traditional BI software, which identifies data patterns by using historical rolling data to drill down on dimensional data over time.

Traditionally, organizations developed month-end processes to generate financial reports or queried data at specific intervals, in order to provide data to decision makers throughout the organization. Additionally, throughout the organization, reporting processes were implemented to provide users and decision makers with regular static reports over time. With increases in competition and potential client bases (due to globalization and technological advances), organizational needs have evolved, and require more powerful reporting tools to capture significantly higher amounts of data more often. Businesses are shifting to accommodate increased data demands, and are attempting to become proactive in their corporate planning. The realization that BI and data warehousing concepts can be leveraged to drive business decisions has helped drive the evolution of BI towards encompassing business performance functionality.
The terms KPI and data mining are often used to discuss the benefits of BPM and the ways in which BPM drives business decisions. Knowing what those terms mean, however, does not alone guarantee business success. Instead, organizations should identify appropriate ways to apply KPI and data mining, in order to determine the metrics required for making the right strategic decisions.

KPIs are defined as the critical metrics set by an organization to reflect its financial or nonfinancial success. They help organizations identify and monitor factors that are quantifiable, measurable, and important to the organization's overall success. Although KPIs can help drive business decisions, they are only beneficial if they are set properly and reach the right people at the right time. For example, with traditional BI online analytical processing (OLAP) cubes, sales data can be reflected multidimensionally with rolling sales data over a three-year period. This, however, pales in comparison to dashboard functionality, which allows a sales manager to see up-to-date sales figures in real time, and to compare them against predefined metrics. The sales manager can then drill down on the data to access and analyze operational data, in order to determine a plan of action.

KPIs vary, depending on the function of an organization. A nonprofit company may want to measure the ratio of graduates to overall participation for a specific volunteer training course, in order to identify the success of a program. However, a sales-oriented corporation may want to set metrics to identify the amount of revenue generated by return customers. To increase sales, a KPI measuring customer satisfaction and repeat sales might be implemented. For a financial institution, it may be important to set KPIs to identify potential risk management issues, such as meeting regulatory requirements or minimizing the potential credit risks of clients. This differs from a manufacturing organization that needs to monitor parts delivered from suppliers, or from a government body that wants to measure and improve employee performance. Setting the right KPI and providing that information to the right people can make the difference between implementing a successful BPM tool and a total failure.

Data mining, also called knowledge discovery in databases (KDD), uncovers data patterns within databases. It is used as a tool to discover patterns among large amounts of data. Data mining allows organizations to identify why things happen, and helps them make connections between seemingly unrelated items. For example, if an organization wants to increase sales, identifying customer buying patterns with intuitive software saves time, and allows decision makers to focus on developing strategies based on those patterns (as opposed to spending their time identifying what those patterns are). A credit card company may want to identify buying patterns and spending habits of customers, and an organization in the pharmaceuticals industry may choose to create a KPI to improve their manufacturing process and inventory control.

Data mining can also be used to find patterns among multiple tables within relational databases. This is advantageous because data centralization (and having one view of corporate data) enables organizations to set the appropriate metrics. Data mining also allows them to measure these metrics more easily, find patterns which enable proactive corporate planning, and target customers based on pattern recognition.

Before identifying more ways in which BPM can benefit an organization, it is important to identify the user interface components, to show how organizations are using performance management software.

Acta Technology Helps Add Business Intelligence Capabilities to Major ERP Vendors

"Montreal, Quebec--December 14, 1999 - Sand Technology Systems International Inc. (NASDAQ: SNDT), a leading provider of business intelligence (BI) solutions, announced today that it is partnering with Acta Technology, Inc. (Acta�) to provide guaranteed and cost-effective BI results for users of SAP R/3. Acta is a leading provider of data warehousing solutions for both internal decision support and business-to-business eCommerce. SAP R/3 is the widely implemented ERP (enterprise resource planning) system from SAP (NYSE: SAP). Both Sand and Acta will be featuring the Nucleus RapidMarts as preferred solutions for the increasing numbers of customers seeking effective ways to handle BI applications with SAP. Using the power of Sand Technology's Nucleus Exploration�, Acta's RapidMarts�,a suite of packaged data marts for analysis in specific business areas, can be quickly implemented without ABAP programmers and without the extensive expertise and hardware typically required for SAP BI implementations. Using Nucleus, RapidMarts also allow for the full integration of decision support applications involving both SAP and non-SAP data. The Nucleus-powered RapidMarts are available for a broad range of SAP applications, including Cost Analysis, Sales Analysis, Human Resources, Inventory Management, and Account Analysis. RapidMarts are powered by ActaWorks�, Acta's award-winning extraction, transformation, and loading (ETL) platform (DBMS Magazine: Editor's Choice)."
As customers increasingly realize how difficult it is to extract value from the data in their ERP systems, the need for products that can move this information into integrated, enterprise-wide data warehouses and tighter-focus data marts has become increasingly evident. Acta has specialized in the Extract/Transform/Load (ETL) of data from ERP databases for 5 years, and has active alliances with SAP and PeopleSoft. Acta's SAP BW (Business Information Warehouse) interface has also been certified by SAP. Sand Technology's vertical focus should allow a tight integration between the products.

ow Can Business Intelligence Benefit Small to Medium Businesses? An Interview with Todd Rowe of Business Objects

What's the hottest type of software in the small to medium business (SMB) market? A recent Gartner survey of a thousand chief information officers (CIOs) of mid-sized firms showed that the number one software solution they planned to purchase in the coming year was business intelligence (BI).

So what can BI do for your company?

BI can help you compete more effectively with your bigger competitors by enabling you to make better and faster decisions. It can extend and strengthen the functionality of your existing enterprise resource planning (ERP) and customer relationship management (CRM) systems. It can help put the past into useful perspective while allowing you to effectively plan for the future. It can help make sense of all the disparate data that flows through your organization, so that your senior executives have the right information at the right time to grow the business and increase the bottom line.

To find out more about BI for SMBs, download TEC's latest podcast, How Can Business Intelligence Benefit Small to Medium Businesses? Senior TEC analyst Lyndsay Wise, in conversation with Todd Rowe, vice president and general manager of leading BI vendor Business Objects, discusses the nature of BI, why it's become so hot in the SMB market, the pain points that BI addresses, and the right time to opt for a BI solution.

Click here to download How Can Business Intelligence Benefit Small to Medium Businesses? now.

This podcast examines the following questions:

What exactly is BI, and how can it benefit SMBs?
What are the major pain points that BI addresses and resolves?
What has changed in the marketplace to make BI such a hot product for SMBs?
When is the best time for an SMB to take advantage of a BI solution?
Podcast Transcript

Hi, and welcome to TEC Radio. My name is Lyndsay Wise. With me today is Todd Rowe. Todd Rowe is the vice president and general manager for the worldwide mid-market division at Business Objects. With Todd, we will be discussing what business intelligence [BI] is, and how and why it can benefit small and mid-sized companies.

Lyndsay Wise: Hi Todd, welcome to the show.

Todd Rowe: Thank you.
LW: What is business intelligence, and how can it benefit small and mid-sized companies specifically?

TR: Good question. So, what is business intelligence overall? It's taking the various disparate pieces of data that small and mid-sized companies produce, and trying to provide some type of insight or ability to determine what is the most important data to make intelligent decisions on. What business intelligence does is, it'll interact with different business applications, and by virtue of different tools like reports or dashboards or scorecards, be able to help guide an executive through all the morass of different data to the data that's most important, so that he or she can make more intelligent, more effective decisions on a daily basis that help build and run their businesses.

Small or mid-sized companies pride themselves on being much more agile, much quicker to make decisions than their big company counterparts. So, not only more effective decisions, but time to decisions is important in terms of differentiating small companies to work more quickly and [to be] more agile against their large enterprise counterparts.

What we find, according to Gartner, is that in this recent survey of one thousand [chief information officers] CIOs from mid-sized companies, that the top technology segment that they planned on purchasing in the coming year was business intelligence. That was the same from the previous year as well. So business intelligence is becoming a hot technology for small and mid-sized companies, precisely because it gives them an ability to differentiate themselves from their competition given the greater insight into the data, and making more effective decisions.

LW: Todd, what do you feel has changed in the market to explain why business intelligence is becoming so hot for small and mid-sized companies?

TR: Well, the last three or four or five years, you've seen small and mid-sized companies purchasing and implementing some type of business application. It could be an [enterprise resource planning] ERP system [or] a [customer relationship management] CRM [system]; it could be supply-chain, something that helps them in terms of just the transactional aspects of their business. Those business applications are producing a significant amount of data, and now the [chief executive officer] CEO, the VP of sales, or head of marketing, is left with determining, of all this information, “What is most important for me, and how do I get a pulse of my company's business on a daily or weekly basis here?”

... Why business intelligence has become important for small or mid-sized companies is [because of] three reasons: Number one, business intelligence will interact with and be integrated with applications like ERP or CRM easily, so it's a low-cost way of integrating into existing IT infrastructure for that small or mid-sized company CIO's responsibility. Secondly, business intelligence provides that insight into the company's business that other business applications don't. So ERP or CRM can tell you transactional elements or who the customers are, but it doesn't yet tell you about who are the most important customers, how do you segment those, and how do you create marketing campaigns. The third reason why business intelligence has become important to small or mid-sized companies is finally, with the advent of mid-market–specific products that companies like Business Objects have launched, you now have product that is much more accessible in terms of pricing and ease of use, so that you no longer have to be an expert in business intelligence.

Business Intelligence Success, Lessons Learned

A recent, extensive 269 pages industry report, OLAP 3 (published November 2003) by Nigel Pendse explains that BI benefits are very real. While the report covers many aspects of OLAP and BI, we will focus on business benefits and overcoming the obstacles of achieving those benefits.

According to the report, approximately 19 percent of companies implementing BI claim they have met or exceeded their business goals. Over 60 percent state they have at least largely met their goals. As always, soft benefits were more easily obtainable than hard benefits. A detailed look at the types of benefits reveals the following:

Benefit	% Companies Realizing Benefit
Faster, more accurate reporting	81
Improved decision making	78
Improved customer service	56
Increased revenue	49
Savings in non-IT costs	50
IT savings	40

When the statistics on benefits from a BI investment are compared to those of ERP or SCM investments, we see that BI appears significantly more beneficial. However, it is likely the combination of the ERP or SCM investment and BI generate the benefits because benefits imbedded in the ERP or SCM system cannot be unearthed without the BI tools to dig them out. Moreover, a common opinion on ERP and SCM software is that they generate too much data. BI allows this data to be analyzed to bring forward the most important aspects of the data.

Certain application areas are more widespread than others. The most common applications areas for BI are

1. General data warehouse reporting
2. Sales and marketing analysis
3. Planning and forecasting
4. Financial consolidation
5. Statutory reporting
6. Budgeting
7. Profitability analysis

The implementation of a BI project is not without challenges. Although the selection of the BI product is important, many of the major challenges remain internal. The number one major non-product challenge includes company politics. Experience has shown that single department implementations are less challenging but often result in fragmented, non-integrated approaches that, in the long run, increase interdepartmental issues instead of simplifying them. Experience also tells us that, as with many enterprise projects, those projects crossing department boundaries typically yield a greater value than departmental specific projects.

As with any project, the user is very important and the interest of the user must be considered key to project success. The factor of ease-of-use for users is critical in both product selection and overall success. The OLAP 3 report indicates that the inability to get users to agree on requirements is a common problem with BI implementations and if the requirements are agreed upon, staying the course without changing the requirements proves difficult.

In the report, the most common product issue was response time. This includes the inability of the product to function effectively with large databases. Another limitation that is both a product and architectural issue is the ability to include various data sources in the overall project.
When companies were asked what they considered important in product selection, they answered with the following priorities:

1. Functionality
2. End-user ease-of-use
3. Integration to existing applications
4. Price
5. Performance
6. Ease-of-use for application builders

However, when correlated with success factors, a proof-of-concept completed rapidly proves second only to performance as a key criterion for product selection.

Additionally, implementation leadership has a direct impact on project success. Projects led by BI specialist consulting firms are the most successful and have fewer problems. However, the most widely used implementation resource is in-house. Projects led by in-house business users are more successful than those led by in-house IT specialists. Projects led by large, general-purpose consulting firms cost more, are the least successful in business terms and experience the most problems. There is little correlation between project success and consulting dollars.

Strong evidence supports that the more quickly projects are rolled out are more successful. Experience also shows that integration into existing applications, prepackaged analytics and ease-of-use are key to compressing the implementation cycle.

How Can Business Intelligence Benefit Small to Medium Businesses?

What's the hottest type of software in the small to medium business (SMB) market? A recent Gartner survey of a thousand chief information officers (CIOs) of midsized firms showed that the number one software solution they planned to purchase in the coming year was business intelligence (BI) .

So what can BI do for your company?

BI can help you compete more effectively with your bigger competitors by enabling you to make better and faster decisions. It can extend and strengthen the functionality of your existing enterprise resource planning (ERP) and customer relationship management (CRM) systems. It can help put the past into useful perspective while allowing you to effectively plan for the future. It can help make sense of all the disparate data that flows through your organization, so that your senior executives have the right information at the right time to grow the business and increase the bottom line.

To find out more about BI for SMBs, download TEC's latest podcast, How Can Business Intelligence Benefit Small to Medium Businesses? Senior TEC analyst Lyndsay Wise, in conversation with Todd Rowe, vice president and general manager of leading BI vendor Business Objects, a, discusses the nature of BI, why it's become so hot in the SMB market, the pain points that BI addresses, and the right time to opt for a BI solution.

This podcast examines the following questions:

* What exactly is BI, and how can it benefit SMBs?
* What are the major pain points that BI addresses and resolves?
* What has changed in the marketplace to make BI such a hot product for SMBs?
* When is the best time for an SMB to take advantage of a BI solution?

Click here to download How Can Business Intelligence Benefit Small to Medium Businesses? now
Hi, and welcome to TEC Radio. My name is Lyndsay Wise. With me today is Todd Rowe. Todd Rowe is the vice president and general manager for the worldwide mid-market division at Business Objects. With Todd, we will be discussing what business intelligence [BI] is, and how and why it can benefit small and midsized companies.

Lyndsay Wise: Hi Todd, welcome to the show.

Todd Rowe: Thank you.

LW: What is business intelligence, and how can it benefit small and midsized companies specifically?

TR: Good question. So, what is business intelligence overall? It's taking the various disparate pieces of data that small and midsized companies produce, and trying to provide some type of insight or ability to determine what is the most important data to make intelligent decisions on. What business intelligence does is, it'll interact with different business applications, and by virtue of different tools like reports or dashboards or scorecards, be able to help guide an executive through all the morass of different data to the data that's most important, so that he or she can make more intelligent, more effective decisions on a daily basis that help build and run their businesses.

Small or midsized companies pride themselves on being much more agile, much quicker to make decisions than their big company counterparts. So, not only more effective decisions, but time to decisions is important in terms of differentiating small companies to work more quickly and [to be] more agile against their large enterprise counterparts.

What we find, according to Gartner, is that in this recent survey of one thousand [chief information officers] CIOs from midsized companies, that the top technology segment that they planned on purchasing in the coming year was business intelligence. That was the same from the previous year as well. So business intelligence is becoming a hot technology for small and midsized companies, precisely because it gives them an ability to differentiate themselves from their competition given the greater insight into the data, and making more effective decisions.

LW: Todd, what do you feel has changed in the market to explain why business intelligence is becoming so hot for small and midsized companies?

TR: Well, the last three or four or five years, you've seen small and midsized companies purchasing and implementing some type of business application. It could be an [enterprise resource planning] ERP system [or] a [customer relationship management] CRM [system]; it could be supply-chain, something that helps them in terms of just the transactional aspects of their business. Those business applications are producing a significant amount of data, and now the [chief executive officer] CEO, the VP of sales, or head of marketing, is left with determining, of all this information, “What is most important for me, and how do I get a pulse of my company's business on a daily or weekly basis here?”
... Why business intelligence has become important for small or midsized companies is [because of] three reasons: Number one, business intelligence will interact with and be integrated with applications like ERP or CRM easily, so it's a low-cost way of integrating into existing IT infrastructure for that small or midsized company CIO's responsibility. Secondly, business intelligence provides that insight into the company's business that other business applications don't. So ERP or CRM can tell you transactional elements or who the customers are, but it doesn't yet tell you about who are the most important customers, how do you segment those, and how do you create marketing campaigns. The third reason why business intelligence has become important to small or midsized companies is finally, with the advent of mid-market–specific products that companies like Business Objects have launched, you now have product that is much more accessible in terms of pricing and ease of use, so that you no longer have to be an expert in business intelligence.

Even small or midsized companies that are migrating from simple spreadsheets now can use business intelligence. The great thing about this is we've now seen a democratization of business intelligence. It's no longer just the domain of the privileged few enterprise companies; now small and midsized companies can use that to build and run their businesses.

LW: And what are some of your customers' biggest pain points in terms of business intelligence and issues that they help them resolve?

TR: The customer's biggest pain points are twofold. Number one is, “Help me with my blind-spots. Tell me what I don't know. What are the things that are going to come back and bite me so that I can be better prepared for that?”

Second big pain point is, “Don't tell me just historically what's happened in the past; I don't need business intelligence to just be a rearview mirror perspective. What I need is business intelligence to help be a dashboard, a view into the future that, if I do these things, here are the implications. If I do these different initiatives, here's the potential positive impact it could have on my business.”

So business intelligence will help identify either trends or areas where it can provide an alert to executives about what their potential blind spots could be. Now, they could be negative blind spots, like hey, certain suppliers are no longer supplying you with your inventory; you've got stockouts, and you're losing revenue here. Or they could be positive blind spots, like, you've had a significant uptick in the acceptance of marketing campaigns or of a new product, and if you sold more of these things, you'd have greater top-line revenue.

The other aspect of how business intelligence helps is, it's not only just a historian telling you what's happened in the past. With things like dashboards or scorecards, it allows a company to look more into the future and take a proactive look, with planning and budgeting of technology that allows a company to say, “Over the coming year, if I launch this product, or if I go into this new market, what is the potential upside revenue? What's the impact upon my profit margin? How would I compete relative to others there?” It helps them build and run their business in the future.

So we cannot only be a historian and looking at the past. What the CEOs care about as well is, “Use business intelligence as a tool to build my business here for the next two or three years as well.” And that's partly why you're seeing such a surge of interest and use of business intelligence in small and midsized companies.

5 Things You Should Not Confuse Business Performance Management With

Apr
24
5 Things You Should Not Confuse Business Performance Management With
Filed Under (BI and Performance Management) by TEC Team (see bio) , Gabriel Gheorghiu and Aleksey Osintev


If you search for business performance management (BPM) on Google, you’ll get around 700,000 results. Out of this huge number of results, you will presumably refer to a popular source—Wikipedia. According to Wikipedia, BPM is “a set of processes that help organizations optimize their business performance.” The same source affirms that some people see it as the next generation of business intelligence (BI). Both of these explanations—unfortunately—lack clarity.

Going back to the Google search, there are a few near-synonyms for BPM that one can choose from: business intelligence performance management, performance management scorecard, key performance indicators, and business performance metrics. Similarly, Wikipedia has four synonyms for BPM as well, including corporate performance management (CPM), enterprise performance management (EPM), operational performance management (OPM), and business performance optimization (BPO).

Confused? Is it BI, a set of processes, scorecards, performance indicators, metrics, or are all these equally valid parts of BPM? Since we intend to write a series of articles on BPM, we thought we might start this thread a bit differently and first try to explain what BPM should not be confused with.

1. Business Performance Management (BPM)
There is always a kind of confusion when using the same acronym (BPM) for different software packages (i.e., business performance management and business process management). In spite of the undoubted links between these two application types, they differ greatly for the majority of software users and IT professionals. Broadly speaking, a generic business process management system allows analysts and business managers to design and model business processes in a graphical and descriptive view, then execute them, monitor the processes, and finally, modify or optimize them.

There are similarities between business process management systems and enterprise application integration software and workflow automation solutions. By the way, notice yet another BPM abbreviation here: business process modeling, which is a substantial element of business process management. This is basically a business process capturing, visualizing, and description technique (or set of techniques) that provides companies a clear view on processes and helps them to analyze these processes in order to improve them.

2. Business Intelligence (BI)
Is BI part of BPM? Definitely! You can make any kind of business decision based on accurate information, and the efficient way to get that information is through a BI tool. Still, BI is not enough. The best BI tool in the world can give you the greatest dashboards, graphs, ad hoc reports, and so on, but they are completely useless unless you have a good idea of what to do with them.

It is safe to say that BI is the framework or the tool that will help you improve your business, but it will not complete this task for you. This is where BPM comes into play. A BPM provider should be able to support you in defining your business processes and objectives, as well as the metrics or key performance indicators (KPIs) you need to follow. Furthermore, your BPM provider will assist you in building the tools you need in order to extract the right data from the right place and then interpret it according to the already defined objectives.

3. Balanced Scorecard, Business Process Measurement, and Key Performance Indicators
When talking about business performance management, we should clearly understand that it is possible to successfully manage “something” as long as that “something” can be measured. In other words, in order to estimate how well your business is doing, some formal methodologies, criteria, and metrics are required.

However, it is not enough to estimate your company’s achievements using financial criteria only. There are other important activities which (while difficult to quantify and evaluate) are necessary to compare and evaluate in order to have a more complete picture. Balanced scorecard, business process measurement, and KPIs were developed as a systematic approach to help managers of all levels effectively control the company or departments within the company and to be able to quickly react to market and environmental changes and challenges.

These three concepts are really closely related to each other, but represent different views of the same process. Balanced scorecard is used mostly by the top management level of a company to monitor overall business performance towards strategic goals of the company. Mid-level and operation management usually use business process measurement parameters to visually examine routine and day-to-day processes towards short-time or current goals of the department or organization. Both of these methods utilize KPIs as a metric to count and analyze countable and often uncountable criteria. Those indicators usually look like set of diagrams and graphs that fluctuate dynamically depending on how the numbers change. Sometimes these sets of diagrams are called dashboards (using the analogy of a car or plane dashboard with a number of gauges on them).

4. Total Quality Management (TQM), Lean, and Six Sigma
At a first glance, these mechanisms, methodologies, and concepts can be referred to as different types of business process management. They reflect different views of the same core business processes improvement and talk about product, process, customer satisfaction, quality, and practical techniques to plan, organize, and control this process. They all consider business processes improvement as a global strategic goal and, as a result, companies achieve better financial numbers.

Certainly they are not the same things. While there are plenty of books, articles, and Web sites available to help readers understand the concepts, at the same time the non-dedicated reader who isn’t a professional in these concepts can easily become confused in this ocean of information.

Generally speaking, total quality management, lean, and six sigma as methodologies are much wider and deeper in substance than business performance management—which is a very useful and helpful way to estimate the current business and financial situation of an organization, as well as providing food for thought for managers at all levels to assist them in optimal decision making.

5. Reporting and Analytics
An in-depth explanation of the difference between BI versus reporting and analytics exceeds the scope of this post. So we’ll make this part short but sweet: analytics is complex reporting, while BI is a sophisticated reporting and analytics tool.

Most accounting, enterprise resource planning (ERP), customer relationship management (CRM), supply chain management (SCM), product lifecycle management (PLM), solutions offer reports, and most of them even allow you to do analysis on sales, purchases, productivity, and more. As our jobs are becoming very information-intensive, reporting, analytics, and BI are essential to today’s workforce.

Reporting and analytics tools do not always provide data in a format that can be used by a BPM product. Oftentimes, information comes from a variety of sources and—just to make things worse—different tools are used to extract it. A BPM tool should be able to gather all the required data from all available sources and convert it into a format that can be used in the decision process.

To Be Continued…
Five years ago, the BPM Standards Group was created by IBM, SAP AG, Hyperion Solutions Corp., IDC, Meta Group, The Data Warehousing Institute, and BPM Partners Inc. One of its goals was to properly define BPM and to create standards for it.

Vendor Rating and Certification Updates: BI and ERP

It’s mid-November and time to tell you about some of the new product ratings and certifications that we’re covering in our research. TEC analysts recently completed certifying products from BatchMaster and Targit.

Each vendor successfully demonstrated how its product addressed a script of functionality as identified by TEC analysts. (Look for products proudly wearing the TEC certification badge in our evaluation centers and vendor showcase.)

* The Targit BI Suite, with its “few click” approach is covered in our BI Evaluation Center.
* The BatchMaster Enterprise solution focuses on the requirements of companies in the process manufacturing industry, as covered in our ERP Evaluation Center.

In addition to those TEC certified products, we also published new data about the following products.

* Newly revised data on the OpenAir professional services automation suite.
* Webcom joined our Business Process Management (BPM) Evaluation Center with the submission of its ResponsAbility product.
* Software development and QA company, Technosoft, joined our outsourcing evaluation center.

Project Management Office: Framework Strategy

This report describes an overall strategy that will enable most organizations involved in the utilization of project management "best practices" to improve their project outcomes by establishing a centralized project management office (PMO) framework strategy. Typically, most large corporations drive their IT initiatives in a silo fashion, by department or division, using the project management standards, guidelines, tools, and techniques of their own choosing. Often each of these silos maintain their own PMO, frequently referred to as satellite project management offices.

An enterprise-wide PMO framework strategy, as described in the following sections, has been developed through extensive research and information gathering sessions facilitated by TEC and by adopting the Project Management Institute's (PMI) A Guide to the Project Management Body of Knowledge (PMBOK�) standards and the Capability Maturity Model Integration (CMMI) specific to IT initiatives published by the Carnegie Mellon University Software Engineering Institute. The findings and recommendations described within this document were developed through the collaboration of analyst team members at Technology Evaluation Centers Inc. (TEC) and input from external subject matter experts.

These recommendations, when suitably implemented, will deliver a robust and scalable project management framework strategy for both internal and external IT initiatives across the enterprise.

Introduction

Technology is driving fundamental changes at every level of society—from how people shop, bank, travel, and play to how businesses organize and compete. Out of these changes a new business environment is emerging, in which the leading companies are those that can harness the power of the Internet and other technologies to reach more customers, manage their business more efficiently, to effectively address governance compliance and manage risk and how the stakeholders (employees, partners, vendors, and customers) interact. The research findings at TEC explain how to thrive in this new world, wherein businesses must embrace information technology (IT) across their enterprise.

It is becoming more evident that service and product providers must shift their strategic emphasis toward the application and exploitation of information technology in order to remain competitive.

Enhancing the performance of the technology environment of an organization is frequently achieved through the implementation of good project management principles and practices. Projects are a means to respond to requests that cannot be reasonably addressed within the organization's normal operational limits.

Some of the industries most affected by large and complex IT projects are the financial and health care sectors due to their large size and ever changing needs. Other drivers include the advent of new compliance requirements such as Sarbanes-Oxley SOX 404, Basel II, HIPAA, SAS 70 and the like. Typically, these requirements involve the implementation of IT controls and the associated business processes these controls support.

The most effective way to achieve and sustain regulatory compliance is through the automation of business processes, i.e. IT projects. Many enterprise applications are impacted by these internal controls from financials, enterprise content management, business intelligence to information security, it is often challenging to establish strategic IT initiatives that will achieve full compliance.

This shift in focus from work being performed by operations to work being performed through projects requires that an organization establish standard project management practices, including best practices, consistent processes, standards, guidelines, tools, and templates. To ensure consistency of execution and reporting, the organization must also provide appropriate project management training and a data repository for the timely and appropriate generation, collection, dissemination, storage, and ultimate disposition of project information.

This can be achieved through the implementation of a centralized project management office (PMO), often referred to as the project management center of excellence (PM-COE).

Strategic Report Overview

The ffollowing sections describes a structured framework for the successful implementation of a PM-COE/PMO for internal technology groups to effectively deliver on IT initiatives under the triple constraints—time, cost, and quality. The recommended framework is based on TEC's PMO model, which is consistent with the Project Management Institute's A Guide to the Project Management Body of Knowledge (PMBOK�). The PMBOK� provides a widely accepted reference for standards and guidelines, terminology, industry best practices, and knowledge of proven project management principles. The information provided in the PMBOK� describes the generally accepted knowledge and practices that should be applied to most projects, most of the time. The project management analyst team at TEC has adopted this framework strategy in combination with client specific considerations, including the uniqueness of current projects as well as the cultural environment and stages of maturity and capability within the organization. This will ensure that the implementation of strategy recommendations will result in the optimal solution for any IT project-based organization.

Business Solutions of the Future

The future is tomorrow’s present. Many have tried to predict it using silly or scientific methods, from chiromancy (palm reading), aleuromancy (fortune cookies), and other -mancies, to the three Ps (possible, probable, and preferable futures) and a W (or wildcard—low-probability events with a high impact on the future) used in futurology.

Without trying to create a “CRMorology” or “ERPmancy”, I aim to write a series of articles about the future of business software. Since this concerns everyone—and because I’m not Nostradamus or Hari Seldon (Asimov’s famous psychohistorian)—I would like to involve you, our readers, as well as business professionals and decision makers from the enterprise software industry. From students with little knowledge (but extraordinary imagination), to analysts who know everything about the market and vendors who know for sure what will NOT happen in the near future, I need you to let me know how you see the future of business applications.

How Is It Going to Be?

A future in which business applications will not be needed is too far-off to foresee, so that will not be discussed here. So, if we can’t live without these applications, how will they evolve? Will there be one huge, global business software provider, employing armies of programmers and customer support people? Or maybe myriads of open source products that will work together and be as easy to assemble as the pieces of a puzzle?

I guess we could let our imagination wander indefinitely, but let’s get a bit organized here: what we’ll aim for is seeing what could possibly happen in the next ten, fifty, and one hundred years.

Ten Years in the Future

A decade is not such a long time, so it should be easier to foresee the major trends in the business software industry that may happen during this time span. Still, even in the short term, this is quite a challenge. Look at meteorology: the weather changes so fast and unexpectedly that we can only know for sure what it is after it has happened.

Speaking of meteorology, I see some clouds gathering above the world of enterprise resource planning (ERP). Is there going to be a storm? No, they say cloud computing is the alternative to the traditional storage of information—instead of storing the data on a server in your company, you can put it on data centers anywhere in the world. Some don’t believe it will work, but it was not so long ago that people used to keep their money under the mattress because they did not trust banks.

We don’t trust banks today either, but we do use e-banking and credit cards. The same thing will happen with the clouds: their utility and efficiency will eventually be stronger than the fear of losing data. They already exist and the biggest in the world has 150 locations and will store 150 million gigabytes (GBs) every year, or 100 GBs every four minutes.

We will probably have sufficient space for the data, but what about its security? According to a study from Oracle, twenty percent of IT managers think that data security breaches will happen at their organizations in the next year. And the main threats are not from viruses and hackers, but mostly from inside the company. Do we need an occurrence of massive, worldwide data loss to learn from our mistakes (as we supposedly do now), during the economic downturn?

Let’s say we store and secure the data—how do we access it? It doesn’t look like a problem now, but it will surely become one—maybe sooner than we think. According to an IDC report, we created 281 billion GBs of data in 2007, and by 2011, that number will increase to 1,800 billion GBs.

While we do have more sophisticated tools to extract and manipulate data, one of the challenges of the future will be to have structured data. This involves the existence of workflows for data creation and administration, data cleansing, and data deduplication (removal of duplicate records).

Business data is created by users through an interface to a database. Despite the fact that all enterprise software vendors pretend to offer “intuitive” and “user-friendly” solutions, the complexity of these tools keeps on growing. Since the trend seems to be grouping several solutions in the same suite—most of the time, from different providers acquired by the same vendor—integration seems more important than innovation.

Some vendors offer a platform as a service (PaaS) (also known as cloudware), which is aimed at helping customers easily design, develop, and test their own applications. Large companies can benefit from PaaS, as it will allow them to create applications tailored to their complex needs, thus reducing costs. On the other hand, once you choose to use a PaaS platform, transition to another platform becomes very difficult, and potentially impossible. Will the emerging open platform as a service (OPaaS) address this problem by letting programmers use whatever tools and languages they need?

The way we work will also change. According to a study conducted by Accenture, by 2013, seventy percent of mobile phones in developed nations will support Internet browsers. The same report reveals that the millennial generation (people born in the last decade of the twentieth century) will change the face of the workforce.