bi bam and bpm - the best of three worlds

7/28/2019 BI BAM and BPM - The Best of Three Worlds

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BI, BAM and BPM: The Best of Three Worlds

Enterprise Integration Summit

April 13-14, 2010WTC HotelSao Paulo, Brazil

Bill Rosser

Notes accompany this presentation. Please select Notes Page view.These materials can be reproduced only with written approval from Gartner.Such approvals must be requested via e-mail: [email protected].

This presentation, including any supporting materials, is owned by Gartner, Inc.and/or its affiliates and is for the sole use of the intended Gartner audience orother authorized recipients. This presentation may contain information that isconfidential, proprietary or otherwise legally protected, and it may not be furthercopied, distributed or publicly displayed without the express written permissionof Gartner, Inc. or its affiliates. 2010 Gartner, Inc. and/or its affiliates. Allrights reserved.

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,intelligence (BI) are converging. Each element has been operated at arm's length, often by separate groups.The need to adopt performance management, and the business need to drive competitive advantage anddominance in the market, have led to the conclusion that these elements must come together a "big bang" inreverse. Hopefully, it won't take as much energy as the Large Hadron Collider or won't have as much troublegetting started. This is a simple idea, but it is a hugely challenging concept to execute beyond the odd examplethat exists in the market (for example, demand planning, and financial planning and budgeting/CPM

. ,evolutionary advance. See the acquisitions of Hyperion, Business Objects and Cognos by Oracle, SAP and

IBM, respectively three significant acquisitions that signal the mass-market recognition of this forcedconvergence. However, acquisition is just the start; it is just one stage of perhaps many! Mere integrationbetween the massive silos at a customer site will not yield the desired objects from performance management.Data, metrics and process reusability from interoperability across a firm's BPM/BI/BAM environment is whatis required. And this at a time when IT organizations must protect investments already made and exploit

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Bill RosserBRL37L_113, 4/10

This presentation, including any supporting materials, is owned by Gartner, Inc. and/or its affiliates and is for the sole use of theintended Gartner audience or other authorized recipients. This presentation may contain information that is confidential,proprietary or otherwise legally protected, and it may not be further copied, distributed or publicly displayed without the expresswritten permission of Gartner, Inc. or its affiliates. 2010 Gartner, Inc. and/or its affiliates. All rights reserved.

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, ,and predictive information at decision points within a process. Although there is much to gain, deployment ofthe individual solutions is mainstream, but deployment of BPM with BI and BAM has been limited to earlyadopters.

The Key Issues of this presentation are:

Why are BI, BAM and BPM technologies converging?

How can BI technologies improve business processes?

Which tactics help to successfully link BI and BAM with BPM?

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Defini tion: Intelligent decision management is the use of business logic, fed by analytical

insight, to automatically determine the optimal next step in a business process.

,BI adds value to process management in two ways inserted within a process and providing informationabout a process. Intelligent decisions help business processes be more effective. Processes without decisionsare static, inflexible and inefficient, but decisions made on guesses or inaccurate data, rather than factualinformation, cause problems, too. When BI is integrated into business processes, decisions are morerepeatable, scalable, traceable and accurate. Properly implemented BI integrated into a process, often throughbusiness rules, is the basis of competitive differentiation and customer satisfaction. BI is also used to decidewhen to add steps to make the process more effective or to remove steps that would be less expensive or causelesswaste.When BI is used to monitor processes, the metrics are linked to business goals. Many process monitors look

only at the efficiency of a process, such as how efficient an automobile engine is. BI tools incorporate otherdata, so the business alignment is known, such as if the automobile will arrive on time. The BI tools providestatus about processes, both modeled and unmodeled. Alerts are issued if the process is at risk, either now or inthe future. Many BI systems provide real-time updates as the process goes on but also operate in batch,depending on business needs. Process optimization, both in terms of efficiency and effectiveness, may bedetermined by analyzing how the processes are running and have run in the past. This provides a basis foradustin and im rovin them.

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Action Item: For any process, identify ways that BI can help make decisions within the processes, watch theresults of ongoing processes and improve the performance of each step.


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Tactical Guideline: When adding intelligence to automated processes, moni tor the decisions

that are made, so that errors in business ru les are more quick ly caught.

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Different analytic techniques can be employed when linking BI tools with processes. For example, wisdom-of-crowds-based information can be inserted within website content. Netflix encourages users to rate movies,adding value to its other customers, and, in return, the service suggests movies the customer should enjoy.Multivariate testing improves website yield through a process of offering content variations, then deliveringthe optimal combination. Many casinos use BI in the process of operations to determine which free offeringswill optimize customer engagement. Real-time information about room or show-seating availability is used tominimize the offering costs. BI is also used to improve the speed of approval processes, such as online loan

applications. BI systems import external data sources and analyze customer profiles to produce scores that canquickly be matched against the details of a process instance and business rules. Automated discovery ofprocesses is used in the healthcare industry to see how patients with similar illnesses are handled. Supply chainprocesses benefit in many ways by embedding BI. In this example, it is used to help a dispatcher decidebetween holding a plane and risking delay penalties, and shipping cargo that doesn't match a preapproval

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, .Action Item: Leverage the multitude of examples where processes have been made intelligent.


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Tactical Guideline: Focus on a combination of disciplines to achieve business success

converging business intelligence and process management is one important aspect.

,While BI, BAM and BPM technologies are converging, it is not soon enough, fast enough or complete enoughfor organizations that strive for process excellence. The world of BI has matured, with the market worth morethan $5 billion and with most organizations using some BI tools in their business processes. The market forBPM suites has passed $2 billion, but from a technical point of view, BI and BPM markets have been separate.Many BPM suite vendors offer basic reporting on the activity within their product set or of externally querieddata, but no BI platform. Business users need the two worlds to combine. They must be aware that businessatterns are chan in , anal ze what to do, and model and ada t to im ortant chan es in business atterns.

They also need an integrated environment to map processes to performance to strategy. The BI world provides

the awareness and analysis. The core technologies of the BPM world provide business rules, process modelsand process orchestration. As the worlds converge, links must be built between BI and BPM so that a betterand more compatible context is applied to business rules, and the results of process execution are measured foralignment with business goals. Gartner's Pattern-Based Strategy research initiative overlays with thisconcept well. It approaches the problem holistically and will provide business managers with the strategicjustification to bring BI and BPM together.

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ction tem: tart a igning an now, at usiness, tec nica an ven or eves. e urgency s oureflect the opportunity. Read Gartner's research on Pattern-Based Strategy.


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Tactical Guideline: Growing BI and process maturity begins wi th a proper assessment of

where you stand. The degree of maturity is a good indicator of how much agili ty you may

achieve, if required.

,One driver of BI and BPM convergence is coming from organizations that are maturing from processignorance to process awareness and control. Although enterprises pass through numerous maturity stages, notall will traverse the full maturation model. This is understandable, and there are benefits to be had at each stageof the process. Acknowledging business inefficiencies, or even just measuring them, is a step toward processawareness and can be assisted by BI measurement and monitoring techniques and tools. Once a need forchange is established, analysis and modeling of target business processes is the next natural step. Processautomation lacin the modeled BPM rocess into action ives wa to rocess o timization, makin theprocess more efficient and effective. Departmental processes give way to enterprise processes and

enterprisewide benefits. Many enterprises will stop at this point. For those that continue, there are two high-value stages: Enterprise valuation control Creating a business performance framework that links business valuation (innear real time) to process execution. This is where convergence of BI and BPM becomes deep. Agile business structure Innovating new businesses, products and services through agile businessarchitecture.

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, e , s a cut ourney. owever, t e rewar s are su stanta: return on nvestment ,increased stakeholder satisfaction and agility.Action Item: Join the governance of the BI and BPM maturity journey through common sponsors.


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Tactical Guideline: Establish a BI competency center, using the Gartner BI framework to

ensure the proper aspects of a BI solution have been addressed.

Like process management, BI is not just about technology. The Gartner BI framework, shown in this slide, laysout the different views and components needed to implement a BI, analytics and performance managementprogram. The framework is descriptive rather than prescriptive, with various components for describing asolution rather than a specific solution architecture. The people view requires looking at how BI will beenabled and involves enterprise information management practitioners. Analysts bring out insights in the data,makin it availabletothosewhowill useit. Processesarere uiredtoensure ualit data brou ht to ether foranalysis and used to make business decisions. The technology view involves many IT disciplines and is the

plumbing for linking BI and BPM. The BI tools may be an enterprise platform standard, embedded reportingtools or even Excel. Analytic applications and process applications are what workflow or business rule userssee. Across any BI framework, program management and metadata management is needed to ensuresustainability.

Action Item: Read more about the framework in "Gartner's Business Intelligence, Analytics and Performance

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Management Framework," G00166512.


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Strategic Imperative: Define agility requirements; measure what is available and what ispossible based on current and incremental investments.

Any enterprise that aspires to effectively sense and respond to a changing environment must plan and executea strategy for agility. In that environment, planned production is optimized, patterns are recognized, andcontingencies are well-rehearsed. Awareness is the first element to address. No matter how inefficient,inflexible and rigid an organization is, its performance can be measured. As agility grows, awareness ofcapabilities, trends and situations is the front line in defending process integrity. Productivity is the engine thatexecutes the day-to-day business. Perfect optimization is an unrealistic goal, but continuous improvement is amanagement style that many successful companies adopt. Using BI to determine which processes need

improvement, then working to optimize, automate and regulate them, will pay off. When issues arise,flexibility and adaptability are required, or productivity will suffer. BI and process experts should worktogether to ensure that patterns are identified and contingencies are available for expected situations, such asempty store shelves, using modeling, simulation and rehearsal. When something unexpected happens, such asa product recall, informed decisions must be made. BI tools are the key to being informed. If the data is

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, ,business goals.Action Item: Target agility as a goal, investing in the changes that deliver on that goal.


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Tactical Guideline: Most business processes can be improved by the application of a wide

variety of analytical techniques.

BI functions include many styles that can be used across the BI continuum of activities. Traditional BIrequirements center on information delivery and analysis functions. With the advent of process integrationwith BI, a new set of skills is useful for BI organizations, along with business users. These new skills are oftenbeyond what organizations have, and investments are needed to move forward. Following are some examplesof how BI functions may be useful: Events or alerts are used to trigger processes. Processes are a common event emitter. Reporting, dashboards and visualization provide an organized and contextual view to process participants. ue engnes co y ec sons, w c eps auomae processes wor more e c en y. Process mining analyzes transactions and data flow to automatically build process maps.

Service-oriented APIs are supported by BI platforms, so that functions may be called by process executionengines. Event processing keeps track of critical business indicators and identifies known patterns. Data mining identifies patterns in data to estimate the likely outcome based on prior instances. Simulation defines expected behaviors and "what if" outcomes, based on test data and assumptions.

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,constraints.Action Item: Document which BI functions could improve your process and what the value would be.


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Strategic Imperative: BAM applications do not just plug in and start providing answers.

Questions need to be defined, then a BAM application can be tasked wi th answering them.

BAM applications address the questions that business users must answer to be effective and efficient. Abusiness environment is composed of many processes human and automated, internal and external, modeledand unmodeled. Through sensors and agents, a BAM observation layer watches events and key metrics of thebusiness environment and its processes. The observation layer may be visually presented to end users or usedin automated analytic processes. Different types of questions may be answered about the current businessenvironment; for example "Are things working well?" or "What problems exist or are about to exist?" all

' . ,to date and prerequisite processes have been completed in sequence. An observation layer can track

information on resources ranging from the presence of people online to processing capacity to raw materials. ABAM platform answers these questions using a set of analysis techniques, including baseline, thresholdmonitoring, correlation, root cause, and impact analysis and predictions. As an added bonus, BAM systemsdon't require a change in applications only access to events they generate.

Action Item: Focus on building an observation layer that is rich enough to address the business questions that'

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Emerging technologies offer a great potential, especially as each technology area adopts a more-SOA-basedapproach. In the future, it will likely be possible to use BPM-like technology to orchestrate the creation ofcomposite processes comprising analytic and transaction-processing services. This will allow users to injectanalytics into business processes as necessary and to recombine analytic and transaction-processing services astheir needs change.However, although this is likely to be the ultimate endgame, it isn't going to happen broadly anytime soon.

s s ecause anay c app ca ons are genera y mon s o ree years e n usness app ca ons ntheir adoption of SOA, and repositories of analytic services (the analytic equivalent of a business service

repository, or BSR) are only starting to emerge. Although business applications are more mature in theiradoption of SOA, their business repositories tend to be proprietary in nature, making it hard to orchestrateservices outside a particular vendor "ecosystem." Finally, although BPM suites could offer much of thefunctionality to provide orchestration capabilities, business users lack understanding of what informationshould trigger actions.

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,going to have to consider iterative approaches.Action Item: Tap into any SOA skills in your organization to integrate initial BI and BPM initiatives.


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Market: Vendor consol idation is driving the convergence of process management, transaction

processing applications and BI.

Until 2007, most BI vendors had only light investments in process-oriented tasks, and efforts were gaininglittle traction. Starting in 2006, when Microsoft acquired ProClarity, and accelerating in 2007, vendors ofprocess management software started to acquire BI platform functionality. Oracle acquired Hyperion for itsperformance management functions, adding to the analytic features it acquired with Siebel. Tibco boughtSpotfire, SAP bought Business Objects, and IBM bought Cognos. The vision of these companies is good. Byproviding BI functionality as part of a process and application development stack, the vendors can build tightinterfaces, stress best practices and retain account control. Oracle has a jump on the other vendors, because

Siebel applications already use Siebel Analytics functionality, but now it must extend that and Hyperionfunctions into more of its applications. It is too early to tell how well SAP and IBM will execute their BIacquisitions, and Microsoft and Tibco have yet to fully capitalize on the vision. Nevertheless, the consolidationof vendors has happened, and an integration of technology will follow. There are still BI vendors not tied to aBPM vendor. These vendors are working on improving their service interfaces, so processes can call reporting

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.

Action Item: Weigh the integration benefits against the lock-in risks of sourcing strategic BPM and BIsolutions from the same vendor, especially if that vendor is also providing business applications.


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Strategic Imperative: Process designers are responsible for addressing data quality and data

integration issues across the entire information value chain, not only ins ide their firewall.

Bad data destroys trust. Data integration and quality levels are important for processes, just as for BI. Thechallenge of achieving success with data integration, and controlling data quality throughout flows of data,becomes greater when parts of the data flow reside outside a process, department or organization. As processesextend beyond an application boundary, the source of data may come from another department, customer ortrading partner. To ensure that poor-quality data from external sources does not damage or degrade theoperations of internal processes and applications, organizations must establish a data quality "firewall."

, ,corporate network, the data quality firewall exists to keep poor-quality data out of internal operations and

applications, thereby ensuring processes work only with "fit for purpose" data. The firewall may apply somedata-cleansing operations to address known issues in the data.This will cause the data to meet minimumquality requirements for process steps and will reduce the effort for the process modeler. Service-levelagreements, both inside the enterprise and between enterprises, will become crucial for setting goals andexpectations, as data integration and data quality services become adopted and widely used.

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c on em: nsure your s raeges or process orc es ra on a ress a a negra on an a a qua y or edata flow, including both internal and external data providers and consumers.


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Strategic Imperative: A shared enterprise metrics framework can link different aspects of

performance management into a coherent reflection of enterprise performance.

Having a common metrics framework that is applicable across business applications, processes and BIplatforms is an important part of integrating end-to-end processes. Each enterprise function produces uniquereporting and analytic artifacts, useful for local use but not always easy to share across departments. Somemetrics and analysis have to be shared if corporate performance goals are to be achieved, such as "cost of sale"or "profitability," but they are often inconsistent across different business units. A properly defined enterprisemetrics framework is part of the answer. It provides logical linkages between different areas of performance

,functions, it can provide an end-to-end view of how each business function impacts overall corporate

performance. Defining an enterprise metrics framework is a challenging task; however, the challenge doesn'tcome from identifying which metrics to measure, because most organizations already have plenty. The realchallenges are in getting consensus as to what are the most-important metrics to measure, or standardize, andhow these relate to each other. There are several methodologies to help organizations bring structure to theirexisting metrics. Gartner's Business Value Model is a starting point for such an exercise, but there are other

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me o ooges a can aso e use .Action Item: Define an enterprise metrics framework as a foundation for an end-to-end approach toperformance management.


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Tactical Guideline: Engage your BI competency center in defining a converged BI/BPM

architecture. The overall driver may come from an enterprise architecture group, but BI must

be seen as a critical and competent component.

The "megavendors" are trying to make it attractive to pick a software stack that includes BI, BPM and applicationdevelopment. SAP and Oracle go one step further and provide applications on the stack. Although this is the direction themarket is going, not every vendor's stack is well-integrated yet, and the applications provided don't all use the BI andprocess services within the stack. One course of action is to pick a stack vendor and ride its maturity curve. This has the advantage of better integration asthe stacks mature, but it also carries the risk of vendor lock-in and predatory pricing. A second architectural choice is to pick a best-of-breed solution, one that includes a BI platform, BPM suite, SOA and

w , v v . vtechnology but requires high investments in skills and adds the risks of market turmoil and more-frequent migrations.

This approach might be a tactical decision because of legacy investments, such as using SAP for business applicationswhile being heavily invested in IBM/Cognos for BI. A third option is to focus on a BI platform approach, picking a set of tools that meet as many requirements as possible.Data integration and information management is a critical component of this strategy, making data sharable acrossapplications, with BI embedded within applications and processes. The worst strategy is to do nothing and let chaos reign. A collection of unique BI tools, analysis techniques and data

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mo es w grow aong w t uncoor nate purc ases o usness app cat ons. ac app cat on may wor we nisolation, but it's difficult to develop agile processes that cross departmental or application boundaries.Action Item: Define an architecture of how BI, BA and BPM merge. Don't allow it to develop on its own.


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Strategic Imperative: Develop key metrics for init iatives that link BI and BPM. Establish what

went right and wrong, employing the process of continuous improvement.

Gartner clients report several key obstacles to using BI to improve processes:Corporate culture and politics. Obstacles to process change are corporate culture, entrenched managementpractices and internal politics.Adopting a different funding model. Measurement of an end-to-end process model makes it hard to accuratelyassess cost and value by group.Lack of formal governance. Governance principles are key in establishing responsibility for work that mightbe driven b BI or an alert from BAM; however, few enter rises use overnance service-level a reements(SLAs). Use governance to help define and enforce a metrics framework.

Organizational restructuring. Process change challenges an organization, encourages cross-functionalcollaboration and expands decision making. Improving processes requires trust, education and vigilance.Mismatched compensation and rewards. Many process improvement projects fail because compensationguidelines do not support new work roles. In the worse cases, users gain rewards without more-effective work.Focus on the customer.Too often, process overshadows customer service at the front lines. Encouragefeedback on customer-facing processes and give audited autonomy in bypassing some aspects of the process.

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ction tem: ress t e management issues o process improvement, not just t e tec nica ones.


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Bill Rosser3 3 0

This presentation, including any supporting materials, is owned by Gartner, Inc. and/or its affiliates and is for the sole use of theintended Gartner audience or other authorized recipients. This presentation may contain information that is confidential,proprietary orotherwise legally protected and it may not be furthercopied distributed orpublicly displayed without the express

bi bam and bpm - the best of three worlds

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