EXPERT RESPONSE
Business activity monitoring (BAM) and the selection of key performance indicators (KPI's) should be driven by the business community and should occur hand in hand with analytical business intelligence (B)I. Ability to analyze your streaming operational data is key to proper selection of BAM software. The BAM software should also be able to analyze that information in the manner in which you expect. This could take on the form of simple queries all the way to interfacing to enterprise resource planning (ERP) systems and performing complex transactional processing. BAM software is rather diverse so definitely start with your business requirements.
For example, with BAM, you may want to be warned when it is time to order more of a certain product while minimizing inventory. Analysis would help us determine the ideal setting for this KPI, so that supplies do not run out completely.
The following guidelines should be observed when choosing or customizing business activity monitoring software:
- KPIs need to be actionable. If there is no direct action that can be taken from a change in a specific KPI, then it does not belong in the BAM software.
- BAM requires an analytical mindset in the organization. Often, operational managers are highly confident in their ability to mange by intuition. For a BAM project to be a success, the culture of the organization may have to change from instinct driven to data driven.
- KPI settings should be continuously monitored and assessed to determine their effectiveness. The goal of the BAM project should be to increase corporate performance, and this should be reflected in adjustments to KPIs over time.
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