BPM Spells Relief

BPM SPELLS RELIEF May, 2005 By David Menninger, Applix 289 Turnpike Road, Westborough, MA 01581 Tel: 508-870-0300, Fax: 508-366-2278 ©2005 Applix, Inc. All rights reserved. No part of this document may be reproduced in any form, by Photostat, microfilm, xerography, or any other means or incorporated into any information retrieval system, electronic or mechanical, without the written permission of the copyright owner. Inquiries regarding permission for use of material contained in this document should be addressed to: Applix, Inc. 289 Turnpike Road Westborough, MA 01581 1-800-8APPLIX E-mail:info@applix.com Applix and TM1 are registered trademarks of Applix, Inc. TM1 Web is a trademark of Applix, Inc. All other trademarks and company names mentioned are the property of their respective owners. Part no: TM1-LIT-BPM Relief-WP Business Performance Management (BPM) work. While spreadsheets are useful for is all about aligning business strategy with presentation information, they do not resources and execution, to generate opti- always offer the depth and breadth mal results. BPM is not a particularly new needed for a full understanding of the concept – the goal of optimal business data. This onus falls on the financial performance has been central to any managers. What tools can you use to business strategy since the beginning of make the planning, budgeting and analyz- time. What is new are the powerful tools ing of information more easy for not just that are available to businesses so they the extended organization, but also for can be more effective at BPM. you? Here is where BPM can help. By integrating a back-end analytics solution Information technology has made it possi- with operations information, a BPM ble for executives to gain unprecedented solution enables executives throughout Better information fuels insight into business performance in near the enterprise to take action: real-time. This on-demand ability to “take They can plan, analyze and adapt to the better decisions, which the temperature” of any aspect of your data’s implications, with the result of business, and to model the reactions that lead to better execution optimizing business performance. For will occur to any business action, means example, a large hospice company has a and, ultimately, better executives can make faster and better for- complex system for numbers crunching, ward-looking decisions. Better information performing what-if analyses, scenario business performance. fuels better decisions, which lead to better planning for start-up sites, labor manage- execution and, ultimately, better business ment, and drug formularies. Rather than performance. Whether your business is “hard-code” custom reports for each LOB small, large or in-between, a strategic executive, the company is using a BPM approach to BPM, fueled by new BPM system that puts easy-to-use analysis information technology, can empower tools in the hands of executives. This you and your company’s executives means they can access the information with the information needed to make they need faster, in a format they better decisions. A number of trends are understand, so they can make better fueling the global adoption of BPM as and more timely business decisions. standard operating methodology, including the following: The need for more information, more quickly New demands on finance managers and analysts Over the past few years, many companies have turned to business intelligence (BI) Just as spreadsheets changed the nature systems to gain insight into their business of “numbers crunching,” the demand for performance. BI solutions – whether always-accessible information is drastically turnkey or homegrown – can provide changing the role of financial managers. information on everything from customer No longer is the spreadsheet just the purchasing and satisfaction trends to domain of the financial department. From product development cycles. You can Line-of-Business managers to executives, gain an understanding of how your people throughout the company need to business acts, what its strengths are and view, understand, and manipulate raw what it needs to improve. All things business data. As more team members needed for a smart business, right? The touch the information, financial managers challenge here is that many BI systems need to change the tools with which they 3 only offer you a historical view of your they do not want to be the next Ken Lay business. By the time the information is or Bernard Ebbers. Now that executives – compiled and analyzed, it is likely you are and board members – can be held basing your decisions on last quarter’s criminally responsible for accounting information. Thus you are managing your “inaccuracies,” they are demanding more business based on business events and control over their companies’ finances. conditions that have long since expired. In order to control the finances, however, This may have been acceptable a decade they need to understand them. To make ago, but today companies need to make changes quickly – and prevent small decisions based on near real-time informa- problems from becoming extremely large tion so they can plan more accurately and (and public) ones – executives need react more quickly to changing conditions. to see more numbers, in more detail, This raises some significant questions. more often. • How can you evolve your BI system to These demands are falling on you and support today’s real-time needs? your team. Whenever an executive needs • And once you do, how do you change financial information, your team has to your planning so it is based on monthly drop what they’re doing and run the operational, revenue and expenses reports.