This is the first in a series of articles summarizing and analyzing the results of BPM Partners’ annual BPM Pulse survey. The 2007 Pulse, which was conducted from October 2006 to February 2007, had more than 500 respondents. Although it was a global survey, more than two-thirds of the respondents were U.S.-based. There was a good mix of representation from companies large and small, across many industries. The respondents also identified themselves in nearly equal measure as being part of the finance department or IT. A smaller percentage came from other parts of the business. Vendors and consultants were excluded from participation. You can request a summary of the results (to be released in March, 2007) for your personal use.
Operational analytics is a key component of the next wave of business performance management, as described in my recent article Performance Management 2.0. It is also interesting to note that Business Intelligence (BI) 2.0 is complementary and supportive of many of the requirements of BPM 2.0. To really enable the comprehensive, holistic view of an enterprise’s operations that BPM 2.0 requires, you need the ease of use, data quality, collaboration and lower costs that BI 2.0 promises.
Now on to the survey results. One of the primary questions asked every year of respondents is: Which BPM components are you interested in? As has been the case since we started this survey in 2003, budgeting tops the list (selected by 55% of respondents). There are many reasons for this, not the least of which is that many organizations are still relying primarily on spreadsheets for budgeting. It’s also not a bad idea to start your BPM initiative by getting budgeting and planning right so you have a set of meaningful targets to compare your performance against. Right behind budgeting on the list is dashboards. Dashboards are certainly an important part of BPM, but while they are often used to display the corporate scorecard (collection of key performance indicators or KPIs), they can also be used to display key operational measures throughout the company. Therefore, the high interest in dashboards can indicate interest in operational analytics as well. Operational analytics was cited by 36% of the respondents as a BPM component they were interested in (respondents could select more than one component). Considering BPM’s history of being focused on financial reporting and budgets, this is a positive development and a strong indication that BPM is now growing beyond finance.
Operational analytics covers a broad area. We wanted to know more – specifically, what aspects of operational analysis were of interest to companies. To do this, we identified the major potential departments: sales, IT, HR, services, marketing/product marketing, research and development. We then asked respondents if they had plans to implement a solution or had, in fact, already implemented one. To no one’s surprise, sales analysis (or sales performance management) topped the list for planned operational analysis projects. Of those planning an operational BPM project, nearly 21% identified sales as their area of focus. The reason is obvious: improving success, productivity and profitability in this area can have a quick and direct impact on the bottom line. Close behind was HR or employee performance management. Now you might be asking why sales performance management plans didn’t in fact score higher than it did. One reason is that this area is well represented with existing/legacy implementations. Of those respondents that said they had already implemented some aspect of operational analysis, sales was identified as the area implemented by nearly 30% of them. As with planned projects, HR was right behind. The area that scored lowest for both plans and existing implementations was R&D/product development.
There are two primary ways that vendors address this market. One is to provide the raw tools, typically a multidimensional database and report and query access tools, to enable IT to build custom operational analytics solutions. The other is to provide area-specific packaged applications with built-in domain expertise. I guess it’s not too surprising that the areas identified as most popular – sales and HR – are also the areas currently being best served by packaged applications. Over time, we expect to see additional applications addressing a broader range of operations and a corresponding uptick in adoption rates in those areas.