What Is Business Activity Monitoring?
The concept of Business Activity Monitoring (BAM) is simple. It watches business applications, detects things that need to be acted upon and takes the appropriate action, perhaps alerting us or taking action within the system. Since most applications have been accused of creating "too much data", Business Activity Monitoring can prevent things from slipping through the cracks.
are continuously generating a variety of information that typically goes unnoticed
until some later time, often when it is too late or has lost some of it's value.
Often in real time, BAM software captures information, evaluates it and alerts
us or takes some preplanned action if it meets the appropriate conditions.
critical, time-sensitive data from applications, files (including multiple
data sources), E-mail, web sites, operating system, etc.
when an inventory item is issued, the new balance on hand is captured.
Alternatively, when a supplier updates their customer service portal with
information on your open orders, BAM can capture the new shipping dates
information to preset rules including using the data required for the
rule from the same or other systems.
has the new balance on hand fallen below the reorder point? Alternatively,
do the new ship dates match your requested dates?
employees, partners, and customers via e-mail, fax, pager, PDA, and the
the planner and buyer for that item receive an e-mail alerting of the
applications, delivers reports, and takes corrective actions
a requisition for that item is automatically created in the purchasing
BAM Is About Business
and IT often discuss BAM as a technology, the reality is that BAM is about "Business".
The users of BAM are business people. BAM monitors business data and help make
business decisions. BAM is about business. BAM can bring significant business
value in the world of technical data, but its justification must be derived
from business management improvements.
has turned into a marketing term and therefore the definition is far from standard.
The most important claim for BAM is that it can fundamentally alter the way
businesses understand and act to threats and opportunities.
decades, systems have incorporated the concept of "exception reporting". In
many ways, BAM is an updating and extension of exception reporting. With exception
reporting, the definition of an exception was defined within an application
or, later a reporting or business intelligence system. In most cases, the identification
of the exception was done periodically, running a stock status report, and MRP,
definition of an exception is not limited to the logic or information within
a single application or program. With most BAM products, the definition of an
exception is defined outside the business application and can include external
sources of information needed to determine if an exception condition exists.
The definition can be something happening (out-of-stock condition) or something
not happening (an incoming shipment did not arrive on time). Therefore, BAM
logic, external to applications can identify a low stock situation in inventory,
look at open customer orders and open purchase orders in different applications
and determine if an expedite e-mail should be sent to the vendor or a simple
alert sent to the buyer. Likewise, BAM logic can detect that an "A Customer"
has not ordered within the last 10 days, sending e-mail to the sales rep to
make a call.
vendors tout that their products are "Real Time". Is real time good? Yes. Can
it be justified? Maybe. The value of BAM is not dependent on being a real time
system. A BAM solution that periodically analyses the business can also create
significant value. The value of real time, versus frequent (hourly) versus periodic
(daily) should be considered. For many situations, a system running in other
than real time can be just as valuable and operate at a lower cost.
vendors are not adequately explaining their products or the value to the business
users. Telling the average business executive that they are "Capturing an intranet
transaction" is not very meaningful. These vendors need to focus on the business
value and define their products more in terms of what it does and the value
created, not the "how it does it".
search of the internet and vendor briefings has identified many vendors who
claim their products fit into the definition of BAM. Here is a sample, but not
Squibb, Princeton University
Senior Aerospace, Bibby Sterlin
Bank of Australia, Qualcomm, T-Mobile
Raytheon, Lockheed Martin
Telecom Italia, Henry Ford Health Center
— Business Activity Monitoring holds significant potential for end user
organizations. It can accelerate the velocity of the business and deal with
the details of everyday needs. Users should determine if BAM has a role in their
business and if so, develop a plan to learn about the concept and launch a pilot
operation. They are urged to use a pilot to more fully understand the benefits
and limitations of the concepts.
— BAM vendors need to communicate their value proposition in business
terms, using realistic examples to communicate both what BAM is and how it generates
business value. Application vendors should look at BAM as an extension to their
existing products in order to deliver greater value to their customers and generate
additional revenue. Vendors with mature application products with large install
bases can be especially well served with BAM.
Thompson is a principal of Process ERP Partners. He
has over 25 years experience as an executive in the software industry. Olin
has been called "the Father of Process ERP." He is a frequent author and an
award-winning speaker on topics of gaining value from ERP, SCP, e-commerce and
the impact of technology on industry.
can be reached at Olin@ProcessERP.com.