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High Performance Organizations Are Driven by the Power of Enterprise Business Events

Written By: Ram Ramdas
Published On: April 7 2004

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The Emerging Business Activity Monitoring (BAM) Framework

"Agility", "real time enterprise", "zero latency" these are among the several buzzwords doing the rounds these days. Some would characterize these present times as belonging to the "Real Time Decade." Are these words just hype or do they proffer a vision of reality for the near future? This article attempts to examine the issues involved and offer some answers.

But first some questions

  • As a CXO , do you often feel that you do not have the active pulse of the organization in terms of its processes and performance?

  • Are you often deluged with a huge number of extensive reports and trying to constantly make sense of the numbers?

  • Do you feel that you are very often in a "firefighting" mode rather than focusing on how to place the organizational processes in the next gear?

  • Is there constant chaos in the organization due to external and internal events as well as lethargy and delay in making timely decisions and taking actions?

  • Are your MIS personnel constantly responding to ever increasing and ever changing reporting and information requirements of various users?

  • Do you think that transforming your passive data assets into actionable insight is an urgent need?

  • Do you believe that the costs of not managing your enterprise processes by exception is very high?

If your answers to most of the questions above are yes, the issues discussed in this paper may be of interest to you.

In the globalized Internet era, enterprises are constantly seeking to build sustainable competitive advantage by focusing on

  • Velocity: speeding up customer impacting processes and bringing down latency between events on the ground and organization's response, These processes sometimes span organizational boundaries and even partners in the value chain contribute to this overall velocity.

  • Differentiation through superior service: as product quality evens out, it is the whole customer experience through a superior service offering that can become the differentiator. Superior service demands flexibility in response to often changing customer requirements.

  • Empowerment: empowerment of front line personnel with actionable insight to help increase efficiency and effectiveness of their decisions and actions.

It is not the strongest of the species that survive, nor the most intelligent
But the ones most responsive to change
—Charles Darwin

Current Limitations of Enterprise Transaction Systems

Most enterprises, large as well as small and medium enterprises (SME), have made significant investments in the nineties in transaction backbones and data capture systems. These provide an adequate and robust system-of-record and have in most cases, made internal data capture processes more efficient. However many issues in terms of ability and the means to use this information effectively still remain, as illustrated in this famous customer quote: " ERP systems are like black holes—a lot of data goes in but nothing seems to come out " This may be somewhat of an exaggerated frustration that many users feel, nevertheless significant work needs to be done to address this concern.

Another issue is flexibility of information models design. In today's environment, enterprise information models need to evolve along with the change in the dynamics of internal and external processes and environments. Also, these systems are designed to work in a request-response mode where users need to pull up data or information from multiple applications for making decisions and taking actions.

There is often a significant latency between the physical events that happen on the ground and the time that information becomes evident to concerned users in the forms of reports. The information requirements vary tremendously across both user and time dimensions; based on query criteria; attributes; and comparisons and aggregations. The ability to personalize the information in terms of what, when, and how is also a major concern. Equally of concern is how should users react to the information and what tools do they have to initiate necessary action.

BI Does Not Provide the Whole Answer

Business information (BI) and reporting tools have emerged in the last few years and it is true that they do address some of the above issues. However, fundamental constraints, in terms of being data-centric rather than event-centric, providing post mortem rather than a priori analysis, and also in terms of being primarily one way rather than bi-directional, remain. Typically BI users tend to be a few power users in the organization who generate the analysis on an ongoing basis and may then publish the information to other end users. BI, we believe, is still very much oriented towards a "provisioned", more rigid approach rather than a "declarative", more flexible approach. Importantly, BI is one-way flow of information.

We believe that a fundamental radical rethinking in terms of how information about business events are generated, distributed, and acted upon by users, is required for organizations to leverage the investments in their transaction backbones and data assets. The emerging framework business activity monitoring (BAM)—a term coined by the Gartner Group—may provide key answers to these concerns.

Requirements for a Robust Business Activity Monitoring (BAM) Framework

In this section we outline our vision about what we believe to be requirements of a robust BAM framework without getting into the technical details.

  • Event driven: BAM is about generating user definable business events, pushing it to the user, providing contextual analysis, and enabling the user to take necessary decisions, action and collaborate with internal and external participants. The events should be configurable by different users and roles based on unique needs and access privileges. It should be possible to define events on instances as well as aggregates.

  • Provide context: The framework should have the ability to correlate transactions, performance indicators and processes, and activities. BAM is really about having "ears on the ground" and should generate a context for business events based on the relationship between individual transactions, underlying processes and performance measures which should have the ability to combine lead and lag indicators.

  • Just-in-time rather than real time: Real time is really relative to the business process under consideration. Every business event has a window of opportunity within which the users and systems can react to the information contained within the context of the event. This window of opportunity differs across domains, business processes and enterprises. A BAM framework should have the ability to generate just-in-time business events and disseminate them to the process participants, internal, and external.

  • End user configurability: End users should have the power to configure the what, when, and how of business events and exceptions. BAM is very much about placing the power of business events in the hands of the end user.

  • Cross application rather than monolithic: True business events—as opposed to data and transaction events—really cut across multiple data sources of the enterprise. The framework should work with multiple data sources in a loosely coupled mode, rather than tightly coupled with a single data source in a monolithic architecture.

  • Management by exception: The framework should notify users on exception rather than as a routine matter. No user wants to be flooded with a variety of routine information even if it comes in the form of "alerts". The important thing to recognize is that exceptions cannot be predefined. The ability to define exceptions should be in the hands of the end user rather than the system designer.

  • Zoom in and zoom out: The framework should allow the users to zoom in and zoom out and operate from multiple altitudes—sometimes with a 30,000 feet view, sometimes 30 feet view—depending on the context of the business events.

  • Closed loop action: Monitoring and receiving alerts alone is not sufficient if the users or other systems cannot react to the information in a context dependent manner. Imagine a pilot getting an alert on his or her dashboard at an altitude of 30,000 feet about total engine failure without having the ability to open up a parachute and bail out!

Architecture, Design and Technology Considerations

This section outlines what we believe are some of the critical technology and design and architecture considerations.

  • Information models: Information models defined, analyzed, and monitored within the BAM framework should allow pre- and post- deployment configuration and modification. It should allow for selective "massaging" of the incoming data so that "purposeful" information models can be created in a configurable manner. Deployment time and post deployment flexibility is critical, as the BAM framework is likely to evolve in a spiral manner—a traditional software development cycle based on the waterfall model may not work and actually be counter productive in a BAM context.

  • Open interfaces: The framework should provide interfaces simultaneously to multiple data sources in a combination of both batch and real time modes.

  • Rule-based event driven architecture: The framework should inherently be rule based and event driven. This architecture allows tremendous flexibility in terms of the manner in which purposeful information models can be created and manipulated.

  • Push mode: A BAM framework derives much of its value from its ability to push business events to the user, rather than have the user constantly query the system(s) for appropriate information. One could visualize this as configurable "agents" constantly scanning the flow of data and spotting and communicating "events of interest" as defined by the user.

  • Action triggering: The framework should provide for ability to trigger human and system processes and activities so that issues and exceptions can be resolved rapidly.

The emergence of technologies like enterprise application integration (EAI) and business process management (BPM) and standards is very synergistic to the vision of BAM from a technology perspective. The architecture of BAM can be seen as an emerging layer on top of the EAI stack and can add significant "intelligence" and "content based context and analysis" to the message level plumbing infrastructure that EAI offers for example.

Benefits and ROI

The key benefits of implementing a BAM framework are

  • Continuous process improvement leading to increased organizational agility and developing a performance—focused organization


  • Reduced latency between information generation, decisions, and actions

  • Quicker "hotspot" identification leading to more efficient issue resolution mechanisms

  • Automated triggering of processes on events and exceptions leading to increased velocity and effectiveness of customer facing and customer impacting processes

  • Less effort to obtain the right information
    • More time and resources for value added activities
    • Less money spent on back-office MIS activities

  • Low TCO
    • Low cost of ongoing modification and changes to business policies and compliance
    • Incremental deployment methodology that allows ROI driven implementation

About the Author

Ram Ramdas is a co-founder and CEO of Herald Logic, a business activity monitoring company. He has several years of business and technology experience in leading global consulting and software product firms. He can be reached at ram.ramdas@heraldlogic.com.

For more information about Herald Logic, go to www.heraldlogic.com .

 
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