Business Performance Management
Overview
Business Performance Management (BPM) is a set of performance management and analytic processes that enables the management of an organization's performance to achieve one or more preselected goals. Synonyms for business performance management include corporate performance management (CPM) and enterprise performance management (EPM).
History
BPM emerged as a catch-all term for a set of technologies in the early 1990s that were designed to help businesses optimize their operations. It is rooted in the concepts of MBO and the Balanced Scorecard.
Methodology
BPM involves consolidation of data from various sources, querying, and analysis of the data, and putting the results into practice. BPM enhances processes by creating better feedback loops. Continuous and real-time reviews help to identify and eliminate problems before they grow. BPM's forecasting abilities help the company take corrective action in time to meet earnings projections. Forecasting is characterized by a high degree of predictability which is put into good use to answer what-if scenarios.
Components
BPM has three main components: a set of processes, a set of methodologies, and a set of technologies. The processes are the business processes that are managed by the BPM system. The methodologies are the approaches used to manage and optimize these processes, and the technologies are the IT systems and software used to monitor and control the performance of the business processes.
Benefits
BPM allows organizations to avoid "sub-optimization," or improvement of one area at the expense of others. If most of the employees are measured on cost control, the inventory manager will keep stock to an absolute minimum, which could lead to missed sales. BPM allows all performance measures to be viewed in concert, to ensure that efficiency is achieved while maintaining high levels of customer service.
See Also
- Corporate Performance Management
- Enterprise Performance Management
- Balanced Scorecard
- Management by Objectives
