- Introduction
- Benefits of BAM
- Measuring Business Performance with BAM
- BAM Business Scenario #1: Circuit Procurement System
- BAM Business Scenario #2: Risk Management System
- Conclusion
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Measuring Business Performance with BAM
Thus, BAM focuses on monitoring business processes, as opposed to system-level processes. However, even the term monitoring is something of a misnomer: What companies are really interested in is the ability to measure the performance of an organization. While the term performance implies financial performance, other metrics are also of interest to the business staff. Such metrics can be categorized into four major groups, loosely based on the "balanced scorecard" model popularized by Kaplan and Norton:
Financial
Process
Customer
Learning and innovation
NOTE
See Robert S. Kaplan and David P. Norton, The Balanced Scorecard: Translating Strategy into Action (Harvard Business School Press, 1996).
These metrics are often of interest to different areas of the organization. For example, the financial metrics are of most interest to the financial staff, who usually ultimately report to the Chief Financial Officer; the process metrics are of most interest to the operations staff, who ultimately report to the Chief Operations Officer (COO).
In many cases, a metric is a calculated value of based on other values. As a simple example, calculating the average loan value of a loan portfolio would require the value of each loan and the total number of loans in the portfolio.
BAM solutions are often referred to as "digital dashboards" because they provide real-time feedback in the form of visual displays. In most cases, the user can even interact with the visual displays and play "what if" scenarios for planning purposes.
NOTE
Because the term real-time often implies something that happens in a very narrow time window, it has often been replaced with event-driven to more accurately denote an organization processing business events.
The following sections discuss two different types of business scenarios: a procurement system and a risk management system.