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11/2/2006
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Rick Whiting
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BPM Gets Smarter With A Little Help From BI

More and more, both users and vendors of BPM and BI software are figuring out there's a lot to be gained by bringing the two technologies together.

Business process management and business intelligence software evolved separately, designed for entirely different ends. Maybe they shouldn't have. More and more, users and vendors of BPM and BI software are figuring out there's a lot to be gained by bringing the two technologies together.

Business process management software helps companies automate the workflows on which every company depends, from marketing and supply chain management to paying bills and buying office furniture. Business intelligence software is designed to analyze data of all kinds, which, naturally enough, can include information related to business processes.

BI can detect events that take place within a process, such as identifying a potentially fraudulent transaction or a customer order that exceeds a credit limit. It also can prompt business managers to take corrective actions. Increasingly, BI is being used to analyze data generated by processes in near real time, a major advance over BI's traditional role of analyzing historical data. And business intelligence can collect and analyze performance data about processes themselves, serving up metrics that measure how smoothly workflows are going.

"I call it our data supply chain," says Guido Sacchi, CIO at CompuCredit, which has been using BPM and BI for about a year. The credit issuer and financial services company initially used Pegasystems' SmartBPM Suite software to help it manage customer service. More recently, it expanded its use of the software to get a handle on its process for resolving billing disputes and suspected fraudulent transactions. CompuCredit uses BI software from Business Objects to extract transaction and customer interaction data from Pegasystems' software and analyze it with an eye toward making service agents more effective. The data helps the company spot kinks in workflows and correct problems through Pegasystems' business rules engine.

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Pairing up business intelligence and BPM helps shore up the technologies' respective shortcomings. BPM tools often lack the intensive analytics functionality that managers need to scrutinize data generated by processes. On the other hand, many business intelligence tools do a poor job of providing analysis within the context of processes. BPM "really ties the abstract information out of the BI world to the real world of process execution," says Greg Carter, CTO at BPM software vendor Metastorm. "It makes business intelligence actionable."

Business processes can be intricate, including people, IT systems, and machines, each handling specific functions. Increasingly, automating those processes is topping managers' to-do lists. Sev- enty-two percent of 300 business technology managers queried for InformationWeek Research's Priorities 3Q survey rank simplifying or optimizing business processes as a priority. And BPM projects are largely being sponsored at the senior executive level, says John Colbert, services development VP at BPM Partners, a consulting firm.

TRIM THE INEFFICIENCIES

Great Clips, a chain of 2,600 hair salons, uses Metastorm BPM software, which includes built-in BI functionality from Hyperion Solutions, to manage the way it recruits franchisees and opens new stores. The company opens about 200 locations annually and is doing construction, finding franchisees, or acquiring land for 100 stores at any given time. Using Metastorm's reporting capabilities, Great Clips identified inefficiencies in the internal steps it takes to develop new stores, as well as the way it manages external approvals such as construction permits, CIO Jim Waldo says. "Every time we get a better telescope, we see more things," he says.

Sales of BPM software, while nowhere near the more than $5 billion companies spend annually on business intelligence tools, are expanding at a healthy rate. Investment in business process management will grow from $1.3 billion this year to about $2 billion by 2010, according to forecasts from Gartner. Forrester Research has more aggressive projections, forecasting BPM software sales of $2.7 billion by 2009. This year's survey of InformationWeek 500 executives found that 33% already had widely deployed BPM software, and another 42% had implemented BPM on a more limited scale.

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