BPM according to Fintalent’s business performance management consultants is the solution to how companies track, manage, and report on their business performance in order not to be disrupted by changes. It combines IT and process management with analytics for the purpose of optimizing service delivery for a company’s customers.
What is Business Performance Management?
Business Performance Management (BPM), also known as business process management, is a process that combines IT and process management with analytics to extract value from data collected throughout an organization’s revenue cycle. BPM solutions are intended to optimize a company’s service to its customers, but can also deliver increased efficiency and profits for internal processes as well. Taken together, this combination of tools and strategies is often referred to as “business intelligence” (BI).
How does Business Performance Management work?
Business Performance Management uses BI technology and analytical tools to improve the way a business works. It defines the metrics that best reflect a company’s ability to deliver value to its customers and makes sure that processes are in place, from order fulfillment all the way through revenue collection, that ensure these goals are being met.
What are the benefits of using Business Performance Management?
BPM solutions can significantly improve a company’s bottom line. By improving the way businesses deliver value to their customers, they also improve their reputation with those customers, which can lead to greater loyalty, increased brand awareness, and ultimately sales growth (“Improving Profitability”). Customers benefit by knowing that they will receive products and services in a timely manner. Employees gain ease of access to information relevant to their jobs and greater control over the tasks they perform through self-service options. Finally, companies benefit by increasing operational efficiency and creating more cost-effective processes (“Improving Profitability”).
Many different organizations can use BPM solutions to optimize revenue. For example, manufacturing firms may use BPM to optimize their order fulfillment processes. Retailers can improve their inventory management, minimizing the amount of time necessary to process an order and minimizing the number of orders shipped inaccurately (“Improving Profitability”). Service companies can improve their customer service through better metrics and analytics (“Improving Profitability”).
What is Business Process Engineering (BPE)?
Business Process Engineering (BPE) is a set of techniques that connects business analyses to process maps. Technology-focused engineering uses these techniques to manage information technology assets in the context of an organization’s business processes. It integrates insights from business analysis with IT design and procurement considerations (“Learning Objectives”).
BPE Vs. BPM
Business Process Engineering (BPE) is an aspect of the larger discipline Business Performance Management (BPM). BPM is a process that combines IT and process management with analytics for the purpose of optimizing service delivery for a company’s customers. BPE is one of the techniques used to manage information technology assets in the context of an organization’s business processes (“Learning Objectives”). It can also be used to evaluate existing IT assets. BPE is sometimes thought of as a subset of BPM, but there is some overlap between the two fields.
What are the benefits of Business Process Engineering?
Business Process Engineering (BPE) improves the way businesses deliver value to their customers. Simply put, using BPE techniques, companies can improve their reputation with their customers, which can lead to greater loyalty, increased brand awareness and eventually sales growth (“Improving Profitability”). Customers benefit by knowing that they will receive products and services in a timely manner. Employees gain ease of access to information relevant to their jobs and greater control over their tasks through self-service options (“Improving Profitability”). Finally, companies benefit by improving operational efficiency and creating more cost-effective processes (“Improving Profitability”).
How is BPM used in finance?
Finance departments have started to realize the value of business performance management. They use it to predict future cash flows and optimize their investment portfolio. It helps them make better decisions about whether to expand into new markets and products and whether the return would outweigh the risk. BPM is also especially effective for optimizing internal processes, especially those that are important to your overall financial success such as:
Business Intelligence & Reporting – Performance dashboards can flesh out what’s working, what’s not, and how your company is trending over time.
Portfolio Optimization – BPM can help you decide which projects or brands are worth pursuing and which ones are better left alone.
Demand Forecasting – BPM can help you forecast cash flow as well as inventory needs and sales trends.
What are Business Performance Management Tools?
A BPM is usually a software application that integrates with your back-end systems. It provides you with a platform to make the necessary calculations faster and easier than the cumbersome process of manually adding data into spreadsheets or using Excel formulas.
Depending on what type of business (and what industry you’re in) is most important to you, there are two types of BPMs: Financial and Business Process Management (BPM). While there is overlap, each has its own unique functions that can make life easier for managers within your business.
Financial Business Performance Management
This type of BPM is used to streamline the accounting process and provide greater visibility into your financial health. It is also especially useful for forecasting business performance in current or future economic conditions.
Business Process Management (BPM)
Even though it has “Process” in its name, this type of BPM doesn’t focus on the how but rather the what. It collects data from various systems throughout your company and transforms them into specific metrics that can be analyzed to help improve performance. These metrics could be sales, advertising ROI, transaction costs, etc. Just about any activity you can measure in your business can be subjected to BPM analysis for optimization purposes.
While the two types of BPMs have similar functions and purposes, they each have a different approach that makes them more suited to different industries. For example, if you’re a restaurant, real-time ordering capabilities would not be as important to you as financial performance forecasting capabilities. If you’re in the automotive industry, cost allocation analysis is probably your best bet. They key is to know what type of BPM will best serve your needs before purchasing it.
Most companies often use only one type of BPM tool (financial or business process) that’s tailored for their industry and goals. Business leaders are now recognizing that more types of BPMs could benefit their company and they’re beginning to explore the additional measures and data analysis they can incorporate into their systems. It’s inevitable that this trend will extend beyond finance departments to other functions within the company.