Three letter acronyms are popular because they are easy to remember, but life becomes a little complicated when different interest groups or segments of an industry claim ‘ownership’ of the same expression. For many years the IT industry has lived with two versions of the initials BPM. The performance management industry laid claim to the acronym as Business Performance Management (BPM) but another group of practitioners labelled the same acronym, Business Process Management (BPM). Gary Simon, FSN’s managing editor takes a look at the issues.
The story could have rested there had it not been for recent developments indicating that these two management processes are in fact coalescing, especially in areas such as financial reporting. The quest for slicker reporting processes has heightened the finance function’s interest in business process automation. This raises the question of whether the goal is best achieved using BPM or BPM!
The answer of course is, as always, that it depends - but first some definitions. Business Performance Management (and please forgive the brevity) collectively describes core applications and processes that typically govern, strategy development, budgeting, planning, forecasting, consolidation and financial reporting. Until quite recently, most of the software industry’s effort has been focussed on assembling integrated business performance management suites that cover the breadth of this territory. On the other hand, Business Process Management is more keenly focussed on individual processes from scratch and typically, independently from a particular software solution.
Regardless of approach, finance functions are looking for enhanced productivity against the backcloth of mounting pressure on the reporting cycle and constant regulatory change.
The business performance management industry has responded well to the challenge and the big three players such as Oracle, SAP and IBM have developed (or acquired) applications designed to control processes more tightly, such as workflow, task management, document management and the more specialised disclosure management. These inject process support where there was none before, especially around documents, formal and informal communications. Smaller vendors such as Tagetik (see earlier FSN article) have similar offerings and some of the emerging cloud-based vendors are following suit.
The benefit of the all embracing application suite is that process automation is embedded in the offering rather than being positioned as an adjunct or afterthought. Indeed, some of the task management is often capable of firing off the next process step in the underlying application and similarly, activities completed within the process can be notified to task management to automatically initiate the next phase of the process of the reporting process.
A good example is Oracle Hyperion Financial Close Management, which is designed to replace ring binders of procedures and spreadsheet checklists that normally accompany the close process but also goes well beyond this limited ambition.
Oracle Hyperion Financial Close Management (FSN wrote about it here) leverages Oracle Fusion Middleware technology to enable Web services-based integration with EPM, ERP and other systems involved in the close process. This means that automated tasks, such as the upload of a submission from an entity can be automatically notified and combined with manual tasks for centralised tracking and status reporting.
Despite this sort of capability there remains room in the market for independent approaches that seek to pave over the gaps in automation in another way. Trintech, for example, is a rising player in this space with a rapidly broadening range of applications that support not only close tasks in financial reporting but also cover off risk management and compliance. (see FSN’s interview with Paul Byrne, Trintech’s CEO)
By contrast, Business Process Management or Business Process Automation specialist, Runbook has built a business specifically around automating reporting processes in the SAP stable. But how does a Best of Breed solution work and why should it work better in SAP environment than a native SAP application? Curiously it is sometimes easier to superimpose a Best of Breed solution on an ERP system rather than introduce additional modules from the vendor. The simplicity of some Best of Breed solutions means that they can sit astride existing architectures, taking or placing information as required but without being drawn into the complexities of the underlying technical architecture. In essence the solution has to leverage SAP processes, data models and procedures, invoking them as needed but without being so tightly bound that drastic changes are needed to the underlying code. ( FSN took a look at Runbook here)
Other process automation solutions are even further removed from the underlying systems. The key to their success is strong domain knowledge about the particular processes in hand and the striking simplicity of their approach. A relatively new vendor in this space is Silicon Valley Accountant (SVACPA) and its Accelerated Financial Reporting Management product (AFRM). This is turn is based on the Hyland Software’s very established ECM Enterprise Content Management Solution. AFRM ‘sits’ astride the underling reporting process guiding users automatically through each process step and providing document management, workflow, task and issue management, embedded metrics together with an audit trail of the entire process. Although early days FSN has seen some impressive user references and rapid reductions in process effort.
Finally, suppliers of pure Business Process Management software such as Nimbus make a valuable contribution to the process debate. Their Nimbus Control software encourages a completely fresh examination of processes and interestingly allows the cost of each activity to be captured in the process workflow as well as strong educational tools and techniques to help users understand and refine processes.
So what’s the best approach? There isn’t a ‘one-size-fits-all’ answer to process automation, but if there is one common theme that emerges it is that the simple discipline of reviewing the process (guided by appropriate expertise) is itself very valuable. Most organisations’ processes grow like topsy over time with addition after addition obfuscating the underlying purpose. Regardless of whether an organisation takes a BPM approach or a BPM approach benefits are sure to flow from a thorough appraisal of the whole process. The rest is up to the technical architects to decide which platform works best in your circumstances.
