One interesting issue arose when we looked into the requirements for Business Activity Monitoring (BAM). The main task to answer is: "How is the organization performing?", "Are we more effective than last year?". Key Performance Indicators (KPI) is a well established jargon, but how to achieve them?
A KPI can only be answered over time, and for large governmental organizations, that's a long time. Just reorganizing may take a year, and making the new organization perform better takes longer than that.
To measure you have to have some measuring points, and they are to be compared over time. It is not about a business performance measuring tool by itself, it is about what business activities where performed, and how much effort some business entity put into one such activity.
There are three challenges in this:
- First a reorganizing usually
affects how account dimensions in the economical systems are organized, that
makes the accounts discontinuous and disturbs the measurement of the effort put in. There must be defined some long lasting Business Effort measured in cost (Business Cost, BC). When the account dimensions are defined, they must also map to this BC, so that we keep continuity.
There are challenges to this; "How much does an IT system cost?", "What is the price of this automated task". (Many organizations have a hard time identifying this).
- Secondly the Business Activity (BA) itself over time is performed in different IT systems or done manually. From experience with performance tuning, I believe it is obvious that the IT systems must support a long lasting BA that survives various implementations of that activity. That is what the Enterprise Process Log (see Enterprise Wide Process Handling) is all about. This is where we collect and keep the BA's.
- The BC and BA must have a comparable period of time.
KPI1=BC1/BA1 for a periodIn our domain a BA would be "Number of tax statements processed" or "Complaints handled" during some time period. The BC would be "Cost of people and systems for assessing tax statements", and "Cost of complaint department", during the same time period.
KPI2=BC2/BA2 for a period
We will collect BA's from the Enterprise Process Log, and use our data warehouse for the compilation with the BC's and the analysis. The analytics might be in Excel, although we may buy something for this analysis and reporting.
It is the long lasting measuring points and a standardized period of time that is the real value.
The BAM challenge by Tormod Varhaugvik is licensed under a Creative Commons Attribution-ShareAlike 4.0 International License.