15 March, 2007

BAM, CPE, BEM, or Operational BI, what are the differences?

Business Intelligence (BI) in many companies has been used for several years to monitor, report and analyze, and improve business performance. Until now, most BI applications have focused on managing strategic and tactical business plans, but now Business Activity Monitoring (BAM), Complex Event Processing (CPE), Business Event Management (BEM) and/or operational BI could add a new dimension to this otherwise mature software area.

Business success demands continuous visibility into operations and processes. Operational BI or “awareness” should reduce the time between the occurrence of a business event and initiation of a response, helping a company act on competitive opportunities. Practically all operational areas need increased operational BI - awareness. Order cancellation, a late order delivery, an imbalance between resource capacity and demand, and a stock-out are just a few examples of events that require immediate action.

Increasingly, lines of businesses realize that to become more responsive, they must accelerate the flow of information, analysis and the decision-making. Major benefits of operational BI - awareness, which extend beyond strategic and tactical decision-making to daily management, include:

  • A real-time visibility into business processes (this would require automated processes through the use of Business Process Management suites (BPMs)
  • An increased business agility and flexibility
  • A maximized use of resources (human mostly)
  • Minimized risk
  • A collaboration with a broader set of participants

Business Activity Monitoring (BAM) is an event stream capture and has been around for many years. This is a technology and a technique that provide real-time access to key business metrics. The reasons for deploying BAM are to monitor key business objectives, anticipate operational risks, and reduce the time between a material event and taking effective action.

There are many BAM products from platform (e.g. IBM Websphere Business Monitor, Oracle BAM, BEA ProActivity Process Analysis (PA), Aptsoft product.

Business Event Monitoring (BEM) is a way to get machines in real-time to alert people when a business process is going wrong and needs human attention to get back on track. BEM focuses also on the business rules and then alerts humans when something goes wrong. The goal is to speed processes up by minimizing time lost because of an exception. As previously written, BAM monitors business processes in real time in an effort to support operational improvements. Where BAM typically concerns itself with managing a single business process, BEM is generally concerned with monitoring all current processes to provide meaningful alerts and analytics to users. We should think of BEM as real-time data mining. While BEM is not yet part of many vendor offerings, this technology is making an appearance in some products. Vitria Technology's Resolution Accelerator provides BEM capability. Lombardi Software's Undercover Agents provide also BEM functionality.

Operational BI is also about the use of operational intelligence to manage and optimize business processes. When this is deployed, the huge analytical power of BI is unleashed on everyday processes that can generate improvements in real-time. This can exist alongside traditional BI, helping organizations to improve business operations both at strategic and business process levels.

Operational BI is the way BI vendors try to sell “type of BAM” applications, but…

Currently, most of Operational BI products refer only to data sensors.

Are they linked to BPM? It seems not because they still continue to use ETL and data access replication principles. Additionally BI vendors are not the best vendors to follow some of the trends about BEM which is often seen as an extension to BAM.

Some vendors like Systar pretend to be “BAM” but are in the same basket than the BI vendors in that case. And only BPM vendors with BAM features are able top provide such link. In counterpart BAM products often do not store good historical data like for example a BI do. It is then difficult to make comparison between operation data with historical data.

As already described, the ultimate goal of BAM environments is to immediately react from dashboards and the goal of BEM is to link the detection of events (including compound events collected for example by CEP) and then provide different management features like : diagnosis help, root cause analysis, management by exception. All of those require BAM (or operational BI) to work closer with the event generator: BPM in particular or other sensors. If we link those at data level only we miss the point. That means that every time we change a process we would have for example to reconfigure the data access, KPI and so on. Operational BI products are not
bad solutions but good for some customers and not enough for others.

The term BAM may become out of vogue in the future and vendors will turn to marketing their products under the banner of Operational BI. BI and BPM are two separate technology areas, complement each other and will converge over the next three to five years. Currently they are being used today in their respective worlds with very little overlap.


Anonymous said...

Operational BI is now the in thing. In India even mid size companies like Pidilite has rolled out 1200 users of BI enteprise wide.

Soumadeep said...

Nice article... I have been following the BAM space since Gartner coined it. What I am yet to comprehend is that most of the BI and ETL players are fudging the space and trying to pass of their existing product as BAM/BPM tools.

I believe the key areas in BAM which need to be highlighted are:

1) understanding how intangible benefits can be identified and equated to the ROI
2) standardization of KPI as a specification, something similar to a WS-Policy
3) Providing a supporting framework such as SOA to standardize data exchange format