BAM! Business Activity Monitoring Seen Ready for the Mainstream

Gartner says BAM driving faster responsiveness; webMethods identifies strategies for optimizing process performance

Gartner says BAM driving faster responsiveness; webMethods identifies strategies for optimizing process performance

Fairfax, VA — August 3, 2006 — Business activity monitoring (BAM) is becoming increasingly critical as enterprises seek to gain competitive advantage by becoming able to respond more quickly to changes in their business environments, according to new reports from technology research company Gartner and B2B integration specialist webMethods.

According to Gartner, in its report "Who's Who in Business Activity Monitoring, 4Q05," "business activity monitoring is a technology and a technique that provides 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."

A BAM system works, according to Gartner, "by collecting business events across multiple applications, extracting relevant information from the events to update simple and derived metrics, and using rules to watch the metrics for changes that indicate a threat or opportunity."

In the new report "Hype Cycle for Investment Services, 2006," Gartner analysts identified technologies significant to the investment services industry and suggested that business activity monitoring is the most significant technology for helping companies in this industry achieve rapid innovation because it allows them to detect events, filter them and trigger business process management (BPM) solutions.

"Business activity monitoring is the only technology in the 'Gartner Hype Cycle' rated as high impact (enables new ways of performing vertical applications that will result in significantly increased revenue or cost savings for an enterprise) and capable of reaching maturity in less than two years," said David Furlonger, managing vice president at Gartner.

Shaping Process Behavior

For its part, webMethods issued a white paper called "Business Activity Monitoring: The New Face of BPM," in which the company identifies what it calls "second-generation strategies for business activity monitoring." Based on the experiences of a number of Global 2000 enterprises, the white paper seeks to identify specific strategies for process assurance, management and improvement that these early adopters have pioneered and implemented within their operations.

Using scenario-based examples, webMethods also seeks to demonstrate how these strategies can be applied to support a number of strategic business initiatives, including just-in-time manufacturing, business process outsourcing, order-to-cash, deadline and exception management, regulatory compliance, and various process improvements initiatives, such as Six Sigma.

"BAM is the operational dashboard for managing business processes," said James Crump, senior director for strategic business solutions at webMethods. "It provides users with the ability to anticipate and capitalize on business change so that they can better rectify the deficiencies it uncovers while continually optimizing process performance."

Crump suggested that BAM isn't simply a tool for measuring process performance, but rather an emerging fundamental application for shaping process behavior, allowing enterprises to gain greater real-time control over their most critical business processes.

New Strategies

By leveraging these capabilities as a component of an overall business process management and business integration strategy, enterprises have implemented a number of new business strategies, according to webMethods. These include:

  • Business Assurance and Visibility: Organizations employ leaner business models while taking strategic advantage of the ability to outsource secondary functions through the use of BAM for service-level agreement (SLA) assurance. In this context, BAM ensures that required process steps occur on-time as planned, with automated alerts highlighting exceptions. With the addition of statistical modeling, which transforms observed process behavior into an understanding of what's normal and what's not, enterprises can also automate the detection of process or transaction defects, such as faulty orders.

  • Control Services: By tying business process execution to assurances that specific conditions were met, enterprises can further automate these processes, yielding additional improvements in efficiency. This same approach is also critical to BAM's use as a platform for automating regulatory compliance via continuous controls monitoring. In addition, BAM's ability to regressively prioritize business process steps to meet specific business objectives "on-the-fly" has proven significant in a number of key ways, such as in "load-balancing" in-bound traffic to ensure the optimal use of call center resources.

  • Complex Pattern Recognition: While business intelligence tools have long offered the ability to analyze warehouses of data, they're of far more limited value in evaluating the real-time implications of transitory events. That's where BAM steps in with its automated ability to detect previously unseen relationships between a variety of disparate factors. As a result, enterprises can more quickly recognize and respond to changes impacting their operations. At the same time, this ability to automatically detect and drill down upon cause and effect relationships is also an important diagnostic tool for process remediation.
According to webMethods, by employing these strategies, a Fortune 500 manufacturer reduced problem orders those that required manual intervention or were otherwise rejected by 75 percent while reducing the time it required to correct these problem orders by 85 percent. As another example, a major pharmaceutical company is leveraging BAM to ensure patient safety in the distribution of drugs, webMethods said.

Visitors can download the report at

Additional Articles of Interest

— For more information on solutions for business process management, see "BPM Rising," the Net Best Thing column in the October/November 2002 issue ofiSource Business (now Supply & Demand Chain Executive) magazine.

— As technology's benefits hit the wall, one provider believes business process management can boost competitiveness. Read the article Finding Adaptability in BPM for more on this topic.