Business Activity Monitoring
Sadavarte, CIO, Patni, explains the BAM concept, an extension of traditional
business intelligence that adds event monitoring to scheduled, batch-based reporting.
In todays competitive environment, businesses must accelerate
the flow of information, analysis and decision-making in order to become more
responsive to fast-moving events. This requirement drives the direction of next-generation
business intelligence (BI). It forces the augmentation of schedule-based technologies
with event-based technologies i.e. event-based BI.
The objective behind BAM is
to capture and use event-based operational data
online to create a nimble-footed real-time
enterprise capable of reacting almost instantly.
BAM thus is an extension of traditional BI, adding
event monitoring to scheduled, batch-based reporting
This is where relatively new concepts like BAM hold sway.
The objective behind BAM is to capture and use event-based operational data
online to create a nimble-footed real-time enterprise capable of
reacting almost instantly. BAM thus is an extension of traditional BI, adding
event monitoring to scheduled, batch-based reporting.
BI vs BAM
BAM is a Gartner Dataquest term which has been defined as the concept of providing
real-time access to critical business performance indicators to improve the
speed and efficacy of business operations. At its broadest level, BAM is the
convergence of operational BI and real-time application integration aimed at
business goals but enabled through advances in IT. (Source: Gartner Dataquest)
Conventional BI systems are based on a data warehouse architecture,
extracting, transforming and loading it into a data warehouse, having business
analysts run reports and do the analysis, and having this presented in a suitable
context for business users. It is more of an analysis of data, past (revenue,
profits, attrition, etc) or future (sales funnel, budget, etc) for supporting
meaningful decisions. This enables business users to react to business situations
after they occur. To that extent, traditional BI is static and does not react
to intermediate events, which could be dangerous. BAM takes cognisance of discrete
events and sends signals to the appropriate stake-holders to take corrective
Technically speaking, BAM eliminates intermediate events, takes transactions
directly from the operational systems, correlates them with other information
from data warehouses or planning systems, and then presents the result in the
form of an operational dashboard.
Process models typically drive BAM. This is very different from data-driven
ETL applications, which have little or no knowledge of business processes. BAM
extends a BI systems usage beyond strategic and tactical business decision-making
to the management of day-to-day business operations.
Benefits of BAM
The key benefit of a BAM environment is that operational processes can be monitored
and exceptions acted on in near real-time.
Event-based support for customer-related analytics enables companies to optimise
live interactions with their customers and prospects. A retail-banking customer
who suddenly makes an unusually large deposit may be a prospect for another
financial instrument offered by the bank. On the other hand, multiple ATM transactions
in a short period of time should be an input for a banks fraud management
Most CFOs and their teams are under pressure to deliver financial
information in a timely manner. Sarbanes-Oxley has only added to the expectations
from information management processes. Financial teams are no longer tied to
lengthy period-end financial closing processes, or cumbersome, manually-intensive
report preparation processes that precede actual performance reporting and analysis.
The potential reporting of corporate exposure depends on events. Examples are
requirements to notify shareholders when there is a material deviation anticipated
from stated goals such as acquisition or loss of a major customer. Airlines
can use BAM for taking dynamic decisions of pricing based on real-time demand.
When a product manufacturing company suddenly experiences a deviation (such
as a sudden increase of cancellations of orders), the demand forecast goes for
a toss and the contract manufacturer must be notified quickly. In such cases,
traditional scheduled reporting proves inadequate, and BAM is useful.
In short, quick knowledge-based operational decision-making, reduced operational
costs, improved process performance (and hence improved ROI) are the benefits
expected from BAM.
Another recent trend in BI analysis tools has been to add a performance management
capability that enables business users to compare the analytics produced during
BI processing to actual business goals and forecasts (i.e., it puts BI into
a business context). Performance management products extend the use of BI from
measuring business performance to managing it.
BAM as a predictive tool provides real-time access to critical business performance
indicators to improve the speed and efficiency of business operations. To that
extent, BAM must converge seamlessly with business process management (BPM).
BAM brings the near real-time world of the BI operational data store together
with network and systems management (NSM) monitoring and BPM through integration
brokers and the shared message bus. (Gartner)
BAM in India
The investment in BAM depends on the business process being
monitored and the cycle of decision-making and review. It further depends on
the maturity of the organisation in adopting the same.
Although BAM initiatives still have low priority within
most organisations today, we expect future adoption to increase at least
in certain sectors. The finance and insurance sectors will be early adopters
It will hence be difficult to justify investment in BAM for
traditional annual budgeting processes. However, when the timing of decisions
or potential reporting of corporate exposure (SOX) depends on events, BAM will
turn out to be a necessity.
Although BAM initiatives still have low priority within most organisations today,
we expect future adoption to increase at least in certain sectors. The finance
and insurance sectors will be early adopters of BAM.
BAM is yet to find a strong foot-print in India. Companies are still struggling
with disjointed applications. Their priorities today are consolidation, integration,
conventional BI, BPM, etc. This will help them become mature to adopt BAM.
CIOs should be watchful before they decide on another tool for BAM. They must
look at their overall IT strategy and look at the same in an integrated manner
leveraging the investments in EAI, BPM, and NSM too.