The Hindu Business Line : BAM for the buck

The other day, as I watched my friend in his office going through a heap of paperwork, figuring out his workday, I mentioned to him that he should deploy a BAM solution to help sort out his life.

My friend had not heard of BAM and wanted to know more. "What is this BAM? Yet another tech term that promises to revolutionise the way business is conducted," he asked.

In today's competitive environment; businesses must accelerate the flow of information, analysis and decision-making in order to become more responsive to fast-moving events. This is what drives the next-gen business intelligence. It forces augmentation of schedule-based technologies with event-based technologies, that is, event-based business intelligence (BI). BAM thus is an extension of traditional business intelligence, adding event monitoring to scheduled batch-based reporting.

Beyond BI

So what was the difference between BI and BAM, my friend wanted to know.

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 effectiveness 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.

Conventional BI systems are based on a data warehouse architecture designed to get the information: 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 an analysis of data — past (such as revenue, profits, attrition) or future (sales funnel, budget and so on) to assist decision-making. This enables business users to react to business situations after they occur. To that extend, traditional BI is static and does not react to the intermediate events, which could be dangerous. BAM takes cognisance of these discrete events and sends signals to the appropriate stakeholders to take corrective actions.

Technically speaking, BAM eliminates these intermediate events and takes transactions directly from the operational systems, correlates it with other information from data warehouses or planning systems and then presents them 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 the use of business intelligence system beyond strategic and tactical decision-making to the management of day-to-day business operations.

So, are people already using BAM, my friend asked. BAM has been used for a large vehicle leasing company in the US, resulting in better fleet performance and lower cost of operations.

`Sophisticated watchdog'

BAM sounds more like a sophisticated watchdog, observed my friend. Yes, operational processes can be monitored and exceptions acted on in near real-time.

For example, any event-based support for customer-related analytics enables companies to optimise live interactions with 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 to an effective fraud management by the same bank.

Even in a job profile, most CFOs and their teams feel the pressure to deliver financial information on a timely basis. Sarbanes-Oxley compliance requirement has added to the expectations from information management processes. CFO teams can no longer remain tied to lengthy period-end financial closing processes or cumbersome, manually-intensive report preparation processes that precede actual performance reporting and analysis. Now the potential reporting of corporate exposure depends on events.

The best example would be the requirement to notify shareholders whenever a material deviation is anticipated from stated goals such as acquisition or loss of a major customer.

Even airlines can use BAM in taking dynamic pricing decisions based on the real-time demand for services.

BAM has still not found a strong foothold 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 enough to adopt BAM. But companies need to be watchful before deciding on another tool for BAM. They must look at their overall IT strategy in an integrated manner, leveraging the investments in the EAI, BPM, and NSM areas.

(The author is CIO, PATNI)