Reign in Enterprise Risk and Cost Through Business Activity Management Technology
As business processes go through a growing sprawl and activities become more centralized, are enterprises equipped to manage resulting risks? Studies suggest that the answer is NO.
Globalization has created a dependence on critical activities outsourced to partners or painstakingly developed global supply-chains networks. It leads to an increasing number of partners and vendors, which has fueled a dramatic rise in the third-party ecosystem for enterprises. With so many partners, risk and non-compliance have got management and board attention.
2005, more than 1/10th of organizations were motivated to reduce the risk, and this has grown to 1 in 5 organizations by 2019. It has even got further exasperated during Covid19 as fault lines got identified during restrictions and lockdown guidelines impacting global supply chains. Last few years saw business activity management emerging as a significant driver for monitoring, tracking, and managing business processes across the enterprise.
Scaling, expansion, and diversification always come with a degree of non-compliance risk, and in 2021, this problem threatens to go out of hand.
● Most organizations will be pursuing recovery, often at the cost of compliance and caution.
● The grassroots empowerment of business units, non-HQ locations, and individual employees that occurred due to remote work in 2020 will continue to influence business processes.
● Necessary changes in business models and operational structures (e.g., resulting from a company acquired by a more successful competitor) will lead to shadow processes.
Business activity monitoring (BAM), is also called business activity management, uses technology to proactively define and analyze critical opportunities and risks in an enterprise to maximize profitability and optimize efficiency.
It is more important than ever to keep a centralized eagle-eye on business activities across the enterprise; BAM helps companies and their leaders. One way would be to keep expanding monitoring tools to detect activities lurking in the shadow, and bringing them under your overall governance ambit to avoid non-compliance, business risks, and debt for future growth. I would recommend using ProcessUnity; it helps customers reduce busywork, streamline regulatory reporting and improve overall visibility into vendor performance. ProcessUnity platform uses a set of accurate data and truthfully answered questions — sourced from requestors, independent reviewers, or your internal due diligence team — remains open to interpretation. Therefore, it is essential to integrate solutions by transferring business-critical information between your systems and your partner network. Thus reducing the subjectivity will help build a standardized process, reducing inconsistencies that undermine vendor due diligence’s integrity and long term partnership.
What Does the Perfect Business Activity Management Landscape Look?
In an ideal world, organizations would have visibility into every single active process. All service components connected to the central IT/ERP hub and data insights revealed by monitoring would always power smarter decisions, profitable moves, and a frictionless operational framework.
But it is not an ideal world. The majority of organizations are still looking to keep pace with the growing risk levels that are an inevitable fallout of rapid/unplanned growth, struggling with fragmented business activities. Having a dependency on outsiders increases your company’s vendor-related risk. Frequently, your vendors have access to your intellectual property or too sensitive customer information.
Fortunately, technological advancements such as edge computing, real-time analytics, data visualization, and predictive insights offer a sufficient answer to this problem. A business activity management solution uses these technologies to do three things:
- Connect with fragmented processes and data sources to detect business activity “events.”
- Process, visualize, and present data alerts to operational stakeholders across various interfaces (dashboards, partner portals, email alerts, mobile notifications, etc.)
- Correlate events and analyze to understand the context, breakdown the situation, and recommend actions through KPIs.
Together, these three functions serve to enhance visibility and predictability across the activity landscape, thereby multiplying your capacity to manage risks.
Features to Consider When Buying Business Activity Management Technology
Business activity management solutions is characterized by several features that set them apart from traditional tracking and governance tools. Unlike a supply chain management platform or an IT process management platform, a marketing automation suite, or an HRMS, the solution seeks to detect, unify, and risk-optimize processes across different business units and operational locations.
The following features aid this:
● KPI configuration/customization to quantifiably measure activity performance
● Near-real-time tracking of four variables: volumes, velocities, errors, and exceptions
● Integrated with but not coupled with other enterprise systems to maintain a unified data flow without creating dependencies
● Context-aware analysis to reduce false positives/negatives, excess computing, and other signs of waste/noise
● The ability to identify the most relevant alerts
● Drill-down to support root cause analysis for activity bottlenecks and predictive insights to minimize the risks of process gaps
● Compatible with a wide range of data formats, sources, and insight delivery options
● Should be able to overcome existing organizational silos and drive process discovery
Along with choosing the right technology, enterprises must also invest in two things: a business activity management centre of excellence before technology implementation. The previous process’s pitfalls are avoided, processes changes are adopted, and the focus is on proactive change management.
It will help lay the groundwork for centralized activity governance on the one hand and obtain employee buy-in on the other.
Available Tools and Solutions for Managing Business Activities in 2021
You can go down either the turnkey platform route when transforming business activity management, or go for suite solutions, better suited for large, mature (therefore more individualized and entrenched) organizations. Here, I have tried to curate some of the top solutions you could look at for 2021:
● IBM — IBM has a wide range of products and services to strengthen your business activity management capabilities and reduce risks. For companies with a target transformation area (e.g., managing cloud activity or managing IT services), IBM is an excellent option due to its targeted services that are aligned together.
● Atomic Scope — This turnkey platform has robust features, including business process modelling, monitoring diagnostics, analytics dashboards, and security. Companies that rely heavily on integration scenarios — across various ecosystems — should consider Atomic Scope to bring their integration landscape under governance purview in 2021.
● Axway 5 Suite — An integration, data, and file transfer management solution, Axway 5 Suite acts as the necessary middleware for harmonizing data flows across disparate business processes. It is best suited for mid-sized to large organizations.
● Microsoft BizTalk — Also, a middleware system like Axeway, Microsoft BizTalk has a dedicated module for business activity management, enabling the management of events and data produced by a BizTalk application. Your stakeholders can access insights in several ways, including Excel sheets, custom desktop apps, SQL server notifications, or the solution’s BAM portal.
● Oracle BAM — Oracle is a leading vendor in business activity management, known for its hyper-customized dashboards that let you view real-time data and perform tactical analysis. You can leverage Oracle’s out of the box dashboards to manage your existing processes with minimal configurations. The solution combines a breadth of data types to arrive at crucial KPIs that indicate corrective action for reducing risk.
Apart from this, you could also look at solutions specific to your business niches, such as Fiserv CheckFree PaymentView in payments or Imatis for healthcare. The Activity Management process component in SAP enables activities to be: planned, logged, monitored and analyzed; sent to internal colleagues for action or information and shared with business partners and customers for collaboration extensively focussed for CRM modules. However, a new startup delivers an add-on product or platform based on your consumption pattern for solving access management process speed and risk issues. SWAMi follows the principle of least privileges. It analyses the user details, role/transaction requested for it to provide the most compliant role for the end user, which meets all requirements. SWAMi is unique as it allows for a compliant access solution by analyzing pre-defined rule set and usage data analysis. It analyses the user’s data (example: user dept, location, company code etc.) who is requesting access and his/her current assignments to arrive at the best-suited role for the user. It ensures that critical roles/transactions are given on a limited basis and are in line with pre-defined rules. I would recommend that you review the solution to reduce risk & operational cost while increasing compliance & speed.
There you have it. Growth and dynamic business adaptability are fraught with risk, but it is possible to mitigate it to a large extent if you are using the latest business activity management technologies. Finally, make sure to uplift your organization’s data literacy levels in 2021 to extract full value from your investment.
Thanks for reading! To continue the conversation or share your thoughts on the challenges of managing business activities with me, please send an email at Arvind@am-pmassociates.com.