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January 16, 2007
A Reader Commented... BPM Business Case...
A few days ago I received an email from someone who stumbled over this weblog. Although a business professional, this person was not a BI or BPM professional. His email was very critical, asking how Hyperion can make so much money and be successful in the market, with such an intangible product as software to produce information. Isnt it all hype?
I thought it was quite a valid question, and would like to use this space to point out that management information actually is quite tangible if you think about it.
Ofcourse, in the end, it is not the software that improves business performance (other than Hyperions business performance ;-), it depends on what you do with it. But most definitely there are tangible benefits in terms of revenue growth, customer loyalty, the right cost savings etc. Let me give a few examples, where BI and BPM not only improve business but also simply do good:
- A lot of work in closing the books every quarter is in manual reconciliation. If you can get rid of the spreadsheets you can do the process in a 1/3 of the time. There is a correlation between how fast you report to the shareholders and the price/earnings ratio. This is not the same as laying people off, just giving them the time to actually analyze the data (and become more skilled and competitive workers)
- Sharing management information with all employees provides feedback. There are countless examples on how that positively changes morale. People want to do a good job, and hear about it. Measurement drives behavior, both positive and negative.
- Sharing information with suppliers makes the relationship tighter. Think of car manufacturers who have built a complete ecosystem of suppliers, in which also the suppliers collaborate with each other. This goes beyond price-dominated negotiations, and builds sustainable relationships. This is good for long term employability
- If you cant compete on price and not even on product quality (I mean, are there still bad products out there?), what do you compete on. On service!! There are countless examples on how sharing information with customers on the business relationship you have with them increases customer loyalty, certainly when customers use this information in their own lives or businessess
In the end the business case is really simple: can you run a business without management information? How to establish a newly introduced product is better, how rationalized purchasing leads to cost savings, how a new ad campaign is effective? You simply need objective feedback (= management information).
Posted by Frank Buytenkijk at January 16, 2007 11:59 AM
