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Monitor your outsourcing
BAM extends business intelligence system usage to the management of day-to-day operations
 By Vinod Sadavarte
In today’s competitive world, the sheer speed of response decides the difference between success and failure. Companies are able to sell more, service their customers better, introduce new products faster, manage lower inventory carrying costs, and capitalize on new business opportunities sooner than their competitors solely because of their agility and ability to react faster.
At one level this calls for managing the operations better, thereby ensuring efficiencies and reduced costs. At another, this requires proactively monitoring the pulse of the customers and markets, and adopting appropriate strategies to beat the competition.
Today, Business Process Outsourcing (BPO) is an irreversible business reality that most companies in the world are waking up to. Increasingly, business critical processes are being outsourced and offshored as global organizations derive substantial business benefits.
BPO deals in the BFSI sector involve outsourced processes such as credit card transaction processing, loan application processing, insurance applications/claims processing, benefits administration, and payroll. These processes require direct contact with the customers of the outsourcing company, and call for stringent monitoring to ensure quality and control so that the service to the end customers is not impacted. More importantly, the end customers need proactive and timely inputs for making decisions.
Technology today provides the ability to ensure success with applications like BAM (business activity monitoring) that outsourcing companies can use for monitoring their outsourcing deals.
BAM is a term Gartner coined for the solution which drives innovation by detecting events, filtering them and triggering business process management (BPM) solutions. Technically speaking, BAM eliminates intermediate events and takes transactions directly from the operational systems, correlates them with other information from data warehouses or planning systems, and then presents them in the form of an operational dashboard.
BAM extends business intelligence system usage beyond strategic and tactical business decision-making to the management of day-to-day business operations. Its aim is to provide instant awareness and an appropriate response to relevant events across the entire enterprise. It provides the ability for the organization to have interactive, real-time and proactive alerts and dashboards for monitoring its business processes and services. It provides timely information to managers and operational staff to make better business decisions and take corrective action if the business environment changes.
For example, if a bank outsources its credit card transactions to an outsourcing provider, the bank can be assured that the BAM solution will monitor the requisite processes and trigger the required alerts and warnings which may have been overlooked in a traditional environment. Thus, if the outsourcing provider makes unauthorized transactions on behalf of the bank, and the security systems are detecting similar transactions across multiple locations, they may trigger a report which shows the security flaws in the outsourcing provider’s system.
If the vendor has an effective BAM solution in place, control points can be installed at critical junctures to monitor important deliverables, SLAs and KPIs. Should the vendor not adhere to regulations like SOX, or slip on delivery deadlines, customized reports with preconditioned alerts can be triggered to the outsourcing company. This will save millions of dollars in fines or delays by taking early action based on these early warnings.
Though all vendors have some reporting format, the singular or consolidated view of multiple processes or multi-country processes need more sophisticated systems than EAI, BPM or BI. BAM fits the bill.
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