What is business activity monitoring (BAM)?

Through observability and a comprehensive understanding of key business operations, enterprises can optimize business performance by using data into informed business decisions. Business activity monitoring prioritizes the analysis of key performance indicators (KPIs) and service level agreements (SLAs) to help teams surface actionable insights from their data.

BAM is used to collect data related to business operations and to paint a dynamic picture of how business functions can be improved to mitigate risk, increase profitability and improve user experience. Business activity monitoring connects business and IT departments by aligning teams around shared objectives. It also provides real-time information about business performance, ensuring informed decision-making.

Monitoring tools give teams a more comprehensive understanding of business operations and a view of real-time performance, allowing them to proactively improve business functions instead of reacting to issues. To do this, business leaders can monitor historical data by using business intelligence (BI) software and improve workflows with business process management (BPM) tools.

To gain a clear understanding of business operations, key performance indicators (KPIs) must be set to monitor performance. KPIs vary depending on the product or service in question and the organization’s goals and functions. They can include metrics such as application usage, runtime errors, unplanned downtime, return on investment (ROI), or sales totals.

Creating valuable KPIs means that business leaders should carefully consider and define performance expectations within service level agreements (SLAs), which detail the services business users expect to receive from a service provider. SLAs should set out the clear terms of service a user can expect, while also explaining how service or product performance are measured and communicated to all parties.

These standards should be discussed, developed and established in cooperation with all stakeholders. An organization that thoroughly understands how it should function or how it is required to operate under an SLA can more accurately gauge performance levels. This deeper understanding also enables the organization to glean valuable insights.

Once metrics are set, BAM systems aid in the process of data aggregation—the collection and summary of data from multiple business applications. Business activity monitoring solutions provide dashboards with clear visualizations of key data and make them accessible to all team members.

Teams can also set triggers within BAM systems to automatically take certain actions or collect more data when certain metrics are met (or not met). For example, teams can use automation within a business activity monitoring platform to set an alert based on higher-than-average credit card transactions for a certain time frame. If this alert is triggered, the system can automatically pause payments until the increased volume can be further investigated.

The business activity monitoring methodology focuses on using analysis to reduce the time between data collection and decision-making. To do this, business leaders use tools from business intelligence (BI) and business process management (BPM) methodologies.

Business intelligence (BI), business process management (BPM) and business activity monitoring (BAM) overlap in several functions, and their overall methodologies can be used in complementary ways to help improve business processes.

Business intelligence refers to a series of technologies and strategies that allow business analysts to gain simplified access to data from multiple sources. The following types of data help provide a deeper understanding of business operations.

• historical data
  
• third-party vendor data
• structured data such as financial transactions
• unstructured data like text from survey responses
• log files from websites

Business process management enables business leaders to build on the work of BI by analyzing the large amounts of data collected from various sources. This analysis helps them develop models and strategies to optimize specific business processes.

For example, an organization can analyze user data to identify the most frequently asked questions. Then, teams can train chat bots to address these common inquiries, freeing up extra time for customer service employees.

Business activity monitoring takes both the data collection and visualization of BI and the analytical strength of BPM to create a holistic approach to all business activities. While the focus of BPM is on improving individual business processes, BAM considers every process, as well as how the different processes affect each other. BAM tools are also able to use data to predict future problems and troubleshoot them in real-time.

Together these approaches can help organizations develop end-to-end strategies to improve business functions.

Using business activity monitoring tools allows business analysts to identify areas for business process improvement. BAM can help an organization:

• Predict future trends and gain greater adaptability by being able to respond to emerging trends and patterns in real-time. BAM systems offer dashboards that configure and consolidate data and analysis to make patterns in data easily viewable. When business processes are clearly understood, resources can be reallocated to meet the most important objectives.
  
  
• Give teams end-to-end visibility over business processes, allowing business and IT teams to weigh in on possible improvements, roll out new features and understand user patterns.
  
  
• Identify bottlenecks that can slow application performance, the production of manufactured goods or the delivery of consumer services.
  
  
• Find the root cause of issues and troubleshoot problems in real-time.
  
  
• Reduce IT environment costs by identifying inefficiencies in business processes, such as identifying supply chain slowdowns or unnecessary cloud spend.