The reason behind the concept of Business Performance Management (BPM) is obviously to drive performance through careful analysis of current business practices. To determine the best course of action from a list of possible options, there is a need to collect relevant data to ensure present and future business successes. Identification of reasonable metrics to measure performance is critical to attain short and long term goals, as measuring performance metrics will always result to business process improvement. Having this realization has resulted to the development of BPM software applications with processes that can be broken down into three functional areas.
The first one on the list is data collection. Since performance management always involves gathering of relevant data, typical BPM software packages provide appropriate organization and storage of enterprise data through data warehousing. It is a repository of all information stored into a single corporate memory, organized diligently in such a way that data can be easily accessed for analysis and querying purposes.
Second is report generation. For gathered information to become useful, effective and timely analysis should be done. This is the reason why BPM software applications are made to easily generate reports to purposely determine in which direction the progress of a certain process is heading. This is usually done by using Key Performance Indicators (KPIs).
The last one has something to do with data analysis. After the careful evaluation of certain business process, BPM software packages can also provide relevant information that business owners can use to drive performance towards reaching company goals. Proper use of resources is therefore necessary and taking advantage of BPM software can even result to generation of future performance forecasts, giving business owners enough time to create strategies towards success.