Breaking Down Silos With BPM

Business performance management software can crack open data silos by consolidating information in one repository. But breaching cultural barriers is a bigger challenge.

What's the route to maximum enterprisewide performance? Ultimately, it's the path of openness. That answer may sound like something you'd expect to hear from a mystical guru, but it's rigorously pragmatic. In an open enterprise, the various branches of the organization share information seamlessly with one another. Instead of pursuing hidden agendas, they collaborate in networks founded on transparency. Instead of indulging in turf squabbles and political infighting, they work toward overarching goals.

But even a basic level of collaboration eludes many businesses. "Engineering may come up with what they believe is a great design but then find out later that manufacturing can't make the design work because it's too complex to be practical," says Robert Kugel, vice president and research director, financial performance management, with Ventana Research in Belmont, Calif. "It all stems from folks not communicating or interacting well."

"If the sales department plans to sell 100 units, then manufacturing needs to know that," notes Craig Schiff, CEO of BPM Partners in Stamford, Conn. "And customer service groups need to know that to support that level of sales."

Unfortunately, the road to improved communication is littered with entrenched obstacles. Chief among them is a lack of standardized data. Here's a scenario that's familiar to most finance executives: When asked to predict revenue for an upcoming time period, the sales department turns in a rosy forecast, but marketing's forecast is notably less optimistic -- and finance's is downright gloomy. Who's right? In the absence of consistent, verifiable data on which to base forecasts, it's the department with the most clout.

Organizations that want to move toward greater openness must start by identifying the barriers that impede communication. "Companies face two types of silos: the data silos and the cultural silos," says Schiff. "Both are tough to crack because it's difficult to pull data together from disparate sources and equally difficult to get everyone to work together."

Business performance management (BPM) software can help companies break through data silos by consolidating information in one repository, enabling everyone to work from the same set of data. Breaching the cultural walls that separate departments is more challenging; die-hard silo stalwarts will need help to improve their cross-functional collaboration and communication skills. But BPM tools can play a key role in providing that help.

"BPM gives people a better view of the end-to-end process and the role they play within that process," observes Ralph W. Canter, director, CFO advisory services, with KPMG LLP in St. Louis. "It shows how one department's performance affects another department and how these cause-effect relationships link together."