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Craig Schiff

I am very excited about this opportunity to share my perspectives and experience in my BeyeNETWORK Blog. For those of you who may not have read my articles and newsletters over the past few years, I hope you will appreciate a vendor-independent perspective on all things related to Business Performance Management (BPM). I focus on key topics organizations should consider throughout their BPM project lifecycle, from early stage requirements definition and justification, key measure development, vendor selection and finally, successful deployment and rollout. Of course, market trends and vendor updates will also be part of the mix. Please stop by on a regular basis to see what's new, and to make this interactive, please share your opinions. If you have a specific question, contact me directly at cschiff@bpmpartners.com.

About the author >

Craig, President and CEO of BPM Partners, is a pioneer in business performance management (BPM). Craig helped create and define the field as it evolved from business intelligence and analytic applications into BPM. He has worked with BPM and related technologies for more than 20 years, first as a founding member at IMRS/Hyperion Software (now Hyperion Solutions) and later cofounded OutlookSoft where he was President and CEO.

Craig is a frequent author on BPM topics and monthly columnist for the BeyeNETWORK. He has led several jointly produced webcasts with Business Finance Magazine including "Beyond the Hype: The Truth about BPM Vendors," the three-part vendor review entitled "BPM Xpo" and "BPM 101: Navigating the Treacherous Waters of Business Performance Management." He is a recipient of the prestigious Ernst & Young Entrepreneur of the Year award. BPM Partners is a vendor-independent professional services firm focused exclusively on BPM, providing expertise that helps companies successfully evaluate and deploy BPM systems. Craig can be reached at cschiff@bpmpartners.com.

Editor's Note: More articles and resources are available in Craig's BeyeNETWORK Expert Channel. Be sure to visit today!

It's that time of year again when we are  pressed to make predictions about the next steps in the evolution of our chosen field of expertise. I feel very confident about this year's predictions, and many trends noted below are already in progress. If I missed anything major or you disagree with my assessments, feel  free to add a comment.

            Ease of Use

After many years of adding new capabilities today's performance management products are feature-rich, but more complex, and therefore somewhat more difficult to use. We expect to see more of a focus in the coming year on ease of use, which will lead to greater adoption. How is ease of use accomplished? By redesigning user interfaces to be more intuitive, and to speak the language of the end user, not IT. Unified all in one solutions are also important to ease of use by providing a single interface to learn and reducing the need to move and maintain data amongst several standalone modules. We have seen certain buyers making ease of use their top purchasing criteria. This is specifically true in the higher education vertical, as well as midmarket companies in general.

 

Vendors leading this trend: XLerant, whose primary selling point is its wizard-driven front-end,  Longview, OneStream, and Tagetik who provide powerful, but unified solutions, and AxiomEPM who offers industry-specific solutions that speak the language of the users.

 

Embracing MS Office

 

Since many companies are trying to move away from spreadsheet-based systems, vendors  have interpreted this to mean they are looking to get as far away as possible from spreadsheets themselves as well as other Office tools. This is simply not the case. These companies are looking to move to a real industrial-strength system, but there is still an important role for the familiar and powerful Office tools. As a matter of fact, in our most recent BPM Pulse survey 79% of users said they still planned to use spreadsheets even after implementing a new performance management system. So, what's the answer for vendors? Embrace Office documents. Tie them to a centrally controlled and secure system, but let users take advantage of their interface of choice. They can leverage their familiarity with these tools, take advantage of advanced and flexible functions that may not exist yet in their performance management applications, and maintain compatibility with existing models they have built over the years.

 

Vendors leading this trend: Vena Solutions utilizes Excel as its primary user interface and has seen significant momentum in the market because of this design choice. deFacto Global and Altius have taken a similar approach. Adaptive Insights released its OfficeConnect solution to great fanfare this year which lets users update Office documents with Adaptive Insights data in real time. Host Analytics took a different approach with its AirliftXL capability which lets users move models created in Excel into native Host Analytics models with minimal effort.

 

      Analytics and Data Visualization

 

With the large amounts of data that have been collected in performance management systems, there needs to be a better way to understand the story behind the numbers. Standard reports, and even dashboards, are fine for the monthly reporting package. Those users in Finance that typically receive these reports are familiar with them and can easily find what they are looking for. As performance management systems spread throughout the company they reach a more diverse end user community. For those users to understand what they are looking at they need the information presented in a way that is more graphical, more intuitive, and more interactive. Even in Finance, if they are being charged with improving forecast accuracy they need better tools, such as predictive analytics.

 

Vendors leading this trend: The big vendors such as SAP, Oracle, and IBM have an arsenal of business intelligence (BI) tools that they can apply to their performance management solutions. Other vendors such as Tidemark have developed their own robust  analytics and data visualization capabilities. Still other performance management vendors have acquired/licensed and incorporated BI solutions into their performance management offerings. Examples are Adaptive Insights with myDials, Centage with BI Metrix, and Host Analytics with Birst.

 

Collaboration

 

This term has been thrown around for years. For most vendors it has meant something straightforward and simple such as being able to attach a document to a budget submission to help explain things to anyone reviewing the submission. Other vendors focused on collaboration in the last mile of finance: disclosure management. While this is all fine and useful, it didn't go far enough.  According to the most recent BPM Pulse survey users want collaborative capabilities across all areas of performance management: budgeting, forecasting, strategic planning, consolidation, performance reporting, etc. They also want a range of collaboration features: the aforementioned document sharing, but also submission, review and feedback workflow, insertion of text commentary in reports and dashboards, notifications and alerts, and in-context threaded discussions. As performance management has reached wider and deeper across the organization these capabilities have taken on added importance.

 

Vendors leading this trend: Decisyon makes collaborative decision-making the focus of its performance management offering.  Adaptive Insights, Host Analytics, Longview, OneStream, Tagetik, Tidemark,  SAP, IBM, and Oracle all offer advanced capabilities in this area.

 

New Era of Competition

 

The move to cloud-based solutions is no longer a prediction for performance management, it's a reality. The prediction is how this shift will change the relative standings of the vendors in the performance management market. For many years the largest vendors in this market (IBM, Oracle, SAP) won many deals based on the robustness of their offerings developed over the course of many releases, and their deep reference base that could speak to the ability of these solutions to meet almost any size and type of company's needs. The other vendors usually won deals based on price, ease of use, or specialized functionality. Things are beginning to change however. As  the big vendors start to introduce hosted or true multi-tenant cloud versions of their performance management solutions they lose their two main advantages: deep feature sets and a large reference base. Their cloud-based products are version 1.0 with reduced functionality compared to their older products, and few live users. As more and more companies look for cloud-based performance management solutions it is the existing cloud-based performance management vendors that have the upper hand. They have several years of product releases under their belts, hundreds, and in some cases thousands of live references, all coupled with their competitive pricing and ease of use.

 

Vendors leading this trend: Adaptive Insights, Anaplan, Host Analytics,  Tidemark, and XLerant are all true multi-tenant cloud performance management solutions that have gone through several product versions and have a sizeable and happy base of references with live systems.

 

I view all of these trends as positive for end users, as well as the majority of vendors. It looks like 2015 has the potential to be another great year for performance management.

 


Posted December 15, 2014 12:58 PM
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Longview Solutions, one of our 'core performance management vendors for 2014', has been acquired by Marlin Equity Partners.  Their previous parent, Exact Holding, had purchased them in 2007 and let them run fairly independently. However, as often happens with acquisitions anticipated synergies never materialized and strategies changed. Exact ended up placing Longview into a Specialized Solutions group with other non-core businesses and essentially started looking for a buyer. During this period of time there were constraints around business changes Longview could make and limited funds available to invest in new opportunities. With their acquisition last week by Marlin, all that has changed. Marlin Equity sees Longview as a platform for growth in the performance management space and plans to invest in organic growth as well as strategic acquisitions.

We view this a net positive for Longview and its customers. For quite some time now Longview has been doing fairly well in spite of  its position within Exact.  With Marlin at the helm we expect to see much more activity and a more aggressive Longview Solutions.  This should also lead to an expanded product portfolio. Let's not forget though that the  likely goal of Marlin, like most private equity firms, is to invest in and grow the business so they can ultimately sell it or take it public. This is certainly several years down the road,  but something for prospective purchasers to be aware of.


Posted July 7, 2014 12:02 PM
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We just announced our annual list of core vendors for performance management. While dozens of vendors lay claim to the space, this list identifies the real players that are winning deals, and more importantly, being successfully implemented. In addition, we also name our 'Best New Vendor(s) of the Year' and 'One to Watch'. These are up and comers that will most likely show up in the core list a year or two down the road.

Core Vendors for 2014: Adaptive Insights, Axiom EPM, Centage, Host Analytics, IBM Cognos, Longview, Oracle, Prophix, SAP, Tagetik, Tidemark, Vena Solutions

Best New Vendors: deFacto Global, Decisyon

One to Watch: OneStream Software

To see what each vendor offers along with their customer satisfaction ratings, you can watch the replay of the webcast where we announced these lists: The Pulse of Performance Management 2014.

In addition, we also share the results of our annual BPM Pulse survey that looks at the intersection of performance management and technology. This year we included research on use of mobile, cloud, big data, collaboration, and predictive analytics with performance management solutions.

 


Posted June 2, 2014 7:34 AM
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Another acquisition in the performance management space, but this one  doesn't lead to consolidation. Kaufman Hall, a management consulting company focused primarily on financial performance management in healthcare organizations, has acquired Axiom EPM, a leading performance management software provider. We think overall this a net positive for Axiom EPM, its customers, employees, and performance management prospects.

Pros:

- Bigger company

- Deeper financial backing

- Synergies with performance management consulting practice

- Clear leader in healthcare

POTENTIAL Cons:

- Loss of key talent: some founders will be leaving, but most of the current management team will remain in place.

- Loss of focus on non-healthcare business: management assures us this is definitely not the case. As a matter of fact, they believe things will go the other way - this acquisition will enable  Kaufman Hall  to expand its focus beyond  healthcare.

As with all acquisitions, only time will tell how it all works out. Based on what we know today our advice:

- For current  Axiom customers: sit tight, with Axiom EPM's reputation for outstanding customer satisfaction we don't think they are going to change now and start neglecting their customers. In addition, unlike many other performance management acquisitions, the purchaser (Kaufman Hall) does not own any similar software that they would want to migrate Axiom customers to. So, we expect that the product will continue to be supported and enhanced.

- For Axiom prospects: proceed with your evaluation. The company is now bigger and stronger than in the past, with the same software, and most of the same team. While we  believe this makes Axiom a stronger option for all companies, the biggest upside right now is clearly for healthcare organizations who should move Axiom to the top of their list of vendors to consider.

Axiom EPM will become a wholly owned subsidiary and be known as Axiom EPM, a Kaufman Hall company.

 


Posted April 23, 2014 6:56 AM
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Based on our consulting work with clients and vendors  in 2013, as well as the results of the most recent BPM Pulse survey, we believe the following are the most likely next steps for performance management in 2014.

#1: Cloud becomes the dominant solution approach for Performance Management

This is a logical extension of what we are seeing today. The number of companies saying no to cloud are few and far between. Many companies, particularly in the midmarket where they are resource constrained, have a preference for cloud. The rest are indifferent. In those cases cloud often wins simply based on cost as opposed to the technology itself. The main hold outs still appear to be the largest companies. While security is still an issue (more perception than reality) for some, it is really the need for robust functionality that until recently was lacking in the cloud-based solutions. That issue is going away as the cloud vendors have been aggressively working to close the features/functions gap. The on premise vendors are also working hard to cloud enable their solutions. The end result is that finding a cloud based solution that meets the needs of the largest companies will become a non-issue over time.

#2: Mobile becomes an important differentiator

In our work today we are seeing a mobile access capability as a 'must have' for a handful of companies. It is usually a senior executive that wants/needs access to the latest reports on his tablet. In those situations mobile capability becomes a hard and fast requirement and vendors without it are excluded. For most though, mobile is still a nice to have capability. The focus is also still heavily on consumption of data, not creation. All other things being equal, offering a mobile capability is a way to stand out from the pack.

#3: Vertical solutions will be included in more evaluations

We say this every year and each year we are closer to being right. Customers always want a product and vendor that speak their language and understand their business. The benefits are many - reduced learning curve, industry-specific functionality, reduced customization required/reduced consulting cost. This past year we have seen this more than ever. Companies that were looking for and/or selecting industry-focused solutions came from manufacturing, retail, insurance, healthcare, utilities, and banking. Prospects are also willing to overlook quite a bit if the vendor focuses on their industry. They will look at smaller vendors they never would have otherwise considered. In addition, they will accept less than state of the art solutions (i.e. out dated user interface, older technologies, etc.). Holding back this trend has been the limited availability of solutions for a wider range of industries. We are now seeing vendors that have had success in one or two industries branching out to new sectors. In addition, some of the more established vertically focused vendors are updating their products to make them more competitive.

#4: Growth of packaged operational analytics

Operational analytics is a major area of potential growth for performance management. Once you have tackled corporate budgeting, consolidation, and reporting, the next step is to bring the pillars of performance management: strategize, plan, measure, act to each area of the business. This enables tighter management of the core business functions, and also results in a more holistic view of the entire business and cross-departmental impacts. The challenge has been that for many years you had to build these solutions yourself from business intelligence toolsets. We have seen significant growth recently in packaged analytics applications for one area in particular - sales performance management. This is also the area most in demand from prospects so it makes sense. There are now a wide range of solutions available that focus on revenue recognition,  incentive compensation management,  forecast accuracy or some combination. We expect this segment of the market to grow and perhaps branch out to other areas of the business beyond Sales.

#5: Predictive analytics will continue to slowly gain steam

We know that predictive capabilities could add tremendous value to performance management solutions, but it still seems a little early in terms of acceptance. The prospects are still a little confused as to how it works and what the value is, while the vendors themselves offer an inconsistent range of functionality under the predictive analytics banner. The result is a missed opportunity for all. It is a sophisticated and powerful tool that involves complex mathematical algorithms which is part of the reason it is not well understood by the average prospect. Predictive analytics can lead to more accurate forecasts, or at least a better and more realistic understanding of the probability of a forecast coming to pass. What is needed is some degree of standardization - a consistent definition of what is included in this module or feature, regardless of vendor. In addition there needs to be clear messaging and education as to how it is used and what the real benefits are. This is exactly the situation that performance management itself was in about 10 years ago until a group of us (consultants/vendors/analysts) came together to address this challenge. The results were dramatic and led to the successful and mainstream performance management market we have today. This area could use the same kind of focused attention to increase the rate of adoption.

#6: Big Data will not have a major impact on Performance Management

You can't read an IT article or blog without some mention of Big Data and related analytics. There's no question that this is an important area that can provide real value to most companies. The question is, how does this relate to performance management? Most data tracked by performance management systems is financial in nature. There may be a lot of numbers but this data does not usually fit the definition of 'Big Data' - a tremendous volume of semi-structured and unstructured data from inside and outside the company that is too large for traditional databases and analysis tools. There is a role for Big Data to play though: as a leading indicator. For example analyzing social media data may indicate customer dissatisfaction that can translate into fewer renewals or reduced new sales. How this analysis makes its way into the performance management system can vary. For most, this analysis will take place in a separate system designed to handle this type of data. This will then become another source system, much like ERP or CRM systems,  for the performance management system. Alternatively some performance management vendors, particularly the newer  cloud-based vendors, can provide built-in Big Data analytics capabilities.

#7: There will begin to be a focus on execution

At this point in time most performance management solutions do a solid job of measuring performance. They allow you to define strategic objectives, put together a long-range plan to achieve those objectives, and create detailed budgets and forecasts to measure progress against.  As actual data comes in from source systems the performance management systems tracks performance and highlights significant variances. Taking action to address those variances usually takes place outside of the performance management system. There are two reasons for this. First of all, more detailed operational data is usually required to determine the appropriate course of action, and that data is contained in other systems. Secondly, other than sharing a common view of the results it is still cumbersome to have a group of people discuss what action to take from within the performance management system. As we monitor the vendor landscape we are seeing newer solutions that attempt to tackle both of these areas. These new solutions include more detailed monitoring of operational activities (down to the plant floor level), as well as tools to facilitate collaborative decision making. As these solutions mature they should be able to address the last big missing piece of performance management, and possibly the most important, helping a company successfully execute on  its strategy.


Posted January 7, 2014 10:51 AM
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