They all claim that they have very happy customers, but only one can have the happiest. Our annual BPM Pulse survey has wrapped up and the related customer satisfaction ratings are always eagerly anticipated. We will be revealing the results of the survey tomorrow during a live webcast (don't worry if you are viewing this after April 26th, a replay should be available at that same link address). In addition we will name our selection for Best New Vendor of the Year, as well as identify the core list of vendors that we believe everyone should use as a starting point for finding their ideal performance management solution. Lots of  other information will be covered including updates on the latest vendor releases, and market feedback on topics such as the willingness of finance departments to utilize cloud-based solutions for performance management.

IBM announced today an agreement to acquire Varicent Software, a leader in Sales Performance Management. We were one of the first to recognize Varicent and its important role in expanding the operational analytics capabilities of performance management.They took incentive compensation management, and elevated it to a new level of importance and value in the organization by embracing the core concepts of performance management: strategic focus, planning, monitoring, and analyzing. More and more of our clients today are seeking to expand their performance management systems beyond finance, and sales is often  the first area they target. We view this acquisition as very positive for IBM. This is a growing area of focus, and not just for the big guys. Just last year Adaptive Planning introduced its own sales performance management offering targeted at midmarket companies. We look forward to more vendors providing their own pre-packaged capabilities in this area.

Is there a relationship? Should there be? I have a strong opinion on the subject (as I usually do), and the performance management vendors have their own opinions as well. Right now though we are seeking market feedback on this topic in addition to questions around the adoption of the cloud as a platform  for performance management applications, and the market's perception of the meaning of the over used term 'collaboration'. The BPM Pulse 2012 focuses on these topics and more. The survey has been open since January and will close at the end of March. If you take the survey you will receive a full results report in April along with a gift card to thank you for your time. To learn more or take the survey: BPM Pulse 2012. Once the survey is closed I will weigh in with my opinion on this topic and share what I have heard from the vendors as well.

Within the past week two very different performance management vendors have received millions of dollars of outside investment. I say very different because one is generating excitement due to its application of the latest technology,  and the other is getting attention because of its new approach to solving a long standing business challenge. The companies are Tidemark and XLerant. You can read what we have recently written about each of them here and here. They are both good companies with a solid vision and very experienced teams. Venture capital guys tend to like to get in on the next big thing. Performance management is an established big thing so why the investments now? For one, they must expect continued growth. In addition, each of these companies does have a 'next big thing' element. Tidemark is wedding the proven principles of performance management to the next generation of technology. They are still relatively early stage, but the potential is huge. In the case of XLerant they are approaching the  crowded, but still in high demand, budgeting solutions area from a new angle. There certainly is  room for both of these companies to succeed. These investments also bode well for the established performance management vendors as it is just one more validation that performance management is an important and growing area. In particular Adaptive Planning and Host Analytics, pioneers in bringing the latest technology to performance management, should see interest in their solutions increase as the investment and related coverage of Tidemark may help more companies recognize the value of this approach.

 

XLerant received 3 million, and Tidemark 24 million.

According to a recent study by Merrill Research, performance management usage may grow as much as 77% over the next two years. In a related note, they found that about 39% of respondents had a system in place today, and 31% of them were already looking at replacements. All of  this indicates a significant opportunity for the performance management vendors. It is also an opportunity for buyers to make bad decisions based on misleading information. When an area is perceived as hot, everyone jumps on the bandwagon. Just look at all the consultants, analysts and vendors from the business intelligence world who have recently added performance management or one of its' acronyms (BPM, CPM, or EPM) to their marketing messages. Unfortunately, most of them have a very limited (and I believe inaccurate) view of what performance management truly is. Buyers need to educate themselves before proceeding with this mission-critical purchasing decision. A good starting point is the BPM Industry Framework developed by a group of vendors and analysts in 2005. It is a little out of date in that performance management is somewhat broader today, but it is light years ahead of the inaccurate descriptions provided by the newly-minted 'experts'.