A new player has arrived on the performance management scene and they have the potential to make a big impact. Tidemark, formerly Proferi, came out of stealth mode just this week. To understand their technology approach to performance management you just need to look at some of their partners: Terremark for cloud infrastructure, Cloudera's Hadoop distribution, VMware vCloud, and SnapLogic middleware for integration. While this is clearly a step ahead of the current performance management pack, Tidemark's technology is not the main reason I expect them to be successful: It's the team. The investors, board, management, and employees consist of senior executives from Hyperion, OutlookSoft, PeopleSoft, Oracle, and SAP. Saying they have a great understanding of enterprise applications and performance management would be an understatement. I have personally worked with several members of the team in the past and was quite impressed with not only their expertise, but their laser sharp focus on the customer. Their depth of understanding of the space is evident in the areas of performance management they elected to tackle first: Strategic, operational, and financial planning/budgeting/forecasting, Metrics management and management reporting, and Profitability modeling. According to our 2011 BPM Pulse survey results these are exactly the areas that many companies still need to address. Well, perhaps they'll find their solution in Tidemark.

 

When companies start to focus on operational analytics the first area they typically look at is sales. The reason is obvious - optimizing the performance of this area of the business can provide a quick, and sizeable, payback. To accomplish this most organizations have had to utilize custom built solutions or one of the few (and very basic) packaged applications offered by the incentive compensation management vendors. An established and successful performance management vendor, Adaptive Planning, is about to change all of that. With their Spring 2011 release they are introducing their version of a sales performance management application. It is a robust SaaS solution, tied to their core financial planning and reporting solution. If that isn't enough to make it unique it also has an optional direct link to Salesforce.com to pull in the underlying transactional data required for analysis. As an aside, Adaptive now has over 900 customers and the highest performance management customer satisfaction rating as determined by both Gartner and BPM Partners. We believe their new sales planning and analysis solution has the potential to be a game changer.  

In our daily interactions with companies that are considering business performance management (BPM) and business intelligence (BI) initiatives we are finding that those projects are generally not moving forward right now. They are taking a back seat to more pressing, but mundane, operational and back office system requirements. Performance management and BI are often seen as enabling easier access to better  information, or specifically in the case of BPM, fixing a painful process such as budgeting. When there are enough resources to go around these projects are generally given the go ahead since they are seen as valuable. However, when resources are tight and there are critical operational projects that must be done, such as  a new order entry system or basic transactional  accounting system for example, then BI and BPM get moved to the back burner. Senior management becomes less concerned about fixing a process that is only painful to those below, and the value of better information access is difficult to quantify.

So, how do these projects get attention in this environment? As I'm sure you've observed in your own company projects that are closest to having a measurable impact on the bottom line are of more interest to senior management.  The question then is how do we tie Bi and BPM to the bottom line? The easy answer is profitability optimization. This is a focus well-suited to these disciplines as it is a data intensive task that requires complex analysis. It is an area that is also an acknowledged priority for many organizations. Whether a company is large or small, having a good year or a bad one, they all could benefit from improved profitability. The 2011 BPM Pulse survey found that it was the number two priority for organizations pursuing performance projects, just behind enhanced reporting. Unlike enhanced reporting though, profitability improvement can directly impact the bottom line and is more likely to get the green light right now.

What are the challenges? For one, many organizations think they have this nailed already. They believe they understand the true profitability of their products, territories, and customers. The reality though is  that they don't. Secondly, this is much more than a technology project. It requires significant business and financial expertise to pull off. So how best to address these challenges? Work with a vendor and/or consultant who is expert in this area. Many large management consulting firms will have a practice built around profitability improvement.  Several performance management and BI vendors include profitability analysis and optimization as part of the many things they offer. One of the core vendors we identified for 2011 is solely focused on this area - Acorn Systems. Acorn's expertise is recognized by other vendors  and consultants as well since they bundle Acorn into their own offerings. The choice in how to proceed here is yours. To not include profitability optimization, or something equally as compelling to senior management, as part of your BI/BPM initiative at all is probably going to relegate it to the back burner for the time being.

Every year we publish a list of core vendors in the space to help customers cut through the noise and focus on just those vendors that are most likely to be of value to them. We define a core vendor to be an active and successful vendor of robust performance management solutions with a broad appeal. These vendors tend to be application-focused but several offer a strong business intelligence capability as well. We have just revealed this year's list and the vendors are: Acorn Systems, Adaptive Planning, Host Analytics, IBM/Cognos, Infor,  Longview, Oracle/Hyperion, Prophix, SAP, Tagetik. Not every vendor in this list is right for everyone, but it is a good starting point to create your own short list of vendors to evaluate. During the webcast where this list was unveiled we also identified who each of these vendors are best-suited for as well as their BPM Pulse customer satisfaction ratings. You might be surprised when you see which of these vendors had the highest satisfcation ratings. While the lowest rated vendor may not be as surprising it is noteworthy that their rating fell out of our satisfaction gauge's green zone and dipped in to the yellow. You can see and hear all of the details yourself by viewing this on demand webcast.

Achieving the 'Holy Grail' of performance management will be a focus of ours going into 2011. What does this actually mean? In the case of performance management we believe it has two distinct meanings. First and foremost it means the same thing it would mean for most other projects - actually receiving the expected benefits after making a significant investment in time and resources. In the performance management world these benefits should include strategic alignment, one version of the truth, better decision making, improved bottom line and the more mundane but critical error reduction, easier access to information, and shorter cycle times. In addition to that, we believe there is a 'Holy Grail' aspect that is unique: the integration of strategic, financial, and operational performance management. Most organizations are just beginning to scratch the surface in this area.

To help organizations achieve the Holy Grail of Performance Management we have written a whitepaper, are in the process of conducting a survey, and will share early results of the survey in an upcoming webcast. Right now you can help us by taking the Pulse 2011 survey which will get you a copy of the results that you can use to benchmark your own project. In addition, all respondents can download a free copy of our Vendor Landscape Matrix, a 23-page research report that normally sells for $395.