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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!

December 2005 Archives

We recently came across a BPM vendor with a fairly unusual go to market plan. I can't tell you their name because that is the crux of their strategy - secrecy. Basically they believe they have a very unique offering and want to keep it a secret from competitors, analysts, consultants, and other third parties. Prospective customers must sign a confidentiality agreement. The thinking goes that once this special functionality becomes public the competition will try to copy it. We became aware of them while helping one of our clients find their ideal mid-market BPM solution. Their name was on the client's list of vendors to look at. So, as part of our normal procedures we contacted the vendor and asked them to come in and do a custom demo. Their sales rep informed us they could not do that with us in the room. Our client insisted we be present to help them evaluate the product. The vendor declined to participate and walked away from the potential business. I couldn't believe this so I contacted the CEO.

He went on to explain their secrecy strategy to me. Having been in senior roles at two BPM software companies myself I realized this strategy is inherently flawed. First of all, someone will eventually leak the information about their 'secret sauce'. If it is easily duplicated then they really don't have any significant market advantage. The fact that they are trying so hard to keep it a secret tells me they must believe that it is fairly easy to copy. Secondly, I'll bet that whatever it is it's not that unique after all. In the BPM world vendor after vendor thinks they have some special unique functionality that differentiates them from the pack (and most vendors shout this from the roof tops, not hide it), but it often turns out not to be the case. Lastly, there is a battle for market share going on in the BPM space right now. If they are not working with consultants and analysts they will not get their fair share of attention and will ultimately lose market share to more open and aggressive competitors. Am I missing something? Do you think this is a viable strategy?

Posted December 22, 2005 8:35 AM
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When you purchase software, who do you get to assist with the implementation? The vendor? A third-party? The choices available to you are fairly well controlled by the vendor. If they don't have many partners, you have little choice but to use their own consultants. If they have lots of partners the vendor salesperson will probably steer you to a preferred partner in your area. There are benefits to the vendor and the customer in each approach. In the BPM world today we are seeing the beginning of a shift away from the reliance on partners approach which has dominated the space for the past few years

Typically when a vendor is just starting out they do their own implementation consulting. There are several reasons for this, not the least of which is that until they build a market for their products few consulting firms would be interested in making the investment required to hire and train staff to implement those products. In addition, with those first few references being so critical the vendor wants to make sure they build a direct relationship with their initial clients and ensure a successful implementation. This model usually works and produces some initial stellar references. However, it is not very scalable. In addition, Wall St. or VCs pressure the firm to focus on the 'higher margin' product business and leave the consulting to others. At this point most firms look to sign on as many partners as they can find. That is the stage many BPM vendors have been in for quite some time. However, we are now seeing the pendulum swing back. A number of the firms are once again staffing up their in-house professional services groups. Vendor sales people are recommending their own staff over partners for implementation. Why is this happening? Quality and dollars. As can be expected when you bring on dozens, if not hundreds of partners - some will not be very good. When an implementation goes awry, its usually the reputation of the product and the vendor that suffers most. In addition, those same VCs and Wall St. types that were earlier pushing for margins are now looking for top line revenue growth. There is only so far you can push the product license business in a competitive market like BPM, so with at least one service dollar spent on average for every software dollar, it is a logical place for the vendor to look for revenue growth. What does it mean for customers? When the vendor does the implementation work, since they know their product best and have a strong vested interest in its success, you can usually count on a good outcome. When there are lots of partners you increase the likelihood of finding someone local and maybe someone that understands your industry. In addition, the competitive consulting market will create more competitive pricing. The ideal is the mid-point - the local partner does the bulk of the work at a fair price while the vendor is involved to quality ensure the implementation. Unfortunately, for most vendors that point usually exists for only a short time as the pendulum swings from one extreme to the other and back again.

Posted December 19, 2005 6:48 AM
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