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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!

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.

Posted March 3, 2011 10:16 AM
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