Recently in Top Trends Category

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'. 

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.

I've noticed a disturbing trend recently while dealing with both BPM vendors and prospective purchasers. While individuals are sharing more and more of their personal information (sometimes inadvertently), these guys are sharing less. Of course there is a time and place for confidentiality, such as when you are revealing information that has not yet been made public, or if you are giving someone access to your data (or your customer's data). However, if you are a  vendor who has a commercially released product and customers does it really make sense to hide your pricing and feature capabilities from the analyst community? Of course not. Vendors operate in 'stealth mode' when they are developing new product that they want to surprise the world with upon its release. It keeps the competitors in the dark until the last moment. When that product is released though you need as many people as possible to be informed about it to talk it up and  help promote it. Once you have customers, basic information about the product and pricing is going to get out anyway, you might as well take ownership of the conversation. Yes competitors will get an idea of what you have been up to as well. If keeping your capabilities secret is the only barrier preventing competitors from catching up to you then you don't really have much of a unique product advantage to begin with.

In the 2010 BPM Pulse Survey we asked a number of questions to determine where business performance management (BPM) fell on the priority list at most organizations. While the survey is still ongoing, with more than 500 responses already in we can take a meaningful initial read on this topic. One question asked if respondents thought BPM was essential, nice to have, or a luxury. Almost 60% responded that is was essential (only 5% called it a luxury for those with resources to spare). Another more telling question required the ranking of 7 different enterprise systems in terms of their importance to the organization. While ERP came out on top, BPM was right behind. It was ahead of customer relationship management, business intelligence, governance, risk, and compliance, business process management (the other BPM), and HR systems. This survey will remain open through the end of this month. If you would like to add your two cents and get a copy of the survey results report when available go here.