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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!

Recently in Top Trends Category

Last year was a good one for performance management.  Vendors continued to add customer-focused enhancements, they acquired or partnered their way to broader suites, new vendors appeared with surprisingly well developed offerings, and the pace of end user adoption accelerated. Where do we go from here? Hopefully we'll see more of the same plus some growth in specific functional areas and utilization of the latest technologies. Here are my 5 predictions for performance management in 2013.

1) Focus on Forecasting

While almost every vendor that offers budgeting also offers forecasting capabilities, it is clearly not their focus. In fact it is more of an afterthought. More and more users though are looking for solutions optimized for forecasting. This means specific functionality, such as predictive analytics, as well as not having to be burdened by the overhead of menus, options, and functions better suited for budgeting. In our 2012 BPM Pulse Spotlight survey on budgeting, planning, and forecasting the most requested product capability was support for continuous forecasting. While most organizations are not actually there yet, it is clearly a direction they expect to be moving in. What really brought this home for me was a conversation I had late last year with a large telecommunications company. They informed me that they had abandoned their budgeting process four years ago because it couldn't possibly keep up with their market realities. Now all they do is forecast at a fairly summary level. They had looked at the usual performance management vendors and were struggling to find one that had a strong forecasting focus. We pointed them to two smaller vendors that might meet their needs, but the fact remains that there is room for improvement in the forecasting solutions offered by the mainstream vendors.

What we expect to see in 2013: vendors will start to flesh out their capabilities in this area and perhaps even begin to package and price this functionality separately as opposed to just bundling it in with budgeting.

2) Increased Importance of Financial Consolidation

While budgeting and performance dashboards have been at the top of most organizations must-have performance management lists for year, financial consolidation has been near the bottom. Last year many projects, even those ostensibly focused on budgeting, added some consolidation functionality to their requirements. In some cases it was driven by the need for intercompany matching and eliminations, in others it related to currency conversion and partial ownership, and for some it involved the ability to make journal entries in their performance management system. For the vendors the opportunity is large for two reasons - not having basic capabilities can cause them to be eliminated even if it is not the focus, and financial consolidation led deals tend to be larger than budgeting deals. The largest multi-million dollar project we worked on last year was primarily focused on consolidation.

 What we expect to see in 2013: at least one leading performance management vendor will introduce their first financial consolidation module, while other vendors will continue to enhance their existing capabilities in this area.

3) Expansion of Cloud-based Performance Management

Performance management has been a bit of a laggard in the acceptance of cloud-based solutions. The primary reason has been perceived security issues and the nature of the data stored in these systems. Of course any company that has been passing around spreadsheets loaded with confidential data has much bigger security issues than any hosted solution could ever have. In fact, unlike many systems and processes in use today by these companies, the leading cloud-based performance management solutions meet very stringent security standards. However, what is beginning to really turn the tide is the reality of overwhelmed IT departments. We have seen numerous organizations move to cloud-based performance management in the past year primarily because their IT groups told them they would have to get in line and wait for IT support for any new systems. The next issue to arise is that there is general confusion in the end user community when comparing true cloud-based solutions and single-tenant hosted versions of on premise solutions. In the end though, most organizations looking for cloud-based solutions have been purchasing products built from the ground up for that environment.

What we expect to see in 2013: the cloud-based vendors will see continued growth in demand, and several on-premise vendors will begin to develop their hosted offerings to more effectively compete with full cloud solutions. While we don't expect any short-term re-architecting for the cloud, we do see pricing, marketing, and branding that will enable them to be taken more seriously.

4) New Choices

Several years ago there were a sizeable number of independent performance management vendors to choose from. Then came the great wave of acquisitions and we were left with a handful of mega vendors and a much smaller number of performance management focused application vendors. I personally thought it was going to stay that way because the barriers to entry seemed so high (how could a new vendor compete with the marketing clout of the big guys and the established track records of the remaining independent players). Apparently, I was wrong. Several impressive new performance management vendors have emerged  in the past year or two. They are run by management teams made up of people that came from many of those companies that got acquired several years ago, so they clearly know what they are doing. Some solutions are simply incremental improvements upon what has come before, while others are truly innovative. Either way, more choice is always a good thing for end users. It also helps to keep the other vendors on their toes and constantly moving forward.

What expect to see in 2013: more new vendors! The year is young and we have already met with two vendors new to the performance management market. They continue the pattern of having seasoned management teams with deep experience in the space. One is somewhat innovative, the other is a new and improved version of a unified performance management solution. Both should be solid options for organizations looking for solutions this year. We will share more details as we spend more time with these vendors.

5) More Due Diligence

While performance management is no longer the Wild West of its early days when unsubstantiated marketing claims were flying all over the place and buyers had limited relevant knowledge and experience, it is still a challenge to get it right. By getting it right I mean: getting the best solution, at the best price, in a timely manner, with end user buy-in and a successful roll-out. While there are still many organizations that go off on their own, do some web research, and buy a product based on a canned demo, there are many more that are doing it the right way. They put together a team of internal stakeholders, prepare a long-range roadmap, gather detailed requirements, look at multiple vendors that could potentially fit, put them through scripted in-depth custom evaluations, score them against their ability to met the prioritized and weighted requirements list, and aggressively negotiate the price with the finalists. Since BPM Partners provides tools and expertise to guide companies through this process we get to see this first-hand. In 2012 we worked with more organizations than in any year in our history.

What we expect to see in 2013: the continuation of this trend. There are a number of reasons for this, one of which is the abundance of viable options to evaluate and choose from. Another is the fact that companies that have waited until now to move forward with performance management tend to be more risk-averse. In addition, list prices are higher than ever and finding a more cost-effective solution or knowing where and how far to push in price negotiation is critical.

Those are our thoughts. Now share yours: take the BPM Pulse 2013.


Posted January 28, 2013 2:38 PM
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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.


Posted January 25, 2012 6:06 AM
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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'. 

Posted December 2, 2011 7:27 AM
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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.


Posted December 13, 2010 12:23 PM
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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.

I say all this because we are trying to help one of our clients find the best BPM solution for their needs. We are aware of a newer product that may be a fit. However, that vendor, even with a non-disclosure agreement in place, is unwilling to share even the most basic information. We are not talking about divulging the 'secret sauce,' just what the product does and doesn't do, and at what cost. I remember two other BPM software companies that had similarly secretive senior executive management teams. Neither one of those really took off until those executives were pushed aside. In one of those cases a vendor who had a better product lost three years of  market momentum to a competitor who now dominates their niche.

On the client side, we were trying to have a conversation with a new prospective purchaser of our services. We didn't know yet what they needed and if they would actually engage us. Just to have that initial conversation required us to sign a fairly one-sided and onerous non-disclosure document. We are not talking about seeing any of their data or learning details about their operations. Just a conversation where they can say 'we need to improve our reporting' or 'we need a new budgeting system'. Is any of that information the kind of thing that can sink their stock price if it got out or cause customers to run away? Of course not. The agreement they wanted us to sign though will allow them to visit our site on short notice to examine our security procedures, allow them to sue us for all we are worth if anything they say to us gets out and they suspect it came from us, and lives on for years and years even after our conversation is ancient history. These are reasonable risks for us to take if we are engaged in a sizeable project with them, but not to have the conversation to determine if it even makes sense for us to work together. In the end we did sign the agreement and were allowed to speak with them. We discovered fairly quickly that what they were looking for is not a good fit for us and we walked away. I wish we could have done that without having to incur the cost of our lawyers reviewing their extensive confidentiality agreement first.

Excessive confidentiality can limit the free flow of necessary information. I think in the case of these vendors and prospects they are hurting themselves by being overly protective. The vendors will not achieve the market awareness they need. The prospects will find fewer and fewer consultants willing to take the legal risks or incur the legal review costs just to see if there is a need for their services. I hope these recent incidents don't become the norm.


Posted May 14, 2010 10:13 AM
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