Blog: Craig Schiff

Investment Dollars Flowing into Performance Management

Wed, 25 Jan 2012 06:06:29 -0700

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.

Performance Management Poised for Growth

Fri, 02 Dec 2011 07:27:39 -0700

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'.

Performance Management + Cloud + Big Data = Tidemark

Fri, 21 Oct 2011 09:18:29 -0700

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.

New Player in the Sales Performance Management Space

Thu, 07 Apr 2011 09:11:08 -0700

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.

How to Improve the Odds of Your Performance Management/BI Project Becoming a Top Priority

Thu, 03 Mar 2011 10:16:49 -0700

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.

Core Performance Management Vendors for 2011

Mon, 21 Feb 2011 09:06:08 -0700

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.

The Holy Grail of Performance Management

Mon, 13 Dec 2010 12:23:10 -0700

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.

IBM Acquires Clarity Systems

Fri, 22 Oct 2010 10:41:44 -0700

I have to admit this was sort of a surprise. I understand and am happy to see that IBM has been making a big push into business analytics. However they already own products that can do most of what Clarity 7 does. There is always some level of overlap with these kind of acquisitions, but in this case it appears to be huge. Clarity is primarily a performance management application vendor. Well, IBM's earlier Cognos acquisition covers much the same ground (and then some). The IBM Cognos sales force already has its hands full trying to decide which product to roll out when someone wants to do budgeting for example. Do they lead with Cognos Planning or TM1 and/or partner applications in this area? What they don't need to add to the mix is another budgeting and planning solution such as Clarity's.

So, why the purchase then? FSR. Financial statement reporting. This Clarity solution is focused on financial governance and the facilitation of external reporting. We believe this has been where most of Clarity's sales and growth have come from, at least in the past year. It is certainly a hot area in performance management and it makes sense for IBM to want in. Other vendors are also jumping on this bandwagon such as Longview with their FXR offering.

My view of all this is that it is a good acquisition for IBM (especially if the price they paid reflected that FSR was really the only valuable piece of the product set for them) and will strengthen their expanding business analytics offerings. I also believe that it doesn't make sense to continue to actively market and develop the competing Clarity 7 performance management applications.

What does this mean for IBM Cognos customers? The ability to incorporate FSR into their performance management solutions. For current Clarity customers the picture is a little different. While I am sure Clarity 7 will be 'supported' for some time to come, it will be frozen in time. In an area of rapid evolution and change such as performance management you cannot stay competitive with your peers if you are utilizing an essentially dead product. As the definition of performance management continues to expand and vendors add new capabilities you do not want to be left behind. These customers must begin planning a migration to an alternative solution from IBM or another vendor much like customers of INEA, SRC, Cartesis and several other acquired and discontinued products have had to do. They should do this before they make significant additional investments in software, training, or implementation. It's always better to invest in the future as opposed to the past.

Vendor Struggles

Mon, 19 Jul 2010 12:52:40 -0700

As the performance management space continues to pick up steam (both in terms of new customers and new vendors), some established vendors seem to be struggling a bit. One of the larger vendors appears to have a serious disconnect between its marketing group and its sales team. The marketing people see this vendor as a premiere provider of packaged application solutions for the business performance management market. This isn't just hype, they have a solid product set to back up this claim. It's also good news because this is exactly what the market wants, especially if finance is leading the charge. The problem is that sales and especially pre-sales are presenting a different face to prospects. Their demo typically starts and ends with a blank Excel screen and a pitch that claims you can make the product do whatever you want. For the most part they do not show the pre-built applications. At this point in time very few people are looking for a set of tools to build a performance management solution from the ground-up. The sales presentation though is leaving prospects with the impression that is in fact what this vendor is offering, when that is not really the case. We have observed this situation first-hand in the field and have seen the vendor lose deals because of it.

Why So Secretive?

Fri, 14 May 2010 10:13:54 -0700

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.

New BPM Vendors on the Way

Thu, 25 Mar 2010 12:41:03 -0700

For a while now there has been a fairly consistent set of business performance management (BPM) vendors showing up in deals. These include the big names of course as well as a group of smaller, but still very successful, BPM-focused vendors. You can see who I am talking about here. In the past month or two though we have become aware of several new vendors gearing up for their launch into this market. A few of these vendors have actually been around for a while, but have flown under the radar as they focused on a small market segment. Having honed their skills and created product success stories in a particular market niche they are now ready to broadly enter the BPM marketplace. In addition there are at least two brand-new vendors in, or just coming out of, stealth mode. These vendors were founded by senior BPM experts who were freed up by the major acquisitions of a few years back. They've spent their down time working on product and now that their non-competes have expired they can launch as soon as they are ready. A few of these vendors we have talked with clearly have the potential to become solid players in the space. More choice and more competition is always good news for BPM buyers. In the next few months I will provide more details on some of these vendors as they launch themselves into this market.

The Importance of Performance Management

Wed, 03 Feb 2010 15:06:03 -0700

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.

The 12 Core Performance Management Vendors for 2010

Tue, 26 Jan 2010 08:30:59 -0700

Every January we unveil our list of the 'core' business performance management (BPM) vendors for the year. Out of the 100+ vendors we follow in the space, we select the subset that we deem to be the most successful (in terms of client success, not just sales success) and that have the widest appeal. It is our belief that prospective clients would do well to include these vendors on their shortlists, assuming of course that they fit in with their overall business requirements. For 2010 the BPM Partners list of core vendors includes (in alphabetical order): Acorn, Adaptive Planning, Carpio, IBM Cognos, Infor, Longview, myDials, Prophix, Oracle, SAP/BusinessObjects, SAS, and Tagetik. We officially unveiled this list last week in our annual Beyond the Hype webcast. You can replay it now to see the detailed information on each vendor along with customer satisfaction data (where available), and 'best fit' analysis for each.

BI/BPM Can Produce Significant Returns

Mon, 23 Nov 2009 12:03:34 -0700

Those of us who work with business intelligence (BI) and business performance management (BPM) on a daily basis strongly believe that they provide great value to the companies that implement them. The challenge always is how to measure the bottom line impact of the benefits produced. How do you quantify the value of better access to information and enhanced decision-making capabilities? I don't really know the answer, but the guys at Nucleus Research make a living doing just that - calculating the return on investment (ROI) of technology projects. I found their recent case study on one of BPM Partners clients, Martin's Point Health Care, of particular interest because of the large ROI and fast payback they uncovered in this BI/BPM project. Hopefully this analysis and others like it can help convince some of the many companies putting other priorities ahead of BI/BPM to move these projects up the list.

SAP + Microsoft Take Aim at Oracle

Wed, 18 Nov 2009 13:07:53 -0700

Sure they have a common enemy in Oracle and have targeted them before, but this recent announcement is around business performance management (BPM). More specifically budgeting, planning and consolidation. That would mean the Oracle/Hyperion product set and the product set that SAP/BusinessObjects acquired with OutlookSoft. Both companies have very strong offerings in this area. Microsoft had a solid offering of its own in this area, PerformancePoint, which they backed away from. That probably made sense because it was still many versions away from truly competing with the established players. The OutlookSoft product set was designed from the ground up to support and take advantage of Microsoft technologies so SAP is a logical partner for Microsoft in this area. What does this mean though for other BPM vendors with Microsoft-based solutions? Whatever happens, the fact that budgeting and planning is the new battleground says a lot about the growing importance of business performance management.