2007 BPM Pulse Survey Results, Part 2 Company Size Does Matter
by Craig Schiff
Originally published April 18, 2007
This is the second in a series of articles summarizing and analyzing the results of BPM Partners’ annual BPM Pulse survey. For details on respondent demographics, please see Part 1.
There has been great debate about whether small and mid-size companies have the same performance management needs as larger companies. To answer that question, we looked at the BPM Pulse survey results sorted by company size. In this year’s survey, companies could identify themselves as small (less than 1,000 employees), small/medium (1,001 to 2,500 employees), medium/large (2,501 to 5,000 employees) and large (over 5,000 employees). There were more than enough respondents in each category to produce statistically significant results.
While overall 50% of respondents said they were in the midst of a business performance management (BPM) project, only 40% of the small companies responded that way. On the other hand, 60% of the medium/large group said they had an in-process BPM project. The largest companies were more in line with the overall average, coming in at 52%. What this says is that the greatest BPM momentum is in the high end of the mid-market. This explains why there are now more vendors than ever targeting this segment (vendors solely focused on this market as well as enterprise vendors with pricing, packaging and distribution models designed for this group).
As far as which components of business performance management are most important, companies of all sizes were in agreement: budgeting and forecasting is still the most important area to be addressed. Dashboards were the second most important element, except for the largest companies where operational analytics beat out dashboards by a slim margin. This consistency does demonstrate that the fundamental elements of business performance management are equally important across the board, regardless of company size.
When looking at the type of vendor providing their BPM solutions, there was significant variance by organization size. Respondents were asked to identify the category of vendor they were looking to for business performance management. The choices were: enterprise resource planning (ERP) provider, business intelligence (BI) tools vendor, BPM applications vendor, or vendors of both BI and BPM. Overall, two choices received the majority of votes: 44% of companies were looking at vendors of both BI and BPM, and 38% were focused on pure application vendors. However, this is an area that varied significantly, and somewhat unexpectedly, by company size. The smallest and largest companies favored vendors of both tools and applications by a wide margin. However, both of the two mid-sized groups favored pure application vendors, also by a wide margin. It seems unusual that the smallest and largest groups would be in agreement on this, but it may be for different reasons. In larger companies, selecting a single vendor for business intelligence and business performance management is consistent with the goals of standardization initiatives that may be underway. Smaller companies with limited software dollars may be looking at all-in-one solutions that provide everything they need at an attractive package price. The mid-market companies appear to be zeroing in on best-of-breed applications to work alongside their existing BI and ERP solutions. They may not have the dollars or resources available right now to replace their existing BI solutions as they move forward with BPM.
Several vendors now offer hosted, software-as-a-service (SaaS) BPM solutions either directly or through a third party. The interest in those solutions is greatest, as expected, in the smaller companies, with 50% of those companies willing to consider a SaaS BPM solution. They cite reduced IT demand and the cost-effective nature of these solutions as the primary reasons. The medium/large organizations show the least interest in hosted solutions, with only 20% open to the possibility. The primary reason they are not interested relates to their perception of security issues surrounding this approach. Fortunately, most vendors that offer hosted solutions also offer an on-premises version as an upgrade or alternative.
How the products get implemented is another area with responses that varied by company size. Respondents were asked if they preferred assistance from vendor consultants, third-party consultants or a combination of the two. No group had a majority favoring sole reliance on third parties. The smaller companies wanted to get implementation consulting directly from the vendor. The medium/large and large companies preferred a combination of vendor consulting and third parties. Perhaps the smaller companies wanted to keep things simpler with fewer consulting groups to coordinate and manage.
While all companies may have some needs in common, company size really does matter when talking about BPM solutions. For this reason, it is unlikely that a single vendor can address the needs of all market segments, especially with the same product. Most vendors understand this, and they tend to target one or two of the four segments analyzed here. Some vendors, particularly the ones successful in larger enterprises, have tried to repeat their success in other market segments, but so far with little to show for their efforts. The survey data presented here along with additional data in the full survey helps explain why. For your own summary copy of the 2007 BPM Pulse Survey results, click here.
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