Several years back, I did a presentation that included a section entitled “10 Questions Vendors Hate.” In reviewing them recently, I found that most are still valid. Today’s
vendor environment, with its emphasis on mergers and acquisitions, creates an additional series of questions that need to be asked. In the highly competitive world of business performance
management (BPM), I think vendors are just happy to be talking to prospects – so they don’t truly hate any questions. That said, there are still questions that they would prefer not be
asked. However, those are just the ones you should be asking. With that in mind, here are some tough questions to ask your potential BPM vendors.
1. What are your detailed plans (with timeline) for product integration?
We are all familiar with the major mergers and acquisitions that have taken place recently in the business performance management space, but there are also minor fill-in acquisitions that take
place fairly regularly as well. While it’s great to have one vendor address all of your BPM needs, it’s not so great if the products don’t work together well. After the merger,
the resulting company will often say things such as, “We’ve been working together for years, so we are practically integrated already.” That’s like saying the software is
practically bug-free – it either is or it isn’t. In the case of integration, there are several areas that need to be understood. When will there be a common user interface with a
single sign-on so users don’t have to learn several different command structures and menu systems? When will there be a single database? In the meantime, while data has to be moved from one
data structure to another, how is that accomplished? When will the products/modules share a common set of metadata? In the case of BPM, this means setting up a single chart of accounts and
organizational hierarchy that all components of the solution will access. Until this is done, you will need to find a product to synchronize the metadata or maintain multiple versions yourself.
Of course, the ideal answer to the main question here is this: “Our products are fully integrated today since we developed all of them ourselves on our own platform.” But there are
fewer and fewer vendors today that can say that.
2. What does your product road map look like?
It amazes me that after an acquisition that includes many redundant components, the merged company will swear that all products will live on. What’s even more amazing is that existing
customers buy that story. It’s like the hapless employees who are told there will no be no post-merger job cuts and are then shocked when they are let go to help achieve the economies of
scale promised to the shareholders. Many of today’s largest BPM vendors have multiple versions of the same component (planning, consolidation, dashboard, etc.). This is because before the
latest acquisition, they had a version they created themselves or previously acquired. Each version has its own adherents and customer base. Even though they will probably maintain multiple
versions of the same component for a period of time (to reduce customer defection and continue the flow of maintenance revenue), the real question is: Which is the version that will be enhanced
and actively promoted by sales and marketing? As a new customer, you need to determine that before you buy. The existing customers will most likely be incented to move to that product version
The product road map question is also important even if your prospective vendor is not part of the recent wave of mergers and acquisitions. For example, if their product plans involve porting
everything over to a hosted version that is not of interest to you, there are less research and development dollars being spent on enhancing the things that are of interest to you. Or, if your
phase two BPM plans are focused on risk and compliance, and that is nowhere on their road map, you may need to look elsewhere.
3. What percentage of new BPM customers are from outside of your existing customer base?
This question is really for the business intelligence (BI) and enterprise resource planning (ERP) vendors that have just added to or upgraded their BPM capabilities by acquisition. For their
existing BI/ERP customers, they have now provided a viable path to business performance management. However, if you are not one of those existing customers, should you be buying BPM applications
from them? The issue is really about where their focus will be. If the majority of their BPM customers already own their other products, then they won’t mind if future development is more
focused on the ERP modules or BI tools since they own those as well. As a BPM-only customer, that won’t be of any benefit to you. In addition, if some future BPM enhancements require the
use of some BI tool or ERP data structure from the vendor, existing customers won’t have an issue. For the BPM-only customer, this may generate additional software or labor costs. Lastly,
if the majority of their clients own BPM plus their BI or ERP offerings, where will that leave you in terms of priority and importance to them? When asking the main question regarding percentage
of BPM-only customers, make sure the answer is focused on post-merger sales activities. Of course, they will have inherited many BPM-only customers as part of the acquisition, but some number of
those may be in the process of looking at alternatives now that their original vendor is no longer independent and the product vision they bought into has an uncertain future.
The questions presented here are clearly geared to those vendors that have grown by acquisition. In the current BPM world, that is the case for many of the leading solution providers. In future
articles, we will present tough questions that are applicable to a broader range of BPM (and even some non-BPM) vendors.
SOURCE: Tough Questions to Ask Business Performance Management Vendors
Recent articles by Craig Schiff