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Performance Management in Turbulent Times Results from 2009 BPM Pulse Survey

Originally published June 17, 2009

Since 2004, BPM Partners has been conducting the annual BPM Pulse Survey, research that is intended to monitor market perceptions, strategic initiative interest and vendor satisfaction. In 2009, the Pulse Survey included nearly 800 performance management practitioners, represented across a wide range of industries, geographies and company sizes. Respondents had the opportunity to share their experiences through 38 questions on the topics of business performance management (BPM) project status and drivers, prioritized business and technology needs, scope of their BPM project and overall satisfaction with their vendor and deployment. The following is a summary of the 2009 results. A more comprehensive summary white paper is available. Click here to download the comprehensive summary.

This first section of the survey focused on the existence, current status and future plans for BPM projects at the respondent companies.

Plans for BPM Initiatives

More companies than ever are implementing performance management initiatives. In the 2009 survey, 81% of respondents had either completed a BPM initiative, have one planned or have one in progress, up from 77% in 2008.

Twenty-seven percent are planning a BPM initiative in either the short term (less than 12 months) or long term (12 months or greater), lower than the 35% in 2008, but above the 20% in 2007. The biggest shift was in timing of BPM plans – in 2009, only 8% report plans for BPM projects in the short term versus 25% in 2008. This likely reflects a deferring of plans due to economic conditions, as 19% of companies report having longer term plans versus 10% last year. Only 8% reported having a completed project, equaling the 2008 number. We believe this reflects the fact that for many companies, performance management is an ever evolving project that is never really “complete.”

Current BPM Initiatives

Among companies where there is a BPM initiative in progress, 31% of those are new projects. Of the remaining projects, 14% are replacements of an existing solution, while 55% are expansions of or refinements to existing applications.

 
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When asked why there is not a BPM initiative in progress, the main reasons given were lack of clarity regarding the benefits and lack of executive sponsorship. However, these reasons were given not much more frequently than in 2008, and less frequently than in prior years. The primary reasons given in 2008 – other priorities and lack of funding – were not as prominent in 2009. In general, it does not appear that “no plan” organizations cannot fund projects that can impact bottom line performance, but some organizations have not fully understood how the benefits are applicable to their organization.

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Impact of the Economy

With economic volatility that became more apparent in mid 2008, we thought it would be helpful to assess the impact of the economy on performance management plans. When participants were asked the question directly, it became apparent that the role for performance management becomes even more apparent during difficult financial times. With IT system investment likely to be lower across areas of enterprise systems, 38% of respondents commented that the economy would have no impact on their BPM plans, while a total of 52% would actually increase their focus on performance management. Of this group, 28% who acknowledged that they would increase focus also recognized that they would have to do so in a more cost-effective manner than they have in the past. It was quite reassuming that only 10% suggested they would decrease their focus due to distractions or funding concerns.

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When asked more specifically about what areas of performance management would have a heightened focus during difficult financial times, it was of little surprise that profitability optimization, operational analysis, scenario modeling/what-if analyses and strategic planning were at the top of the list for all respondents. These are all capabilities that can be addressed by a variety of performance management solutions.

 
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Goals of Business Performance Management

Companies were looking to realize specific benefits from their performance management initiatives, the most often cited being (not surprisingly) to improve company performance. The next top BPM driver was improving operational analysis, followed by improving operations: fixing processes and reducing cycle times. Also frequently cited was aligning on one centralized version of data.

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In line with a desire to improve performance and reduce costs, companies again named budgeting and forecasting as the primary BPM component being implemented, with Financial Reporting ranking second. This year strategic planning took a back seat to dashboards and operational analytics, perhaps indicating a focus on short-term analysis and business visibility, as opposed to longer term strategic concerns.

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Overall Conclusions

In summary, this survey shows that even in a difficult economic climate, BPM is considered an important enterprise application, with more companies than ever implementing BPM solutions, and 90% of companies surveyed are maintaining or increasing their focus on performance management applications. BPM implementations are becoming faster and more cost effective.

Considering the typical success rate of software installations in general, satisfaction with BPM projects is high, with 68% of companies reporting that their projects are meeting or exceeding expectations (22% saying it’s too early to tell). Only 10% said their project fell short of expectations. While 10% is not high and does not necessarily indicate that the projects were a total loss, it does show that care must be taken to ensure that projects are planned, designed and delivered in such a way as to produce the desired results.

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As mentioned earlier, a more comprehensive summary white paper about this research is available. Click here.


  • John ColbertJohn Colbert
    John, Vice President of Research and Analysis at BPM Partners, is responsible for market trend analysis, services development and technology vendor relationships at BPM Partners, the leading independent authority on business performance management (BPM) solutions. Prior to BPM Partners, John was Senior Director, Product Marketing at Hyperion Software, responsible for directing Hyperion's OLAP Business Analysis financial software products. Earlier in his career, John was an end user of performance management solutions while a product manager at Raychem Corporation, a Fortune 500 company that has since been acquired by Tyco. John has contributed to many publications including the New York Times, BPM Magazine, Information Week, Business Finance and eWeek, and he is a regular presenter at performance management related conferences and web seminars.

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Comments

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Posted July 6, 2009 by Bri Adams

I enjoyed your post John. I am an intern working with Oracle within EPM. I agree,  performance management is a major concern for executives, espically during harder finanical times such as now. Given your research, you might be interested in a similar study Oracle did. We recently completed our first Enterprise Performance Management Index, which showed what factors contributed to or took away from sucessful implementation of related programs. For example, considering the needs of stakeholders had the lowest scores for respondents across various industries. To see more results from the survey, please go to http://www.epmtv.eu/EPMIndex/22.

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