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Another Chance for Performance Management

Originally published January 9, 2006

While many companies are just beginning business performance management (BPM), quite a few have gone before and are revisiting their BPM implementations. These second-timers fall into two distinct camps: expansionists and revisionists. The expansionists are clearly the most successful type, with few exceptions. These expansionists are moving closer to fulfilling the promise of business performance management. Each group has its own lessons learned, and distinct motivations for a second pass at business performance management.

Business performance management has been around for several years now. Most of its components have been around even longer. Not surprisingly, some of the early adopters are looking at their systems again. Most commonly, a company that successfully implemented just a piece of business performance management has come back for more.

Typically, these organizations initially implemented the planning component of business performance management to address an urgent pain. Now they are trying to make sure their monthly actuals are in order (financial consolidation and reporting), and attempting to leverage all of this data for better decision-making through KPIs (key performance indicators) displayed on a dashboard.

Some expansionists, though, are moving beyond straight financial BPM into operational analytics to optimize performance in each of their major functional areas. These companies are on the road to realizing the full vision of business performance management. What is that vision? A holistic, focused view of the organization that utilizes accurate, reliable planning and actual performance data shared company-wide through an intuitive, graphical interface.

Unfortunately, some of these expansionists have ended up working backwards. Instead of starting with planning or consolidation (or a data warehouse) to get their data in order, they started with a dashboard. This may have seemed like the easiest nut to crack, the shortest path to BPM payback, or maybe it was just the graphical appeal of the dashboard.

They discovered that a performance dashboard is only as good as its underlying data. If people don’t trust the numbers they won’t use it. They also won’t use it if it tracks the wrong KPIs, but that’s another discussion.

Now these companies are going back to fundamentals – getting the data right. They are implementing planning to replace the messy, difficult to access, and un-trustworthy Excel planning, which many organizations still rely. Consolidation systems are being implemented to collect and process data from multiple ledgers, in multiple countries, with multiple currencies. They are cleaning and organizing other pertinent data into a warehouse for BPM. Once organizations can move past those hurdles, they can achieve the full benefits from their underutilized dashboards.

This brings us to the revisionists, whose BPM systems failed to live up to initial expectations, or didn’t keep pace with changing requirements. These revisionists are going back to determine how to make the system do what is needed today.

They may need to upgrade the system or acquire missing modules, redesign/re-implement the system, or in the most extreme cases, throw it out and start over. How did they land in this unenviable position? The most common explanation is simply that they bought the wrong software. Whether they want to admit it or not, some organizations did not engage sufficient senior resources or outside experts. As a result, their BPM requirements were not fully considered and there was inadequate due diligence during the software evaluation process.

Many of the people looking at fixing their BPM solutions today inherited them from a project team that has moved along to other roles. Their absence is further evidence of highly visible BPM failure.

There are revisionists who, in fact, got the right software, but implemented it poorly. This may be due to lack of strong project/engagement management or because they used the lowest cost or most local (and sometimes least capable) implementation consultants.

The final group looking to revise their BPM systems did nothing wrong. The world simply changed around them. These companies have experienced rapid growth (or downsizing) and their requirements have changed. They must step back and document their current requirements. Next, they need to validate that their current product can meet those redefined requirements. If the answer is no, they must determine their other software options. Lastly, they should have an expert review the way they implemented their solution. By doing this, they can optimize performance and take advantage of all available product functionality.

Another group that falls into this camp consists of companies that went through a merger or acquisition. Not only will their requirements be dramatically different now, but also they may have to choose from multiple BPM systems that existed before and face complex software and data integration challenges. 

If you are just embarking on a BPM project, there are many things you can learn from second timers: prepare detailed requirements, thoroughly evaluate your software choices, focus on getting the data right first and bring as much expertise as possible. When you become a second-timer you want to make sure it’s as an expansionist (moving in the right direction), and not as a revisionist. As business performance management becomes a core system for most companies, frequent re-evaluation and monitoring is required to make sure these systems evolve along with your company and the market around you.

  • Craig SchiffCraig Schiff

    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!

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