In Part 1 of BPM 101: Vendor Selection, we looked at how to develop your requirements and identify the vendors to be included in the evaluation. In this article, we look at the remaining steps in selecting the ideal business performance management (BPM) solution for your company.

Before you go any further, if you haven’t already put together a committee that consists of, or at least represents, the key stakeholders, you need to create one now. This group should have representatives from all major departments that will be impacted by the BPM solution, not just finance and IT. The key benefits of this are: taking advantage of the combined wisdom of a diverse group, achieving ownership and buy-in from the key stakeholders, and reducing the pool of potential naysayers if the system doesn’t turn out quite as planned. As a matter of fact, if there is someone strongly tied to any current systems that are being replaced, that person should be on this committee as well in order to feel connected to the new system initiative.

Evaluations
Although you may want to spend some amount of time looking at the slick, canned vendor demos, you will want to focus the bulk of your time on scripted demos, or “proofs of concept.” In business performance management today, many of the systems, at least at a superficial surface level, look and feel very much alike. You will not get very far in differentiating the contenders without some customization focused on how you will actually use the system in your company. Either on your own or with the help of outside experts, you need to identify the most important and/or most difficult aspects of your planned use of business performance management. Then, develop a script that you want the vendors to follow that demonstrates how their product will uniquely meet your needs. For example, if you allocate certain expenses down to individual business units based on their percentage contribution to consolidated revenues, have the vendor demonstrate how their product can handle this sometimes tricky multistep process. Then, evaluate the various vendors on the ease with which this is accomplished. Of course, in most cases it will appear simple and straightforward when demonstrated. That’s why you need to ask to see how it was accomplished. This is where differences will become apparent. Some products will have complex logic rules that a consultant wrote to make this happen. Others will have created shadow accounts or entities to hold interim calculation steps. Those best at allocations will have pre-built functionality to streamline the process and make it easier for you to administer and maintain. If you look at most of your key requirements this way, certain vendors will begin to stand out from the pack.

Just asking the vendors to create a custom demo or proof of concept will begin to shrink the list of viable contenders. Some will decline. The reasons can range from simple economics (the potential revenue from you is not worth the cost of this sales effort) to recognition by the vendor that your needs are not a good fit for their product. Also, in some cases, they are just too busy. Whatever the reason, it is better for you in the long run that they dropped out early. If the product was a good fit and they really wanted you as a customer, they would have found a way to accommodate your request.

Before the vendors come in and run through their custom demos, there a few internal steps that need to take place. First of all, you have to train all the members of the evaluation committee on what business performance management really is and how the company plans to use it. Without that knowledge, they may not be on the lookout for important capabilities and may focus on irrelevant ones. For example, some of the committee members may be wowed by products that can produce fancy animated 3D graphics. If, however, your focus is on a system that can work with Excel and crunch numbers really fast, then there is going to be a disconnect.

You need to prepare a scoring worksheet that has columns for each vendor and rows identifying your key evaluation criteria. It would also be useful to include weighting factors, adjusting for the relative importance of each element. Whatever tool you use to create this scoring worksheet needs to be able to quickly and easily consolidate the results from all committee members. When the vendors come in, each evaluator should enter their reactions in the worksheet. In the end, the scoring worksheet should highlight the top vendors as selected by your team.

In addition to evaluating how successful the vendors were at accomplishing the goals of your demo script, there is a key question you need to ask each vendor: What are your short- and long-term product plans? The long-term plans will tell you if their research and development investment is going to be aligned with your needs. For example, if they say they plan to rewrite the product for a hosted environment and that doesn’t interest you, you may want to consider a different vendor that is more focused on development in areas that are of interest to you. The short-term plans will tell you what is lacking in their current solution. If they say the next release will have even better integration between modules, that probably means the market or their clients have said the current integration is not good enough.

When all the vendors have gone through their paces, you can look at the consolidated results. While it may appear obvious who the favorites were, be sure to watch out for any sizeable variances. That is, if a vendor received an 8 average on a 1 to 10 scale for a key feature, were all the votes around 8, or were there some 10s and some 6s. Those are very different situations. In the latter case, you need to take into account that some people were not thrilled with this vendor’s performance in a certain area and may not be excited by the prospect of choosing them for your BPM solution.

Once you have selected the best solution for your needs, it is time to determine the modules that you need, how many seats, negotiate the best deal and determine who will assist with implementation. We will cover these topics in future articles.

Recent articles by Craig Schiff

• Business Performance Management in 2010, Part 2
• Business Performance Management in 2010, Part 1
• How Executive Information Systems Evolved Into Performance Dashboards
• The Emerging Leaders in Performance Management, Part 2