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Best and Worst of Performance Management in 2007

Originally published January 23, 2008

This past year was quite an eventful one for business performance management (BPM). In our role as analysts at BPM Partners, we get firsthand information from senior management at the vendors as to their plans, strategies, and rationale behind any merger and acquisition activity. In addition, our field consulting group is tasked with helping address the daily challenges faced by end users attempting to implement BPM. Combining both of these perspectives, we now present our Best and Worst of 2007 in BPM.

Best Merger: IBM’s acquisition of Cognos. We believe this merger is beneficial to both Cognos and its customers/prospects. The primary reason is that unlike many other mergers of the past year, there is little product overlap. In addition, the deep business knowledge of IBM’s consulting group combined with the power of Cognos’ performance product platform can lead to even stronger business performance management offerings going forward. A side benefit for all BPM purchasers is that it brings IBM to the performance management table. Having IBM challenging the likes of SAP, Oracle, and Microsoft should help keep innovation alive and, just maybe, make BPM pricing more competitive.

Worst Merger: Applix being acquired by Cognos just prior to the IBM acquisition announcement. It seems like Applix, once a strong contender in the market, has become lost in the shuffle. What does the future hold for these guys? We haven’t heard anything about the future of Applix since the IBM announcement. It’s a shame too. Applix was very successful as a mid-market platform for BPM. They always had one of the highest customer satisfaction ratings among all business performance management vendors. Hopefully when the dust settles, someone will focus on this and Applix will have a clearly defined place in the new organization. Perhaps the role will be leading the charge for IBM/Cognos in the mid-market.

Best Trend: Enterprise resource planning (ERP) and business intelligence (BI) vendors repositioning themselves as performance vendors. No one has the budget for technology for its own sake, but when it’s tied to something of strategic importance such as improving business performance, then every company should be interested. This is great for the vendors, obviously, as it helps sell more software. However, it’s also great for the end users because it forces the vendors to explain and justify how their products actually accomplish improved business performance. In some cases it has led to the vendors purchasing necessary components or enhancing their own to leverage their tools to address this important business need.

Worst Trend: ERP and business intelligence consultancies repositioning themselves as performance consultants. As the vendors have been evolving their messages, so have the consultants. The problem is that while most of these guys know their star schemas and meta data structures inside and out, they are not experts on how to determine a company’s key performance indicators that tie back to strategic corporate objectives or budgeting, operational analytics or financial consolidation best practices. The reality is that technology experts are in fact still essential in the performance world, particularly when it comes to BPM 2.0 where few packaged applications exist. There is a growing demand for performance experts, but a background in business operations and finance is usually a better fit than a technology background. The ideal answer, I believe, is for technology consultants to partner with performance consultants.

Best Business Decision: BPM is no longer being placed on the back burner, and companies are adopting performance management in droves. For many years, BPM has primarily been picked up on by the higher end of the mid-market. In 2007, we saw many smaller companies as well as some of the largest organizations jump in. Clearly, performance management has hit the mainstream. The trend in prior years to focus on putting out fires and getting to BPM “eventually” has been replaced by doing BPM in parallel with other pressing projects.

Worst Business Decision: Unfortunately, there are still many companies stumbling through their performance projects with a trial-and-error approach. This makes the projects take longer and costs far more money than if they would just selectively leverage established expertise and best practices at appropriate points. In fact, recent survey data indicates that almost 15% of companies are in the process of replacing their BPM systems. Clearly, it would have been much less expensive to get it right the first time. Even in companies where performance systems are not being replaced, they are being underutilized. We have spoken to many companies with grand visions for BPM that then go off on their own and end up with a dramatically scaled back reality. To save face, and perhaps their jobs, they say they are satisfied. We, on the other hand, see that they are using less functionality and typically have fewer users than systems implemented following a best practice approach.

All in all, 2007 was a positive year for business performance management, and the future looks bright. As the vendors analyze their acquisitions and finalize their product plans, we expect to see more robust and complete performance suites. In 2008, we believe the high rate of BPM adoption by end user organizations will continue. If those new to BPM choose to learn from those that have gone before, then 2008 will be a great year for performance management.

  • 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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