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Why Real Companies Choose Business Performance Management as a Path to Solve Business Challenges

Originally published June 13, 2005

 

What is driving companies today to adopt business performance management (BPM)? That’s a key question that many software vendors and service providers need to answer on a daily basis. It’s of interest to many IT and Finance directors as well.

 

Through our annual BPM Pulse survey, we have developed a clear picture of intentions for both finance and IT managers. As a reality check, we have an additional way to understand BPM motivators. It is less scientific, yet in some ways more compelling than reading a survey. I have selected a series of case examples which describes what a variety of our new clients are seeking to accomplish when they start on their Business Performance Management initiative. 

My intent is not to give you the solutions to their challenges, but rather to represent the perspective these organizations currently hold, so that you can judge whether your organization is in a similar position.

As background, a growing number of companies have engaged us to help them define requirements and select software vendors. The problems they want to address, their priorities and desired BPM path give strong indications of their current business challenges. Let’s look at some of these companies, discuss their goals with Business Performance Management and finally, draw some conclusions:

  • A leading cost management company in the healthcare industry, with more than 1,000 employees, has depended on an elaborate Excel model combined with Microsoft Access. Management has been requesting new types of reports, and much more frequent reports such as monthly revenue forecasts. With the extra workload, this company collided with familiar problems: their desktop tools are not robust enough for the more demanding analysis, and many days are spent tinkering with Excel in labor-intensive mode to generate the new reports. This company wants to focus on revenue analysis, taking it to a very granular level. When we began working with them, this company had already sent a Request for Information to 15 vendors. It’s no surprise that in return, they received a 100 percent affirmative response. With no supporting detail, every vendor happily claimed to deliver every feature this company sought. The client asked us to help define requirements, recommend additional vendors that might fit their needs, and guide the vendor evaluation process.
  • The clinical research and development team of a major publicly listed biotechnology company recruited us for requirements definition and vendor evaluation, but with a unique twist: they seek a dashboard reporting solution with completely non-financial performance indicators. Instead, all the Key Performance Indicators (KPIs) will focus on project management, testing milestones and metrics, statistics on patients enrolled in drug studies and other operational aspects. This is very different from what you may have seen on a “traditional” financial dashboard.
  • A subsidiary of a public Japanese company, dedicated to leasing refrigerated shipping containers, must efficiently plan and track major capital investments. Recently, this subsidiary merged with a sister company. For years it has relied on Hyperion Pillar and Essbase, but gradually it moved to using Pillar as a data collection tool. This company set a prerequisite—that its new planning and reporting solution must work on top of Essbase, its legacy analytic system. Although this is a very specific case, we see many organizations who want to move forward with improving the usability of their applications, while not changing their legacy infrastructure.
  • Another large subsidiary of a public Japanese firm manufactures OEM parts for auto makers. This company has long relied on Excel for planning and budgeting. It sends operating results to the parent company, which handles statutory reporting, but needs to improve its internal reporting capabilities. This company is keen to capture both financial and operational data in the Business Performance Management solution it selects. It has a clear path defined: after addressing planning and budgeting, it will tackle consolidation and reporting.
  • A national insurance firm based in the Southeast, in the midst of implementing SAP, wants to move from PeopleSoft Budgeting to a system that can immediately help them with planning and budgeting, then encompass statutory reporting and eventually, scorecarding.

These companies, after looking at the business performance management possibilities on their own, saw a need for consulting help to frame their business issues, define requirements, assist in vendor selection and implementation.

From these and other new clients, it’s clear that today companies urgently want business performance management  for planning and budgeting. Their struggle is to transition from reliance on Excel or rigid legacy tools. They do not seek limited-purpose business intelligence tools; instead, they want systems that effectively address strategic planning and forecasting today. A growing number of clients have laid out a business performance management growth path they intend to follow, and any systems they select must accommodate that path. We see sophistication arriving in the user base, with a discriminating eye to future plans and a strong desire to avoid early missteps. 

  • 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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