There have been many recent changes in the business performance management (BPM) world. For one thing, there is a notable uptick in companies now embarking on BPM projects for the first time. In addition, the solution options available have changed dramatically in the past 12 to 18 months. New entrants into the BPM market, newly merged vendors and major new releases have changed the playing field quite a bit. In light of these factors, I thought it would be of value to review the key steps to get started with your performance management product search.
This column assumes that you have your detailed functional requirements in hand and are ready to begin. If your requirements are not ready, dont worry. I will address the collection, consolidation and prioritization of BPM-specific requirements in an upcoming column. If you are interested to learn more about this important functional requirements step right away, you can read a past column I wrote on the subject in the February 2004 issue of DM Review.
The first step in mapping your requirements to available solutions is to determine the category of solution you are in the market for. As a result of the recent major mergers in performance management and business intelligence (BI), the categories themselves have changed for the better, I believe. In prior years, the main categories of BPM solutions available were: tools, applications, applications and tools, and enterprise resource planning (ERP). The tools were, for the most part, raw BI capabilities that could be utilized to build a custom solution. It was usually a long and difficult process. The application vendors offered prepackaged solutions with built-in domain expertise targeted at end users. The vendors of both applications and tools offered the best of both worlds, allowing companies to extend the capabilities of their applications with a compatible toolset. For many users, this was the solution category of choice. Lastly, there were the ERP vendors who provided basic BPM functionality to supplement their transactional offerings. Virtually no one outside of their existing customer base bought these solutions. In fact, many of their customers went elsewhere for BPM as well. All that has now changed. Lets look at the current categories of BPM solutions and the pros and cons of each.
Specialized vendors. The focus is no longer on tools and applications, but breadth and depth of offerings. In fact, there are very few tools-only vendors successfully competing today in the BPM market. The specialized vendors have elected to focus on one or two key aspects of performance management. This means that all of their expertise, development and support dollars are focused on their chosen areas. The result is usually functionally rich, robust solutions that are very focused. If you are also focused on just one aspect of BPM for now and the foreseeable future, then these vendors may be the best fit. You can also assemble a best-of-breed performance suite from the offerings of the specialized vendors, but there will be significant data integration work and user interface inconsistencies. On the other hand, if you already have a BPM suite and it lacks one key area of functionality, perhaps you can find it here.
Financial performance management suite vendors. The application BPM vendors have morphed into the financial suite vendors. Most started with budgeting and planning and over time added financial consolidation capabilities (from rudimentary to sophisticated), reporting, performance dashboards and other functionalities required by the CFO. As you would expect, this group of solutions sells well to buyers in the finance department and to end users looking for a high degree of self-sufficiency. Because the financial performance suite vendors do not also offer ERP or BI solutions, they are designed to work well with most of the existing products of this type that may already be in place. If you are interested in a full BPM application suite either today or down the road, these vendors are a good choice. If you are also looking to purchase a new ERP or BI product at the same time (or buy a BPM solution fully integrated with your existing ERP/BI solutions), then the next category may be a better fit.
Comprehensive vendors. These vendors offer complete performance management suites tightly integrated with their own ERP and/or BI solutions. This is where you will find the behemoths in the industry. Since a number of these giants were created by acquisitions in the past 12 months, the tight integration mentioned above is still more vision than reality. However, if your organization has standardized company-wide on a particular ERP or BI vendor, then looking at adding their performance offerings makes good sense. Over time, this will reduce the data integration challenges and offer a fairly seamless user experience as you move from module to module. Most of the comprehensive vendors also market their BPM solutions as standalone offerings to companies that are not users of their other products. Time will tell how successful this strategy is.
Each of these categories can appeal to multiple audiences, but usually one is a best fit for a particular organizations BPM requirements and existing systems status. If your vendor selection shortlist cuts across more than one category, then you tend to end up comparing apples to oranges. For a more focused evaluation process, it is probably best to select most of your vendors from a single category. I say most because you may want to, for example, look at your ERP providers BPM solutions and then compare them to several of the financial performance suite vendors. As you can see, though, vendor category is a key decision to be made early in the selection process.
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