As expected, the significant realignment of the business performance management (BPM) vendor landscape over the past year has had a major impact on the vendor selection process. The problem is that in many instances, buyer perceptions may have changed more than the reality of the actual vendor changes. A more concerning trend is that many buyers are forgetting the basics of developing requirements, matching them against the potential solution candidates and then conducting the appropriate level of due diligence required to complete a technology platform decision. The BPM technology roadblocks of the title are these buyers: managers (often in IT or purchasing) who are making inaccurate and broad assumptions, which can easily lead to the wrong purchase decision.
You Cant Go Wrong with the Big Three
Lets look at some of these assumptions and the reasons they are problematic. The one I hear most often these days is, You cant go wrong with choosing one of the Big Three. By Big Three, most people usually mean Cognos, an IBM Company; Oracle (Hyperion); and SAP (Business Objects/OutlookSoft). Certainly, they are all large, stable companies with comprehensive and robust performance management product sets. However, there are actually two fallacies in the assumption that you cant go wrong by choosing one of them. The first is that for several types of purchasers, they may not be a good fit. Secondly, it is implied by the statement that they are virtually the same. In other words, the results of choosing one will be very similar to choosing any of the others. This is absolutely not the case. While these vendors cover much of the same ground, they go about it very differently and each has its own strengths and weaknesses. Based on your specific requirements, one of these vendors will be a much better fit than the others.
Lets jump into the details. There are at least three types of companies where the Big Three may not be the best, or at least shouldnt be the only choice. For starters, small to midsized companies could probably do better elsewhere. While the big guys have tried to target at least the higher end of this market, there are many smaller vendors who do it better. Those smaller vendors offer ease of use, reduced demand on IT personnel and infrastructure at an attractive price point while still recognizing the need for a full-featured solution. So while the flagship offerings from the largest players offer rich functionality, it often comes with added complexity, a hefty demand on IT and a high price tag. In addition, their scaled-down solutions for the midmarket have missed the mark so far.
Another group that should look at alternate vendors consists of companies that have addressed their business intelligence (BI) and/or enterprise resource planning (ERP) needs to date with a vendor that doesnt offer a BPM solution - or at least not one that meets their needs. They do not need the comprehensive BI+ERP+BPM offerings of the big vendors. They are just looking to add performance applications, which they can get from a vendor that focuses all of its resources in this area. The BPM application-focused vendors design their solutions to work well with multiple ERP and BI systems, because they are not a vendor of those solutions themselves.
The last group that often finds what they are looking for outside of the top vendors is the group of companies with highly focused and specialized needs. While the big companies address many topics fairly well, there are small, specialized vendors that do one or two things exceptionally well.
Now, lets look at the other side of the coin. Suppose you need the power and breadth typically found in the offerings of the Big Three. You should select one of them as your BPM solution. Not just any one though; they are inherently and distinctly different. You should put them through their paces and select the one that best meets your requirements.
How do they differ? Let me count the ways. They are each at different maturity points when it comes to components like profitability optimization and governance, risk and compliance. If these newer areas of BPM are important to you, then you should seek out the vendor with the most well-developed offering in that particular area. These vendors also differ quite a bit when it comes to things like ease of maintenance and scalability. Of course, they also tend to be optimized for different underlying database platforms. One of the Big Three is better at Excel integration and having a unified budgeting and consolidation offering. However, the other two are further along in addressing their overall product integration challenges. One of them is better at global statutory consolidations using its primary offering, while another requires you to use an alternate consolidation product to get equivalent functionality. I could go on, but the point is this: while they cover almost the same ground, how they do it and where they focus today and into the future will vary widely. In other words, the particular functionality offered by one of the vendors today coupled with their future roadmap will better align with your needs than the others.
We Already Know Which Product We are Getting
Some companies have already made the decision that no matter what, they are going to go with a certain vendor. Typically, this vendor is their ERP provider who has recently acquired far stronger performance products than it had in the past. This may be the right decision from both a data integration standpoint and an add-on pricing perspective. However, there are still two key reasons to go through a vendor validation process. The first is that while the decision may have been made, it is still valuable to understand where the product falls short of meeting your requirements. This knowledge will probably not stop you from buying the product (although if it falls far short, you may want to consider stepping back from your decision). The real point of this knowledge is to enable you to start filling in the gaps and setting the right expectations. For example, if you discover the product doesnt handle intercompany eliminations to your liking, you may want to start developing an in-house alternative and let the intercompany junkies in accounting know that your purchase of this the product is not intended to meet their needs.
The other important reason to go through a vendor validation process is to obtain user buy-in. Lack of buy-in, and therefore lack of use, is a common failure scenario for BPM systems. If the product purchase is seen by the masses as a CIO or CFO dictate, then some will question this unilateral decision and look to find fault. On the other hand, if a committee is formed with the key stakeholders involved in the analysis and decision process, they will come out of this with an understanding of why this product was selected and a feeling of ownership in the decision. All of this will be communicated back to their constituents, resulting in greater acceptance of the new system throughout the company. If the requirements are properly defined and prioritized by the CIO and CFO up front, it is unlikely that this committee will do anything other than endorse the proposed solution.
Just because there are bigger and better solutions available in the BPM world today does not mean that we should forget the basics of technology product selection. We still need to develop detailed requirements, identify vendors that appear to meet those requirements and do a deep dive to see which one is the best fit. Big Three or not, you can still make the wrong BPM purchase decision, and it will be a costly and highly visible mistake.
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