Business performance management (BPM) software has been around long enough now to have evolved beyond its original core functionality. Today's offerings are robust, with deep functionality, a wide breadth of capabilities, extensive compatibility and fast performance, all coupled with ease of use. Have we arrived at BPM nirvana? Not quite. What would be required of the perfect BPM solution? A number of characteristics are either still in the early stages or cannot be found together in a single solution. The ideal BPM system needs to be intuitive, all encompassing and available to companies of all shapes and sizes. Let's take a look at each area and see where we stand today.
For BPM to be adopted and used at both the smallest companies and across the farthest reaches of the largest enterprises, a number of factors needs to be in place. For one, the BPM project has to fit into a reasonable budget range. A look at the prices of the leading solutions today quickly tells you why small companies have minor BPM initiatives at best and the large companies are still not making BPM available to all employees who could add value by taking advantage of a BPM system. Because better decision-making (one of the key benefits of BPM) cannot be quantified, making the business case for a full-scale BPM solution is difficult. Change is in the air, however. As vendors continue to fill in the holes in their BPM product lines, the offerings from each vendor are converging. Although the approach of the various vendors can be different, the end applications they offer to the market have come to be very similar. If the vendors can no longer compete on unique functionality, there will be more pressure for competitive pricing. In addition, the open source movement has gained a toehold in BPM with the recent introduction of open source-based solutions from Adaptive Planning, available free of charge in the basic form.
The other key aspect needed to speed greater distribution of BPM is easier (which also means cheaper) installation. Small to midsized companies usually don't have the IT staff required to focus enough resources on a project of this magnitude. An ideal solution would have a hosted version as an option or be available as an appliance. While there are some business intelligence (BI) vendors offering an appliance approach, there are few, if any, BPM application vendors yet doing so. However, there is a growing number of application vendors offering a hosted alternative. These include the previously mentioned Adaptive Planning as well as Host Analytics and ActiveStrategy. There are even some third parties offering hosted versions of the mainstream BPM products, such as Hyperion. These solutions vary widely in the breadth of BPM they address. In addition, the per-user/per-time-period pricing may appear attractive at first, but the recurring costs can add up compared to pricing of software under an old-fashioned licensing model. You need to plot where those cost lines intersect and compare the benefits received through the various pricing models to make the decision that is best for your company.
Easy to Use
Once you get past the price and installation mechanics, the next area essential to widespread adoption is ease of use. The ideal product should require minimal training. It should not require you to change the way you do business. There are several ways to get there. The direction of most vendors today utilizes the office productivity tools that people are already familiar with as a front-end user interface. This is a good approach and will gain more momentum when Microsoft introduces its PerformancePoint server built around its Office productivity suite. Another important feature for ease of use is a workflow-based menu system. Unfortunately, many products still offer a list of modules or technical functions to choose from in their menus (e.g., start extract, transform and load now). The best solutions have task-based menus (e.g., begin annual budgeting process) that flow from task to task based on the way business truly operates. OutlookSoft was one of the first to offer this approach. Others are now following suit.
The best way to offer solutions that are intuitive and follow the way particular businesses work is to package vertical solutions. These industry-specific applications cut the learning curve significantly by using the language and workflows already well understood by the target users. There is also a side benefit of reduced implementation time and cost. BPM vendors leading the way in vertical offerings include Cartesis, SAS, Oracle and Business Objects. The financial services industry is the one most often addressed by vendors offering vertical solutions. One cautionary note: some vendors provide superficial verticalization through custom brochures, templates and sales demos. It is important to make sure that there is specific functionality baked into the product offering itself that is customized for your industry.
Breadth of Functionality
Some vendors focus on just one slice of BPM, such as dashboards. The cost in time and dollars to integrate these offerings with other aspects of BPM from other vendors should not be underestimated. Therefore, the ideal solution would do it all. For starters, having BPM applications combined with BI tools gives you the best of both worlds - robust applications with built-in domain expertise so you don't have to re-invent the wheel and compatible toolsets to customize and expand what the packages cannot do out of the box. The vendors with combined BI/BPM offerings today include Cognos, Hyperion, Business Objects, SAS and Applix. Based on where they started historically, they are typically stronger in either the application or tools. To truly do it all, a BPM product or suite needs to address budgeting, planning and forecasting, consolidation and reporting, scorecards and dashboards, and operational analytics. Many of the vendors listed in my July 2006 DM Review column provide all or most of the required functionality. One still-underdeveloped area is operational analytics. Most of the vendors that offer operational analytics are only providing the raw capability; it is not yet fully fleshed out. Because this is one of the highest-ranked growth areas in our annual BPM Pulse survey (results are available at www.bpmpartners.com), I would expect it to begin to get more attention from the key BPM vendors. Today, most innovations in operational analytics are coming from smaller, newer companies that have the necessary domain expertise in areas such as sales and service performance management. Some mainstream BPM vendors, such as Applix, are partnering with these companies (such as Varicent, in the sales performance management area) to put some meat on their own operational analytics framework.
Are We There Yet?
Much progress has been made since the early days of BPM. It is possible to find most of the elements of the ideal BPM solution, but not in one place. Some areas, such as pricing, have a way to go for BPM to become truly ubiquitous. Should you wait for the ideal solution to come along? Probably not. Delaying the benefits of BPM is too costly a penalty. With the appropriate knowledge and guidance, you can put together a very good solution today. The majority of companies in the BPM Pulse survey and, I believe, in the world at large are moving forward with BPM. You certainly don't want to get left behind. If you go with one of the top 10 vendors, it is highly likely they will continue to evolve their offerings in the direction described here. You'll get the immediate benefits of BPM today, and a few years down the road, you just might be the proud owner of the ideal solution.
Craig Schiff is CEO of BPM Partners. Schiff may be reached at email@example.com or (203) 359-5677.
This article originally appeared in DM Review.
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