Business Performance Management

Last week, Whitebirch Software announced version 7.5 of its flagship product, Whitebirch Planning. The latest release of this OLAP-style reporting and analysis tool offers user-directed scenario planning and better flexibility in report design. Reports can include any number of data elements, in any arrangement, through a drag-and-drop interface. In addition, they can be updated instantaneously so that executives can handily evaluate the impact that changes in the external environment would have on their performance indicators.

Everyone who was shopping for business performance management (BPM) software — or on the BPM Express subscriber list — last year knows that the market experienced a dramatic, fundamental shift as large ERP vendors purchased the biggest players in performance management. That was the big news in 2007.

This year, the vendors involved in this earth-shaking M&A have been working furiously on integration, while the smaller suppliers of this software have been working furiously on distinguishing themselves. Meanwhile, the question remains: Where will performance management software buyers come out as the vendors race to gain competitive positioning? And when vendors spend their energy sniping at one another, will buyers feel their BPM initiatives are getting caught in the crossfire? Answering these questions may be the big news story of 2008.

The vendor making the most noise this month is Oracle, which released a new performance management suite that integrates former Hyperion BPM products with Oracle Fusion Middleware and the Oracle E-Business Suite. The Product Briefs section provides more information about the functionality of the Oracle Enterprise Performance Management System and the related release of a Hyperion Profitability and Cost Management application.

Not too surprisingly, Oracle calls its new EPM System “the industry’s most comprehensive, fully integrated suite of EPM solutions.” Even less surprisingly, SAP/Business Objects disagrees with that assessment. Sanjay Poonen, the executive vice president and general manager of performance optimization applications for Business Objects, responded to the Oracle release by stating, “Oracle is playing catch up to us on our vision about the importance of combined EPM, GRC [governance, risk, and compliance], and BI. Business Objects is the only vendor today that offers a complete vision and solution portfolio which unifies EPM, GRC, and BI.”

Such language is understandable; after all, these vendors are trying to establish new, joint brands in a market currently marked by confusion. But this kind of marketing noise only adds to that confusion, which means it’s counterproductive for many organizations that these vendors want to woo. It’s not that Oracle and SAP shouldn’t be working to integrate the products that they spent a pretty penny to own. It’s in everyone’s interest for BPM systems to run as efficiently, and to be as easy to install, as possible. But in my experience, there are an awful lot of companies that still stand to reap big benefits from the most basic BPM functionality.

I recently spoke with two organizations that exemplify this point. Both have implemented performance management software in the past two years, and both are pleased with the results. One is a relative newcomer to the insurance industry that, until very recently, used only Excel for financial planning and reporting activities. The company is in the process of implementing a system that will function as a back-end data storage engine for its BPM processes, while retaining an Excel-like front end. By implementing a more efficient, streamlined BPM system, the company has reduced the number of individually stored formulas it uses for performance management-related calculations from 840,000 to 754. The numbers are dramatic, but the explanation is simple. The BPM product this company selected stores formulas in a central repository, so a formula does not have to be re-entered in a new spreadsheet cell every time it is used in a new calculation.” This product may not offer all the bells and whistles of Hyperion/Oracle or Business Objects/SAP — but think how many more mistakes the company would be likely to make in its forecasting, planning, and reporting processes if individuals were entering 840,000 formulas versus 754!

Another company I talked with in the past month has implemented software from a different, but also small, BPM vendor. This organization is in the food-production business, and it’s currently facing a rapidly changing financial landscape. Like the insurer, it recently shifted its financial planning and management reporting processes away from Excel to escape some specific pain points of a cumbersome spreadsheet-based process. This food producer went with a smaller vendor in large part because of the urgency with which it needed to replace Excel. Its vice president of finance told me, point blank, “I will probably get into some preconceived notions here, but it seems to me that the bells and whistles of a lot of the more established budgeting packages add complexity in terms of time to implement and in terms of users being able to pick them up and go.”

For companies running ERP systems from Oracle or SAP, the integration of BPM and transaction data is likely to be a key selling point. And for large organizations running many different ERP systems, data integration is absolutely essential if a performance management software implementation is to have any hope of success. Nevertheless, innumerable organizations are still handling budgeting, reporting, and related processes in Excel spreadsheets. As sniping among Oracle, SAP, and others introduces even more confusion into the market, some prospective customers may decide to postpone purchase decisions until the big guys sort themselves out. And that would be a shame. For many businesses, particularly midsize and smaller organizations, implementing something today may offer big benefits. How much a particular organization could benefit from performance management software depends on a variety of factors, but the confusing marketing noise coming out of the big guys should not muddy that basic analysis.

Host Analytics, which offers a software-as-a-service (SaaS) model for its BPM suite, announced some major corporate changes this month. The company appointed a new CEO, Jon Kondo, who comes to Host from senior positions in the performance management division of Oracle and, before that, the BI division of Hyperion. Host’s founder, Jim Eberlin, will become the company’s vice president of business development. These changes follow a round of financing, in which Advanced Technology Ventures and Trident Capital invested in the BPM vendor. Said Eberlin on the event of the announcement, “We started the company to make corporate performance management flexible, feasible, and approachable to both midmarket and large enterprise companies. … That this high level of experienced industry talent was anxious to join us speaks well to the product, our customers, and the incredible market opportunity for SaaS-based CPM solutions.”

As “Web 2.0” becomes the hottest buzzword in BPM, and as the importance of adding collaboration capabilities to planning software gains prominence (at least among vendors), a new study by Aberdeen Group lends support to the buzz. Aberdeen surveyed 270 organizations worldwide about their workforce collaboration practices — or lack thereof.

First, the survey asked respondents to define “workforce collaboration.” Two common themes emerged in the definitions Aberdeen collected: connecting employees with others across the company who are working toward similar goals and developing a means for capturing employee knowledge and distributing it to others for whom it can be useful.

After defining workforce collaboration, Aberdeen examined respondents’ activities in this area and determined whether each organization is “best in class.” A closer look at the companies classified as tops in collaboration reveals some stunning results. Best-in-class companies, this study found, reduce the time to completion of their average project by 34 percent. They improve employees’ time to productivity by 19 percent. And they reduce their training cost per employee by 14 percent, on average.

How do they achieve these benefits? Among other forces driving their workforce collaboration, 78 percent require employees to attend training on the company’s workforce collaboration software tools, and 69 percent encourage workers to submit information to a knowledge base where it will be accessible to others across the company.

SAP-owned Business Objects released two products of its own last week; both target the midmarket. BusinessObjects Edge 3.0 is an update to the company’s midmarket data analysis and visualization tool. Among other improvements, this version offers offline analysis capabilities, then synchs with the corporate database when the analyst next connects to the server. It highlights the elements of a report that change when a user refreshes data. And it enables users to seamlessly import data from Excel, CSV, and text files into Edge reports. Business Objects also released Crystal Reports Server 2008, an update to Crystal Reports Server XI Release 2 that separates Crystal Reports Server from Business Objects’ report design tool, which is now sold separately as Crystal Reports 2008.

SAS has released a product called SAS Visual Data Discovery to “deliver insights via rich, interactive analytics visualizations that far surpass the limited graphics available elsewhere.” The dynamic graphics capabilities enable users to view data in 3-D scatterplots, graph matrices, needle plots, and summary charts. In addition, SAS Visual Data Discovery offers animated bubble plots that provide data “movies.”

On July 1, Centage released a new version of Budget Maestro. Version 5.9 can run on Windows Vista — and take advantage of Vista’s enhanced security features — as well as SQL Server 2005, which can provide a boost in the application’s performance in large installations. In addition, Centage released the Budget Maestro Dashboard Kit 2.0, which offers out-of-the-box graphical reports in areas such as income statement data by product line, periodic sales reports, and cash flow KPIs.

Also on July 1, German software vendor Jedox announced the release of Palo 2.5, a new version of the company’s flagship application, which functions as a server for data accessed through Microsoft Excel spreadsheets. In a spreadsheet that connects to Jedox on the back end, formatting and layout features are the same as in standard Excel, but data is pulled into the spreadsheet from a database and changes are written to the database. Version 2.5 improves on former versions through optimizations that enhance the product’s speed and by more advanced analysis made available through spreadsheet functions.

Tableau 4.0 is now available from Tableau Software. The latest release includes upgrades to both the desktop and the server components of this data-visualization product. Version 4.0 joins data analysis with mapping; it also adds new capabilities to incorporate visual cues such as logos and custom images into visual representations using Tableau’s simple drag-and-drop interface.

Panorama has released version 5.5 of NovaView. Among other enhancements, this release offers tight integration with Google Docs and Google Apps; the capability to combine company data with public data; the ability to share full, interactive reports for real-time collaboration; and a “hybrid” on-premises/software-as-a-service (SaaS) architecture that facilitates collaboration between users inside the corporate firewall and those outside it.