As the market matures, core functionality within Business Performance Management (BPM) products has become somewhat standardized. Most products look very much alike while offering similar feature sets. Of course, if you look into the details (as you should), you will find that the products address BPM requirements very differently. Still, on a first pass review of vendors; the typical client may have difficulty telling the products apart. Because of this, vendors are now trying to anticipate future prospect requirements, and be the first to offer new features to address those requirements. Thus, they will be able to differentiate themselves and stand out from the pack. If a particular vendor is not first with a new feature, they must consider adding it to remain competitive in their market. Let’s take a look at some of the new functionality being offered by some of the most innovative BPM vendors.
Metadata Management
Also known as Master Data Management or Enterprise Dimension Management, this is an area that pure play IT vendors and IT consultants have been focused on. Now some BPM vendors are developing, acquiring or partnering for Master Data Management, and bundling it with their solutions. The primary purpose of metadata management for BPM is to synchronize the underlying business structures (chart of accounts, organizational hierarchy, data categories, etc.) across several products or modules. While some vendors might point out that they already offer a unified solution (meaning a single database in this case) and don’t need Master Data Management, they miss the point. Master Data Management is about synchronizing these structures across the BPM suite, as well as other third-party products that will need to interface with it.
Driver-Based Planning
Modeling has become an integral part of the budgeting and planning process. The core of modeling is the process of defining the interrelationships that exist between the data and key variables, which are both internally and externally driven. Once these models have been developed, they can be re-used with minor tweaking every year. By employing these models, the time it takes to budget (or re-budget) is greatly reduced. Some of the BPM vendors offer pre-built infrastructure to support and simplify this process. One version lets you define your standard budget. Based on your models and global variable settings, it will then generate a best-case and worst-case version. Some vendors, however, will say that they’ve always had this feature. What they mean is, much like Excel itself, you can build anything you need in our spreadsheet-like product.
Workforce Planning
With budgeting and planning being the most highly focused area of business performance management by prospects, it is also the area most focused on by vendors for differentiation. Much like driver-based planning, most products allow you to do workforce planning. What’s new is that workforce planning functionality is now pre-built into the applications out of the box. Several vendors offer fairly complete templates that guide a user through the salary planning process. Others provide entire modules focused on this capability for an additional fee. This is clearly an important area, since most of a field manager’s budgeting time is spent around salary planning. After delivering this functionality, most vendors are looking at additional built-in support for capital expenditure planning.
Predictive Analytics
An area that has traditionally been the focus of pure statistical packages is now being brought into the BPM business realm by several vendors. Predictive analytics, which is able to accurately gauge the future impact of decisions made today, could be the holy grail of business performance management. There is a problem regarding it. Although the new functionality discussed in this article is well understood, predictive analytics is not. The definition of what predictive analytics is, what the required inputs are, what mathematics must be employed and what it can actually do for you are yet to be agreed upon. This is an exciting area. At the same time, predictive analytics must be further developed and proven before it becomes widely accepted.
Verticalization
This is an up-and-coming trend. Prospective users want to find products that already know and understand their business, or at least their industry. Verticalization will obviously reduce the learning curve and the implementation time. It will reduce the risks associated with building something new as well. For example, dashboards are an area that can specifically benefit from verticalized offerings. Imagine being able to start with key performance indicators that are fairly standard across companies in your industry. In fact, some vendors offer packaged templates, modules, or additional functionality for particular industries. This is particularly true for financial services. They layer this on top of their generic cross-industry product set, so they don’t limit their market to only one industry. By now we would have expected more vendors to do this, but they haven’t.
No matter how you look at it, the highly competitive nature of the BPM market benefits the prospective customer. Vendors are rushing to flesh out their suites, and then offer the latest functionality to jump ahead of the competition, if only for a moment. The BPM vendor community is entering a period of innovation and new development, which promises to address even the most complex user requirements with out-of-the-box functionality. The client’s key challenge is to determine which capabilities are required for their business and which vendors offer the most robust versions of that functionality.
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