FSN: BI and BPM on the move?

BI and BPM on the move?

23rd April 2007
The Business Intelligence and Business Performance Management marketplaces are in a state of flux again, fuelled by frenzied acquisition activity and advances in technology. The result is that the market is bifurcating into “platform players” that have a broad spectrum of technology at their fingertips and the “platform independent vendors” that can align themselves with a variety of other systems architectures. Furthermore, a pre-occupation with enterprise level solutions is creating a vacuum in the mid-market which is waiting to be filled. Gary Simon, FSN's managing editor explains some of the dynamics currently shaping this growth market.

For some years the Business Intelligence (BI) and Business Performance Management markets have been coalescing. As a result there are a number of broadly based solutions available which are concerned with planning, monitoring, analysing and reporting performance. Precisely where business intelligence ends and performance management starts is a matter of debate, however the blurring of the boundaries is irrefutable.

But the amalgamation of the companies and technologies is in danger of leaving end users thoroughly confused. For the hard pressed accountant it is hardly important whether the dashboard, report, Excel ‘add-in' or any other analysis tool is part of a business intelligence product or a performance management suite. Indeed, many of the delegates that FSN spoke to at a recent Infor event confirmed the view that most finance professionals do not know the difference between corporate performance management (CPM), business performance management (BPM) and enterprise performance management (EPM).

As a matter of fact the terminology is unimportant. What remains important is that businesses have access to a comprehensive suite of applications that share common data, especially metadata, which, defines for example, organisational hierarchies, product and customer hierarchies. It is this common layer that eliminates duplication of data and ensures a shared understanding of business information between different users and functional areas.

Delivering this ideal is somewhat more challenging because software vendors have come at the problem from different directions. For example, Hyperion's notable strengths have been in financially oriented performance management applications though they did acquire Brio software, a traditional business intelligence vendor. On the other hand, Business Objects, another sizable player in Business Intelligence acquired SRC a provider of budgeting software and more recently ALG whose roots are in Activity Based Costing and Management. Having a foot in both camps presents challenges for the marketing community. Cognos has neatly side-stepped the issue by describing itself as a Business Intelligence and Performance Management vendor but other vendors try to promote the middle way, describing themselves as providers of analytics of some shape or form.

A company's heritage is seen as crucial to delivering a common data model. ‘Platform Players', such as SAS, Oracle and Microsoft can point to a compelling array of technology underneath the bonnet of their performance management /business intelligence applications. In addition to these applications they sell data management tools, ETL tools, relational and OLAP databases. Convincingly they argue that this capability allows them to provide superior integration and support for core financial processes such as budgeting, planning, forecasting and reporting. Furthermore, they argue that their data management tools allow them to harness a wide range of additional data sources which is increasingly important in a world obsessed with measuring and reporting anything that moves.

On the other hand the Platform Independent vendors in this space, such as Infor, Business Objects, Clarity Systems, Cartesis, Cognos and Hyperion (ignoring the implications of the very recent Oracle acquisition) can validly claim integration possibilities with more or less any vendor's technology.

Which approach is ‘better' depends on your viewpoint. Some would argue that ERP vendors have amply illustrated the danger of having all your ‘eggs in one basket' whilst others feel more secure dealing with just one vendor. Infor's head of Strategic Solutions Group, Jim Handy told FSN that his customers have the choice. After a string of acquisitions, the Infor group is busily stitching its product portfolio together allowing customers to pick from a range of best of breed solutions and hybridised solutions based on say Infor MPC and their chosen ERP system. Cognos and Business Objects similarly sit astride a range of different technologies and applications.

Oracle's recently completed acquisition of Hyperion has further muddied the water since ERP vendors are not generally noted for their success in performance management. Whether they ultimately deliver a better user experience remains to be seen.

Unfortunately, a number of vendors have been a victim of their own success. In assembling a comprehensive array of performance management and business intelligence applications they have introduced an unacceptable level of complexity. ‘Shelf ware', i.e. software which is purchased and never used is commonplace although failure is often associated with poor project management and inadequate sponsorship as well.

Recognising the distinct needs of the mid-market new vendors are emerging with pre-packaged applications that are already configured to be used with popular mid-market ERP packages. In the last two months FSN has seen two sophisticated Excel add-in packages that provide a much easier entry into performance management for mid-market companies with limited skilled resources. If successful, it is just possible that these simpler offerings could make inroads into larger companies as well. Perhaps in response to the competitive threat, companies such as Cognos are releasing their own supped up Excel add-ins.

In an effort to broaden the appeal of their products and simplify their appearance many of the enterprise level vendors are introducing vertical market applications, i.e. tailored for a particular industry segment, whilst others are introducing modules aimed at specific functional areas, such as HR or Planning. Clarity Systems has introduced HR Planning, Hyperion released CAPEX planning modules and Infor has released retail analytics. Boxing up domain expertise in a product appears to be gaining traction and is self perpetuating. For example, the more a supplier can demonstrate expertise in a particular market segment the more customers it wins in the segment and therefore the more expertise it gains for the next project.

So BI and performance management are definitely on the move again. The language is still evolving and the market is dividing between platform players and the rest. But complexity is still acting as a brake on progress. Simpler products entering the mid-market and vertical market applications may be showing the way forward.

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