BPM Pulse 2010 Results and Analysis, Part 1

Originally published April 13, 2010

Over 500 companies took part in BPM Partners’ annual business performance management (BPM) survey. Half the respondents came from companies we categorize as small (less than 1,000 employees), while the rest came from mid-sized to large enterprises. Companies were distributed across almost all industries with the largest concentrations in manufacturing and financial services. Just over 70% of the respondents worked for a US-headquartered company. The finance department was home to 50% of the respondents with executive management and IT being the next two largest groups.

Who's Doing Performance Management?

With the demographics out of the way, let's take a look at the results. The first question that we want to answer is: How many companies are actually involved in business performance management (BPM) projects today?

The Pulse results show that 41% of the companies responding to the survey are in the midst of a BPM project. Only a small group (around 8%) has completed their BPM projects. The reason this number is so low is that most companies have multi-year performance management road maps that encompass budgeting, consolidation, reporting, dashboards, and operational analytics. It will take years for organizations to complete all of those phases, but they most likely have started to enjoy the benefits of the aspects of business performance management that have already been implemented. Overall, 28% of companies have no current BPM plans. The remainder who do not have in-progress or completed projects are in the planning stages for BPM.

When we look at this data in terms of the demographics, it becomes clear which market segment is most focused on BPM today. In the medium-sized company category (1,001-2,500 employees), 54% are currently involved in a BPM project. This is followed by 46% in the large category (2,501-5,000 employees). Right behind are the large enterprises (more than 5,000 employees) with 45%. As you might expect, the segment with the fewest in-progress projects is the small category (less than 1,000 employees) with just 34%. They also have the largest group without BPM plans (35%). This data is also borne out by BPM Partners’ field work. Most companies that have engaged us this year to address their performance management needs fall into the medium to large category. As a side note, BPM activity in general (as measured by new projects) is way up from a year ago.

Which Aspects of BPM?

So now that we know who is doing business performance management, what are they doing with it? To answer this, we need to know which performance management components have their attention.

As it has done every year since we started the Pulse, budgeting/forecasting leads the pack with 60% of respondents saying this is one of the areas they are addressing. It always amazes me to see how many companies are still in the process of transitioning from spreadsheet budgeting to a more established enterprise-grade system. The number two most popular BPM component varies from last year. This year, with 46% of the vote (respondents can select multiple components), the winner is ... financial reporting. Are you kidding me? Business intelligence (BI) and BPM companies have been offering solutions in this area for years. It is hard to believe, but this is still an area where many companies struggle. When analyzing these results based on respondent background (finance, IT), there is some good news. IT and finance are pretty much in sync up and down the line on the priority of each focus area. This was not always the case in prior years. The one exception is the area of profitability analytics. It was the 5th most important area for finance professionals, but it placed a distant 8th out of 8 choices for the IT respondents.

Project Drivers

Now that we know who is doing what, let's take a look at why.

When asked to select the primary drivers of their BPM initiative an overwhelming 83% chose “improve management reporting.” The second most popular choice was “need for enhanced planning – more frequent, more agile” with 60% (again, multiple selections were permitted). These two choices are fairly consistent with the focus areas cited above. Close behind at 54% was "improve operational analytics." I think this is a leading indicator of what's next for business performance management. Once companies address their corporate pains – budgeting, consolidation, and reporting – they begin to look outward and see the need to better understand what is going on in each of their operating units. This is still an area of BPM where there are more tools than applications, but that is changing. It presents an opportunity for both consulting companies and software vendors to help meet this growing need.

In future articles in this series, we will look at spending patterns, vendor preferences, vendor satisfaction, feature, function, technology priorities, project phase duration, and overall business performance management success rates. A white paper containing summary highlights of the BPM Pulse 2010 data will be available shortly. You can reserve your copy here: http://www.bpmpartners.com/bpmcentral_whitepapers.shtml.

SOURCE: BPM Pulse 2010 Results and Analysis, Part 1

  • Craig SchiffCraig Schiff

    Craig, President and CEO of BPM Partners, is a pioneer in business performance management (BPM). Craig helped create and define the field as it evolved from business intelligence and analytic applications into BPM. He has worked with BPM and related technologies for more than 20 years, first as a founding member at IMRS/Hyperion Software (now Hyperion Solutions) and later cofounded OutlookSoft where he was President and CEO.

    Craig is a frequent author on BPM topics and monthly columnist for the BeyeNETWORK. He has led several jointly produced webcasts with Business Finance Magazine including "Beyond the Hype: The Truth about BPM Vendors," the three-part vendor review entitled "BPM Xpo" and "BPM 101: Navigating the Treacherous Waters of Business Performance Management." He is a recipient of the prestigious Ernst & Young Entrepreneur of the Year award. BPM Partners is a vendor-independent professional services firm focused exclusively on BPM, providing expertise that helps companies successfully evaluate and deploy BPM systems. Craig can be reached at cschiff@bpmpartners.com.

    Editor's Note: More articles and resources are available in Craig's BeyeNETWORK Expert Channel. Be sure to visit today!



 

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