Analysts and vendors assume that the market for business performance management will continue to grow for many years to come. After all, they argue, demand for software and services that streamline core processes is bound to rise until everyone has realized their benefits. That position makes sense, but the reality is that without the sales stimulus of compliance needs, the performance management market would be nowhere near the 11 percent increase that Gartner projected for it last year. Slackening demand for Sarbanes-Oxley solutions won't help, but the market's main threats -- and opportunities -- arise from the big question: Where does BPM go from here?

A year ago, that question was utterly unanswerable because BPM hadn't even been adequately defined. Every vendor had its own definition of performance management and used unique terminology to reference it. But last year, BPM Partners, a vendor-neutral performance management consulting firm, spearheaded the formation of the BPM Standards Group, a consortium of vendors, consultants, and analysts who are working together to develop definitions and standards for this young market. In this issue, John Colbert, vice president of BPM Partners, describes the considerable progress the group has made to help practitioners understand BPM and the components that support it.

One variable determining whether the performance management market will be able to sustain its current growth rate is practitioners' level of success moving BPM beyond tasks like budgeting to encompass core operational processes. As Jonathan Becher, CEO and president of Pilot Software, notes in his article, eliminating the gap between strategy and execution is the Achilles' heel of organizations today. Operational alignment should be the goal of every BPM initiative, but obstacles block the way for many companies. Just consider the collective experience of the attendees of last October's BPM Summit, whose remarks we've excerpted for this issue. It's not easy to align all of an organization's stakeholders when everyone has different needs, the data is difficult to pull together, and budgets are perpetually tight.

When BPM projects fail, technology is the easy scapegoat, but process improvements must always come first. As Mike Morini, president of OutlookSoft, posits in this issue, even when companies' technology platform is Microsoft Excel -- which is much maligned in BPM circles -- problems with data accuracy and versioning can be traced back to faulty processes. In fact, Morini argues, Excel offers companies a range of benefits, so pairing a spreadsheet interface with the right BPM back end can be an effective performance management solution for even the largest organizations. Systems that leverage Excel bring additional benefits for midmarket companies. In his article, Robert Hull, CEO of Adaptive Planning, notes that a variety of new systems provide affordable and easy-to-use alternatives for midsize organizations wanting to capitalize on the benefits of performance management.

Although work to define standards and isolate best practices for companies of all sizes is ongoing, BPM methodologies that deliver results are experiencing a renaissance of sorts. Foremost among these, activity-based costing (ABC) is "in" again. In this issue, Richard Barrett, vice president of global marketing with ALG Software, describes the latest variations in ABC methodologies and how they apply to diverse organizations.

Where BPM goes from here is up to all of us -- practitioners, vendors, and consultants alike -- because making BPM work by delivering quantifiable value to organizations (regardless of size or type) is the best way to ensure the market's long-term viability.

David Blansfield is editorial director and publisher of Business Performance Management and chair of the BPM Summit. You can reach him at dblansfield@penton.com.