A business performance management (BPM) solution is a sophisticated analytical application that supports well-defined management processes. BPM software can bring great rewards to its implementers. But it doesn't always.

While many companies are successful in implementing BPM capabilities, many others struggle with implementations that don't deliver the expected value or else fail altogether. Our firm has its roots in crisis management. We work with clients to solve complex problems where there is a high degree of urgency or a high risk of failure. For this reason, we see a disproportionate share of very complex, troubled, or failed performance management software implementations, and we are often asked to help put these initiatives back on track so that they provide the benefits the company was expecting.

There are three basic facts about BPM software that companies often lose sight of as they move through the purchase and implementation process. First and foremost, performance management software is not transactional in nature. Its purpose is to take the transactional data and transform it into meaningful, usable information. Second, implementation of a BPM solution should be driven predominantly by the people who will use the software day-to-day. IT should be an enabler to a BPM solution, not the driver. And third, a BPM solution has the potential to produce a paradigm shift in decision-making. It combines enhanced processes with analytical capabilities to enable far better decision-making. When executed and managed well, BPM software can drive a step change in decision-making processes and results.

If BPM solutions offer such great benefits, why do companies struggle to implement them? For too many organizations, performance management best practices are the Holy Grail they can never reach. For some, failure results from a lack of clear vision for the BPM solution, or lack of a clear strategy for how to achieve that vision. For others, poor project management and change management lead to subpar results. And still others fail because they don't understand the functional requirements and/or the functionality they are buying in a BPM package, or they inaccurately assess their company's resources and assets before starting implementation. Without a clear path forward, strong project management, active change management, and deep end-user involvement in the purchase and implementation processes, BPM solutions are at great risk of failing to meet expectations.

Lack of a Vision and a Strategy

A company that lacks strategy and vision for its BPM solution is destined to see little benefit from it. Defining a path forward and identifying the major milestones, along with correlating benefits, are crucial for ensuring that everyone stays on the right track. Without a vision of success, many projects wander aimlessly in search of a purpose. There is an old Chinese saying that encapsulates the issue well: “Strategy without tactics is the slowest route to victory. Tactics without strategy is the noise before defeat.” The most important result of setting a clear performance management strategy is the alignment of expectations about the transformation that will occur, the impact to the business, and the resources required to achieve the transformation. Processes, organizational structure, and data structures (e.g., charts of accounts) all have the potential to be changed by a full-fledged performance management initiative.

We were recently engaged to help a client navigate a course out of the desert for a failed BPM implementation. The root cause of this failure was the company's lack of a defined and agreed-upon strategy for the project. The people involved did not know the overall plan or see how their pieces fit into it. Executives had purchased software, but they had not invested any resources in defining the company's vision for the initiative or in developing a strategy, with milestones linked to key achievements toward the strategy's goals. The company's senior managers failed themselves by ignoring the need for clear direction. Because of the lack of a comprehensive strategy, the consultants and employees involved in putting the software in place ignored the need for process changes and missed opportunities to take advantage of functionality within the software that would have bolstered the value of the initiative. When we stepped in, this company had more than 15 people working on the implementation without direction, in an unorganized, uncoordinated manner. After five-plus months of activity, the project had delivered zero results.