A View from the Non-Vendor Experts

At BPM Partners, we have noted that clients are shifting from an approach that addresses the budgeting, planning, and forecasting process with one system to one that breaks down each of these components into individual business processes that might benefit from best-in-class solutions that address the unique attributes of each. Budgeting is a specific closed-loop process that requires a solution that's user-friendly for infrequent users yet comprehensive enough to be able to collect granular data and roll it up into a summary data structure. Planning involves documenting a scenario and then being able to run "what-if" scenarios and models with sufficient sophistication to address changing market dynamics. Forecasting involves taking an established budget, compiling actual performance data and comparing this to the plan, and then enabling various analyses that help to provide a range of possible outcomes and a degree of certainty associated with a certain performance level.

Significant administrative and user benefits can be gained by supporting these three processes through a single system. But if there are unique best-in-class capabilities that will better support your business modeling (for example, your strategic planning process), you shouldn't remove them from your prioritized requirements list as part of the vendor selection process.

The economy is also impacting the way decision-makers approach their plans for deployment. "Today's focus is on proving value where it matters most -- better revenue and cost forecasting and streamlining both financial and operational management," reports Trevor Walker, managing partner of Perfiniti, a collaborative business intelligence and performance management consultancy. "In working with our existing customers and prospective new customers, we are seeing buying cycles taking longer, and projects tend to start smaller. Customers are looking to us to help prove quick time-to-value from a core starting point and then add on to this core with other projects. This means that in some cases we are partnering to break projects into phases so that they better fit with priorities and budgets."

But in these difficult times, it is even more important to keep an eye on the big picture. "The current economy makes it more urgent than ever that a company runs efficiently; maximizes opportunities, plans, and forecasts accurately; and manages its costs," says David Den Boer, founder of Column 5 Consulting. "Performance management systems allow companies to shine a light on all corners of their business to see where costs come from and where opportunities may lie. By better understanding their business, management can prioritize and make better decisions. For example, in a down economy it may be necessary to make cuts, but making cuts in the wrong places can cause you to lose market share and weaken your chances of recovery when the market improves. Having a clear view of your company's business drivers can save you from making shortsighted decisions."

Prepare to Hoist Full Sail

While many companies are focused on identifying the bottom of the downturn, forward-thinking organizations are looking for the silver lining in the storm clouds. With stricter attention to performance improvement, well-informed management can use this opportunity to trim less profitable and less strategic parts of their operations, sharpen their focus, and put systems in place that will provide competitive advantage going forward. Everybody's trying to do more with less, and establishing a vision and developing a road map to accomplish it is a very appropriate step in any corporate realignment.

At the end of his journey, Captain Jack Aubrey succeeded in tracking down his foe, and he and his crew were much richer for the experience. I'm confident that organizations that take the correct steps today -- establishing cost controls to meet short-term constraints, yet finding incremental ways to improve their performance management systems -- will be best positioned to accelerate out of this economic squall and set full sail to the upturn.