Is BPM Performing? Surveys Highlight the Markets Needs
Sixty-seven percent of survey respondents who are extremely satisfied with their BPM vendor's service are also extremely satisfied with the product's ease of use, while none of the respondents who are extremely satisfied or even somewhat satisfied with customer service is dissatisfied with the product's ease of use. At the same time, no users who are dissatisfied with their vendor's service are extremely satisfied on ease of use, and 83 percent of those who are dissatisfied with customer service are either dissatisfied or somewhat dissatisfied with the product's ease of use.
Article Tools
Resource Center
Access white papers, product demos, and presentations from companies whose reputations have been built on helping BPM practitioners get the most from initiatives.
- BPM 101: Selecting a Business Performance Management Vendor" -- new white paper from BPM Partners
- "The Finance Challenge of Aligning the Business With Strategic Goals," a podcast featuring Palladium Group's Phillip Peck
- Ventana Research white paper "Decision-Making and Performance: Improving Essential Business Analytics and Technologies"
- “XBRL at a Glance,” white paper from XBRL US
advertisement
Likewise, 89 percent of people who are extremely satisfied with their vendor's customer service are either extremely satisfied or somewhat satisfied with the cost of implementing and maintaining their BPM product. Ninety-four percent of people who are dissatisfied with their BPM vendor's service are either dissatisfied or somewhat dissatisfied with the product's cost.
Even more telling, among respondents who are extremely satisfied with their business performance management software provider's customer service, 82 percent believe the product will meet their future budgeting, planning, and reporting needs. But among those who are dissatisfied with the vendor's customer service, only 11 percent believe the software will meet their future needs (see exhibit 4, below). Vendors that have been narrowly focused on product differentiation need to put more resources into customer service to ensure long-term success.
They should also make a stronger case for why organizations need BPM and specify ways in which they can benefit from it. The BPM Pulse Survey indicates that the most common reason companies today are implementing performance management software is to replace the aging systems they already have in place. This reason was cited by 49 percent of respondents to that survey, whereas only 36 percent said they are using the product's projected returns as a justification for their investment. Buying software simply for the purpose of updating poor-performing legacy systems is a recipe for dissatisfaction.
The BPM Pulse Survey also suggests that the vendor selection process takes more than three months for 69 percent of purchasers and more than six months for 17 percent. A sharper focus on ROI could simultaneously enhance the long-term satisfaction of buyers and lay a solid foundation for a more efficient, less overwhelming vendor selection process.
Another factor that correlates closely with BPM satisfaction is the consolidation of budgeting, planning, and reporting into a single system. According to the BPM Pulse Survey, 56 percent of BPM buyers purchase budgeting functionality, 47 percent buy analytics, 38 percent acquire a dashboard, and 20 percent buy financial consolidation tools. But only 26 percent buy a full suite that includes all of these capabilities (see exhibit 5, below).
The Solutions Satisfaction Survey raises a red flag on the practice of piecing together an assortment of different BPM products. The fewer performance management-related systems an organization runs, the happier its users are. More than half of respondents are running only one budgeting/planning/reporting application. Among these users, 52 percent are either extremely satisfied or somewhat satisfied with their software's ease of use, compared with 32 percent of those who run four or more systems and only 20 percent of those with three systems. And 58 percent of single-system respondents are extremely or somewhat satisfied with their system's functionality, compared with 48 percent of those with two applications, 31 percent of those with three, and 41 percent of those with four or more.
Although many buyers are shying away from comprehensive suites, the research offers some signs that companies are looking to consolidate their performance management capabilities into fewer total systems. No respondents to the Solutions Satisfaction Survey who have implemented BPM software within the past year run four or more performance management systems, and 75 percent of them run only one (see exhibit 6, below). Not only will this trend presumably make for more satisfied BPM users, but it should save vendors from some of the system-integration problems that damage future sales. Fifty-nine percent of users running one BPM system expect their current software provider to be able to meet their future needs, while only 36 percent of users running four or more BPM applications have the same confidence.
Time Will Tell
The next couple of years will be critical in the development of the market for business performance management software and services. Analysts project that growth will continue, and the BPM Pulse Survey bears out this prediction. The proportion of respondents who have no plans to implement performance management software decreased from 30 percent in BPM Partners' late-2003 survey to 26 percent in late 2004. At the same time, the proportion who have a project in progress, completed, or planned for the short term rose from 52 percent in 2003 to 64 percent.
To keep BPM initiatives on track and to increase the satisfaction of end users, vendors need to present more realistic projections of the time and resources each implementation will require. They also need to spend more time on boosting their customer service. If vendors plow ahead, business as usual, in a market where so many implementations are both exceeding budgets and failing to meet goals, the 22 percent of BPM Pulse Survey respondents who are in the planning stages of an initiative may rethink their investment. Substantial performance management purchases may be postponed until BPM's costs and benefits become more predictable. The alternatives aren't good, but performance management software vendors cannot take market growth for granted.
BPM buyers, for their part, need to focus on returns and on the benefits they can achieve by consolidating various facets of performance management into one software system. The promises of always up-to-date and precise data for all decision-makers become more difficult to achieve with every level of complexity added to the overall solution. Buying performance management from an ERP vendor isn't necessarily the answer, as those products seem to be more difficult, on average, to deploy and use than stand-alone software. But connecting eight systems (as one Solutions Satisfaction Survey respondent has done) is not a path to easy implementation and maintenance or to spectacular system performance.
The performance management software marketplace is a rough-and-tumble world. But over the next few years, as BPM moves into smaller companies that have tighter budgets and less interest in being leading edge for the sake of being leading edge, vendors will have to provide systems that do more than upgrade decades-old legacy applications. That approach is akin to slapping a Band-Aid on a gaping wound. Performance management applications have a lot to offer, but to stay healthy as they mature, they need to begin delivering more value on clearer expectations.
Meg Waters is editor in chief of BPM magazine and of the monthly e-mail newsletter BPM Express.
