Annual Business Performance Management Software Buyers Guide

Buyers Guide 2006: Focus on Differentiation

Companies in the market for BPM software can find comprehensive information about the latest products and market direction.

Click here to access this year's Business Performance Management Software Buyers Guide.

KEY TO BUYERS GUIDE TABLE

Dashboard: The vendor provides a graphical interface that can display a collection of key performance indicators (a scorecard) with gauges, stoplights and charts.

Metadata Management: With this functionality, companies can synchronize metadata (e.g., charts of accounts, organizational hierarchies) across the vendor's products and third-party products.

Additional BI Tools: These vendors develop and sell tools that aid in the development of BPM applications. The tools may include extract, transform and load (ETL); online analytical processing (OLAP); reporting; and other business intelligence.

Core Budgeting: The product offers top-down and bottom-up budgeting, as well as planning and forecasting.

Driver-Based Planning: The vendor provides prebuilt functionality and structure to facilitate modeling based on specific drivers.

Workforce Planning: The vendor provides prebuilt functionality and structure to facilitate development of a detailed salary plan that includes all elements of compensation and benefits.

Consolidation: The software sums data from multiple ledgers, performing currency conversion and intercompany eliminations as needed.

Vertical Solutions: Software capabilities and content are industry-specific. This offering can be the company's sole focus or an addition to more generic offerings.

Global Support: The vendor has a presence (direct or indirect) in most major business centers around the world.

Large Reference Base: More than 100 clients are successfully using this vendor's products.

This year's buyers guide reflects the continuation of trends in the business performance management (BPM) software market that we identified in previous years' guides. Key among these trends is vendor consolidation. The most notable new development in the market is a shift in the ways vendors are differentiating themselves. Many vendors offer similar BPM solutions, and they use the same language to promote their products' core features (e.g., "one version of the truth," "unified," "Web-based"). That's why they are turning to new types of functionality to stand out from the pack. This year's guide takes into account the change of focus by including columns for up-and-coming features that users are demanding most.

Planning is one of the more frequently purchased BPM components, so vendors have focused here first in their efforts to expand functionality. Driver-based planning and workforce planning are two of the newer areas in which vendors are offering embedded, out-of-the-box functionality. Predictive analytics -- championed by vendors such as OutlookSoft, Business Objects and Computer Associates -- is an emerging area that is not yet fully understood or appreciated by end users, so we've noted which vendors offer it only in this guide's comments section.

Hosted solutions (as opposed to software implemented in-house) are viable options for small to midsize companies, but the choices are still fairly limited, so we've noted this characteristic in the comments section as well. ActiveStrategy, Adaptive Planning and Host Analytics are leading the way in this area.

From an IT perspective, metadata management -- that is, the synchronization of charts of accounts, hierarchy information, etc. across multiple products -- is becoming an issue. Several vendors now offer solutions that enhance metadata management. Stratature is a differentiated leader here; it provides a stand-alone solution that works with multiple third-party products.

Although buyers are demanding BPM software with an industry focus, vendors have been slow to provide truly vertical solutions. The reasons range from lack of domain expertise to fears of becoming too narrowly focused. Several vendors that offer vertical products provide them in addition to a standard, cross-industry solution set. A few vendors have focused their entire business around a particular vertical: IPS-Sendero, for example, a new addition to the guide this year, focuses on financial services.

New Vendors in the Market

As it does every year, the 2006 buyers guide includes several new additions. Some are new vendors; others are established companies that now offer BPM products for the first time. Dashboards remain a common entry point into the market. For example, Bowstreet, a successful vendor in the portal space, introduced a portal-based performance dashboard product in 2005. Another entrant, Corporate Radar, provides personalized dashboards, while Tableau Software focuses on data visualization.

Quite a few acquisitions took place in 2005 among vendors that have been in the market for some time; all acquired entities show up in the guide as part of the listing for the acquiring company. The most significant consolidation in the BPM world last year was the acquisition of SRC Software by Business Objects. This combination adds BPM-specific applications to the Business Objects business intelligence product set. The acquisition creates a new tools-and-applications powerhouse that joins the ranks of Cognos, Hyperion and SAS Institute. Many organizations are looking to buy from a BPM vendor that can provide both applications and BPM-development tools. To meet their needs, we have added an "application and tools vendors" group to our usual categories -- application vendors, tools vendors and ERP vendors.

About This Guide

Inclusion in this buyers guide is based solely on independent research conducted by BPM Partners, a vendor-neutral consulting firm. That research includes reviews of published information and in-depth interviews with management at the major vendors, client organizations and consulting firms. Unlike most buyers guides, this listing is not vendor-sponsored, nor is it compiled from surveys completed by vendors. An online, searchable database version of this guide is available.