The New Differentiators in Performance Management

Having had the pick of the plethora of independent vendors that used to populate the Enterprise Performance Management space, the three mega-vendors, IBM, Oracle and SAP, have all The New Differentiators in Performance Management image nucleus gridThe New Differentiators in Performance Managementmade acquisitions to fill the holes and weaknesses they had in their own portfolios and have largely integrated these previously stand-alone solutions to deliver suites that from the outside appear to offer broadly similar functionality. The folk on the inside that work for these vendors will no doubt take issue with this statement and come up with a tick list of points as to why their solution is superior – and accounting and finance folk who work with these solutions on a daily basis usually end up preferring one vendor’s solution over another usually on some aspect of ease-of-use; something I’ll come back to later.

But from the outside, it can all look much of a much-ness. Yes, even the analyst community is having trouble separating them out and they now appear like conjoined triplets in the top right corners of most categorization grids. This is exactly what you would expect in a mature market It’s time to do something new, something that looks into other aspects of vendors’ performance management suites and Nucleus Research is one analyst groups that is doing just that with their Corporate Performance Management Technology Value Matrix. You may not be that familiar with the name yet, but Nucleus Research is a growing analyst group with a unique financially focused investigative approach. They say their research approach follows the same financial methodology used by accountants and financial professionals and pride themselves that they are the only analyst firm registered by the National Association of State Boards of Accountancy (Registration# 108024). So Nucleus Research talk about value, TCO, and ROI and offer a range of financial modelling tools that focus on the key benefits of a solution. They say there are IT analysts that speak the same language as finance folk.

In their value matrix, Nucleus Research plot vendors uses axes that represent functionality and usability, the two core measures that they say indicate an application’s ability to deliver initial ROI and, ultimately, maximum value over time. Usability is based on the composite scores of a number of factors, including intuitiveness of the application, availability of role-based interfaces, training requirements, and productivity impact on users. Functionality composite scores are based on the breadth and repeatability of functionality in the core application, the availability and ease of integration of add-on functionality that delivers additional benefit, and critically, the vendors’ investment in innovative functionality outside the application that will deliver additional benefits.

This gives a matrix divided into four quadrants: Leaders, Experts, Facilitators, and Core Providers

  • Vendors in the Leaders quadrant have invested in both functionality and usability features likely to deliver the greatest potential returns.
  • Vendors in the Experts quadrant have invested in deep functional capabilities that, by nature, make the application more complex and thus require more training and expertise to use than Leaders.
  • Vendors in the Facilitators quadrant have invested in making their applications intuitive and easy to use, driving rapid adoption with limited training requirements.
  • Vendors in the Core Providers quadrant are point solutions or those that provide limited functionality at a relatively low cost, giving them a high value proposition when limited functionality is needed.

Such a categorization tells me a lot more about a vendor than whether it’s simply a leader or a follower, and I can imagine anyone looking to purchase software finding the Nucleus approach useful in selecting a solution that fits their needs. For instance, besides considering vendors from the Leader quadrant, SMEs might consider vendors in the Facilitators quadrant that are easy to deploy and use, whereas companies with technically demanding needs might be drawn towards a vendor in the Expert quadrant that provides a very flexible and sophisticated solution that needs considerable consulting involvement. In any mature market, where we expect leading products to tick all the boxes in terms of pure functionality, it’s these more subtle issues that become more important in purchasing decisions. For instance, few of us dig into the technical details when considering a new a vehicle and are more concerned about what it’s like to drive and how it will fit into our lifestyle. I know I am.

So I guess SAP was particularly pleased that Nucleus Research ranked them as a leader in its Corporate Performance Management Technology Value Matrix. Their position was based on the company’s recent innovations in cloud, mobile, and in-memory technology as well as integration with enterprise applications – all things that Nucleus say improves usability and delivers more value. In the report, the authors write that SAP’s mobile capabilities stand out both for the breadth of performance management capabilities made available on mobile devices and for the ability to enter data and complete processes via a mobile device. Nucleus actually spoke with a number of companies already using SAP’s mobile performance management application to accelerate the completion of financial workflows while the majority of mobile users with other vendors just had read-only access to basic dashboards and static reporting.

It’s these things that are increasingly important differentiators of performance management suites today – like the benefits that using solutions on an in-memory platform and using mobile to accelerate performance management processes – that feature large on the agenda of the SAP Enterprise Performance Management Conference that takes place on November 5 & 6 in Dallas. With an agenda that is packed with SAP customers sharing their stories of their successes in applying these newer technologies to performance management, it’s too good to miss.

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