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Preview: Strategy-Driven Execution

Strategy-Driven Execution

This blog holds the musings of Nenshad Bardoliwalla, Co-Author of Driven to Perform: Risk-Aware Performance Management From Strategy Through Execution and an Enterprise Irregular. I focus on Analytics, Business Intelligence, Enterprise Performance Managem

Updated: 2018-03-02T07:39:48.032-08:00


The Unified Performance, Risk, and Compliance Model - Part IV - Model and Optimize


This is the fourth in a four part series on the Unified Performance, Risk, and Compliance Model.  Part I covered the strategize and prioritize phase, Part II covered the plan and execute phase, and Part III covered the monitor and analyze phase.  In the model and optimize phase of the Performance Management Lifecycle, we strive to assess the drivers of performance and risk at a deep level to understand the various alternatives we can pursue with the goal of making the best decision given a certain set of constraints.  This phase is depicted graphically below:ModelModeling falls into three categories.Revenue, Cost, and Profitability Modeling. Modeling the costs, revenue, and profitability implications of performance management, risk management, and compliance management activities and their drivers can be achieved at a very detailed level using activity-based costing and associated methodologies.Scenario Modeling. Scenario modeling can be applied to financial and operational modeling and focuses on creating different business scenarios. Simple scenario modeling can include creating a base case and then high and low cases based on changes made to input variables, such as market growth rates or inflation rates. This technique is often used in modeling market and business opportunities and creating business plans.Simulation Modeling. More advanced modeling including Monte Carlo simulation supports creating a broad range of scenarios based on multiple iterations of input assumptions and combinations. With this technique, probabilities can be assigned to the various outcomes. These techniques allow the uncertainty associated with a given forecast to be estimated and to reduce risk by applying sensitivity analysis, correlation, and trend extrapolation. By simulating the effect of uncertainty, it becomes possible to answer questions such as, “How certain are we that a given project (or group of projects) will result in a minimum outcome of x?” Or, conversely, “What’s the minimum outcome that we can be, for example, 90% certain of achieving?” Simulation also makes it possible to identify and rank the various contributors to overall uncertainty.OptimizeThe goal at this phase of the PM lifecycle is to determine the optimal way to achieve objectives by taking into account the entire context of the problem, including all relevant constraints and assessments (costs, benefits, risk, labor and time), as well as business strategies, objectives, risks, and compliance factors. Optimization can be done both through human evaluation as well as through advanced algorithmic techniques.Wrapping UpFrom a process unification perspective, risk and compliance management operating in tandem with performance management will become differentiating capabilities in the management of an organization. By effectively communicating and deploying strategy across the enterprise, proactively identifying and mitigating risks and integrating them with goals and plans, and doing so in a fashion compliant with external regulations and internal policies, the enterprise can be confident that it is maximizing performance in the context of its risks while adroitly responding to a dynamic market.From a technology unification perspective, business intelligence can be conceptualized as the base of the pyramid upon which performance management and governance, risk, and compliance are built, since it provides the basic technology capabilities and infrastructure that serve as a foundation for the higher layers of the pyramid. Connecting governance, risk and compliance capabilities with performance management capabilities through a common business intelligence platform establishes a single, unified, cleansed repository of information and common semantics on top of that information, which is critical to enabling risk-aware performance management business processes. Without this common foundation, it is impossible to obtain any synergies that extend beyond deploying any one of these capabilities in isolation.Excerpted from Driven to Perform: Risk[...]

The Unified Performance, Risk, and Compliance Process Model - Part III - Monitor and Analyze


 In the first installment of this series, we laid out the performance management lifecycle and its four phases.  We also explored in detail the first phase of the PM lifecycle, strategize and prioritize, where we develop and set the strategy, plan risks and set KRIs, plan compliance and set controls, and put together strategic action plans and initiatives. In the second installment in this series, we laid out the next phase, planning and execution, getting into the details of planning the strategic initiatives both from a financial and operational standpoint with an eye to risk.  In this post, we'll examine the third of the four phases, monitoring and analyzing.  In the monitor and analyze phase of the risk-adjusted PM lifecycle, you monitor to understand what is happening in the business, analyze to understand why it is happening, and for those things not on track, adjust to improve the situation relative to your goals.  A visual depiction of this phase is shown below:MonitorThe presentation of information to be monitored is crucial in order to facilitate decision-making. Risk monitoring is aligned directly to KRIs across the source systems that provide transactional data for the KRI. Dashboards linked with risks should help identify and manage key risks versus overall risks that are being prioritized based on exposure through quantitative/qualitative assessment. Dashboards are effective ways of combining the events, trends, and intelligence monitoring patterns across all of the major facets of the business to be monitored, including the key business dimensions like customers, products, projects, and employees and the related KPIs, KRIs, controls, and incidents and losses.     Monitor performance. You can evaluate the KPIs you’ve set to identify progress made toward achievement of objectives and trends.     Monitor initiatives. You can also evaluate which initiatives are failing or behind schedule.     Monitor risk. You can then evaluate important key risk indicators to identify:What and where are our top risks?What are the changes to the risk levels for key activities and opportunities?Are risks being assessed in accordance with company policy or according to industry best practices?Are our mitigation strategies effective in reducing the likelihood or impact of a risk?     Monitor internal controls. Report key control deficiencies, approvals, verifications, and reconciliations to mitigate risk. For example, how clean is our access control? Have there been major organizational shifts that require that we reexamine our roles? Do we need to add another layer of sign-offs?     Monitor any incidents and losses. What incidents or losses have occurred? If risks or losses have occurred, or external events are affecting the department, document this information, even if you haven’t beentracking it in the system yet.No matter how diligent you are, manual monitoring can be very inefficient. Automated monitoring can proactively identify out-of-tolerance conditions, associated with a KPI, KRI, or a control, and then alert the responsible party. This should take into account forecasting, trending, and modeling capabilities so that if a metric falls out of range of a trend or budget/plan, then the appropriate alert is raised, along with the workflow process to get the investigation under way.Analyze     Analysis is a key step in which you not only look at where you are, but what is happening (or what has happened) and why. The techniques for analysis can range from highly manual and simple to fairly automated and complex in terms of the usage of statistical techniques.     Analyze performance. For KPIs, perform analysis to understand why they are increasing or dec[...]

The Unified Performance, Risk, and Compliance Process Model - Part II - Plan and Execute


In the previous installment of this series, we laid out the performance management lifecycle and its four phases.  We also explored in detail the first phase of the PM lifecycle, strategize and prioritize, where we develop and set the strategy, plan risks and set KRIs, plan compliance and set controls, and put together strategic action plans and initiatives. The next phase, planning and execution, gets into the details of planning the strategic initiatives both from a financial and operational standpoint.  The details of this phase can be depicted as such:Align Corporate Budget to Departmental Budget and Link Corporate and Departmental InitiativesThe budgeting process takes each of the outcomes or actions from the planning process and aligns revenues and expenses against them. Decisions regarding investment priorities and resource allocations define how the company will operate and set the bar for measuring performance.To create risk-adjusted budgets, incorporate the range of possible revenues and costs of each action into the budget at the appropriate organizational level. A risk-adjusted budget is one that responds to changing circumstances, providing the financial capability to react to events in a planned, proactive manner. Align risk adjusted budgets with contingency plans should risk events occur, or if risks exceed the acceptable threshold to achieving budgets.Align Departmental Budget to Departmental Operational PlansThe operational planning process links the financial budget to specific operational factors. Plan out each step of each initiative. Consider what risks you have in each area of the operational plan. For example, in a risk-adjusted operational plan, for every decision to allocate resources to one set of operational activities versus another, you determine the impact and probability of the highest priority operational risks on those individual line items and use this to set a range of expected and forecasted values instead of fixed values. If the risk materializes, you would want a contingency plan in place that showed the performance and risk implications if we moved the budget from one initiative to another.Forecast Performance and RisksCreate rolling, risk-adjusted forecasts of the budget (revenues and costs) and operational plan (including number, capacity, and cost of resources necessary to achieve plan) so that you can see trends over a rolling time horizon for those risks whose probability, consequence, and resiliency over time. That way if you have to make adjustments, you can see where you’ve been and the direction in which things are likely to go. Predictive analytic techniques can be a particularly powerful tool for building risk-adjusted forecasts by modeling the impact previous risks had on previous forecasts.Execute PlansThis step is essential but obvious; put the plan into action. Be prepared to execute on the type of risk associated with the plan once the threshold or tolerance is exceeded.In the next installment, we'll look at the the monitor and analyze phase, which is most traditionally associated with reporting and dashboarding capabilities in the business intelligence arena.Excerpted from Driven to Perform: Risk-Aware Performance Management From Strategy Through Execution (Nenshad Bardoliwalla, Stephanie Buscemi, and Denise Broady, New York, NY, Evolved Technologist Press, 2009). Copyright © 2009 by Evolved Media, LLC[...]

The Unified Performance, Risk, and Compliance Process Model - Part I - Strategize and Prioritize


The classic performance management lifecycle that most theorists and practitioners use to describe the continuous cycle of performance improvement consists of four phases: strategize & prioritize, plan & execute, monitor & analyze, and model & optimize. This lifecycle represents the natural stages that most companies go through over and over again as they improve their performance management practice. Part of the science of performance management is determining which of the areas is in most need of attention.  This is a visual depiction of the performance management lifecycle:As I wrote in this post, one of the aspects of Driven to Perform that I'm most proud of is how we unified performance, risk, and compliance into a coherent strategic management process framework.  What led us to do this?  There are numerous reasons, but let's consider the following for starters.  In the process of setting business strategy, the development of strategic and operational plans should include the identification and assessment of risks to short- and long-term objectives and plans. Interfacing strategy with risk management to assess the vulnerability and impact of risks inherent in alternative strategies is integral to scenario analysis. Additionally, prioritizing inherent risks may demand risk mitigation tactics that will need to be factored into the annual plan and budgeted for during the planning process. While the model above is simple and serves as a useful starting point, the realities of the processes underneath, especially when risk and compliance concerns are addressed, become more complex, as depicted in this diagram that summarize the entire unified model:In this post, let's double-click on the strategize & prioritize phase, depicted in detail below:We'll provide prescriptive guidance in how to put all the pieces together in our model so you can try it yourself in your own organizational context.Understand the Corporate and Departmental Contexts     Review the corporate strategic goals, strategic plans, initiatives, and metrics. Contextualize them to the implications they have for the departments and use this context to drive the PM lifecycle.Develop and Set the Strategy     First, review the environment. To get a holistic picture of risk, understand where you currently stand and assess the internal environment and properly define and prioritize the most important risks with the greatest impact and likelihood of occurrence (risk type, impact, probability, timeframe, and mitigation strategy/costs). Be sure to assess external as well as internal risks. External risks include capital availability, competitors, shifting customer needs, economic downturns, legal or regulatory actions, shareholder relationships, disruptive technologies, and political unrest. Internal risks relate to process, management information, human capital, integrity, and technology, as well as financial concerns.     Next, get a holistic picture of the full set of compliance initiatives you will intersect with, such as SOX, OSHA, data privacy laws, and global trade regulations.     The next step is to set the mission, values, and vision:Define mission (the fundamental purpose of the entity, especially what it provides to customers and clients). Example:  "Make every information asset in the company add value to every business process"Define core values (the attitude, behavior, and character of the organization). Example:  "Show willingness to do whatever it takes to help customers succeed"Define the vision. A vision is a concise statement that defines the 3- to 5-year goals of the organization. Example:  "By 2012, be consistently ranked in the top 10% of customer satisfaction as a value-added partner for every business unit in the company."     Next, set the goals. Define a strategy and set business objectives using risks [...]

The Top 10 Trends for 2010 in Analytics, Business Intelligence, and Performance Management


In the wake of the long-running massive industry consolidation in the Enterprise Software industry that reached its zenith with the acquisitions of Business Intelligence market leaders Hyperion, Cognos, and Business Objects in 2007, one could certainly have been forgiven for being less than optimistic about the prospects of innovation in the Analytics, Business Intelligence, and Performance Management markets.  This is especially true given the dozens of innovative companies that each of these large best of breed vendors themselves had acquired before being acquired in turn.  While the pace of innovation has slowed to a crawl as the large vendors are midway through digesting the former best of breed market leaders, thankfully for the health of the industry, nothing could be further from the truth in the market overall.  This market has in fact shown itself to be very vibrant, with a resurgence of innovative offerings springing up in the wake of the fall of the largest best of breed vendors.So what are the trends and where do I see the industry evolving to?  Few of these are mutually exclusive, but in order to provide some categorization to the discussion, they have been broken down as follows:1.  We will witness the emergence of packaged strategy-driven execution applications. As we discussed in Driven to Perform: Risk-Aware Performance Management From Strategy Through Execution (Nenshad Bardoliwalla, Stephanie Buscemi, and Denise Broady, New York, NY, Evolved Technologist Press, 2009), the end state for next-generation business applications is not merely to align the transactional execution processes contained in applications like ERP, CRM, and SCM with the strategic analytics of performance and risk management of the organization, but for those strategic analytics to literally drive execution.  We called this “Strategy-Driven Execution”, the complete fusion of goals, initiatives, plans, forecasts, risks, controls, performance monitoring, and optimization with transactional processes.  Visionary applications such as those provided by Workday and with embedded real-time contextual reporting available directly in the application (not as a bolt-on), and Oracle’s entire Fusion suite layering Essbase and OBIEE capabilities tightly into the applications' logic, clearly portend the increasing fusion of analytic and transactional capability in the context of business processes and this will only increase.2.  The holy grail of the predictive, real-time enterprise will start to deliver on its promises.  While classic analytic tools and applications have always done a good job of helping users understand what has happened and then analyze the root causes behind this performance, the value of this information is often stale before it reaches its intended audience.  The holy grail of analytic technologies has always been the promise of being able to predict future outcomes by sensing and responding, with minimal latency between event and decision point.  This has become manifested in the resurgence of interest in event-driven architectures that leverage a technology known as Complex Event Processing and predictive analytics.  The predictive capabilities appear to be on their way to break out market acceptance IBM’s significant investment in setting up their Business Analytics and Optimization practice with 4000 dedicated consultants, combined with the massive product portfolio of the Cognos and recently acquired SPSS assets.  Similarly, Complex Event Processing capabilities, a staple of extremely data-intensive, algorithmically-sophisticated industries such as financial services, have also become interesting to a number of other industries that can not deal with the amount of real-time data being generated and need to be able to capture value and decide instantaneously.  Combinin[...]

Perspectives from DreamForce ’09: On the current state of SaaS in the Large Enterprise with a focus on current SaaS BI trends


I had the pleasure of conducting an interview at the DreamForce '09 event with Dennis Howlett, who writes the well-written and widely-read Irregular Enterprise blog on ZDNet.  The video of the interview is embedded immediately below and a transcript of our discussion follows.NDB: Hi. I’m Nenshad Bardoliwalla and I’m the author of Driven to Perform and formerly an executive with SAP.DAH: Ok.  So, Nenshad, what I’m interested in is how you see the difference between the cloud operators that are presenting at events like SalesForce (DreamForce '09) compared to the more traditional events that we see around the place.  So what are the real differences you are seeing?NDB: One of the key things we saw in yesterday’s keynote as well as today’s is the pace of innovation.  What you are seeing with with their Sales Cloud, Service Cloud, Custom Cloud, and then with introduction of Chatter, is that they are able to introduce large pieces of functionality to their customer base in very quick deployment cycles that is just almost impossible for the on premise vendors to do.  So, in 6 month to 1 year intervals, to release major pieces of functionality that they can deploy to their entire installed base, versus the 12-18 month cycles of the on premise vendors that require an upgrade, is a very signficant differentiator.DAH:  So what does that mean in real terms for people who are buying technology today and going in to the future?NDB:  I think that if I look at the amount of money that customer are spending on the existing on-premise applications that they have versus the amount of money they spend on the cloud (based offerings), they are able to realize value much quicker than they could with the on-premise technologies they have.  Because the cloud vendors are able to distribute the cost of the platform across a very, very large economic base, you are able to get the economies of scale based efficiencies passed to the customer.  So you wind up paying a lot less up front, on a very consistent, metered basis with the cloud offerings, and you are also able to absorb the innovation much quicker and deploy it to your business.DAH:  It’s very obvious to me that start-ups and young companies are going to be immediate targets for this kind of thing, but what about companies that have been around 20, 30, 50, 100 years?  Do you see those (companies) making a move into this area any time soon, and if so, what sort of areas would you suggest?NDB:  I think what we’re seeing in the large enterprise space is that there has certainly already been considerable penetration of human capital management solutions, as well as in the CRM area.  I’ve heard fairly consistently at (at the DreamForce ’09 event) of 5000, 10000, even 12000 user deployments, etc..  I think even flagship, marquis customers of the on-premise vendors like Siemens adopting 420,000 seats of a SaaS vendor suggest that the large enterprise is definitely willing to absorb the innovations of the cloud computing model.  That being said, I think you find areas like financials, an area that you (DAH) and I both share a keen interest and expertise in, kind of coming up along besides the human capital management and sales force areas, and now starting to take hold with vendors like Workday, but also others like Intacct, you wrote about FinancialForce earlier, etc.DAH:  Your interest obviously tends to be in the BI area.  What sort of impact do you see these kinds of technologies having in that area and what benefits will customers see as we move forward?NDB:  In the business intelligence area you have seen an explosion, especially in the last year, in terms of investment in companies who are providing SaaS BI capabilities; companies like Birst, PivotLink, Good Data, Indicee, which suggests that there is a[...]

The Road to Strategy-Driven Execution - Part II - History Lesson – From Embedded Analytics to Strategy-Driven Execution


At Siebel Systems, where I worked from 2000-2005, after we purchased nQuire in 2001 (which has since become Oracle Business Intelligence Enterprise Edition), we progressed through through four phases of linking the strategic (analytic applications) and execution (sales force automation, call center) systems.    In the first phase, we enabled users to go to Siebel Analytics directly from tabs in Siebel Call Center, a very minimal IFRAME based integration.  In the second, we created a concept of an “action link”, which allowed the user from a Siebel Analytics screen to navigate directly from a result record (e.g. the top opportunity in a top 10 list) to the actual opportunity in the Siebel Sales Force Automation application, where the user could then take immediate action.  This was a very powerful concept that remains key to the Oracle Fusion Applications value proposition.In the third phase, based on technology that I along with my colleague developed, we provided customers the ability to embed contextual analytics from Siebel Analytics directly into the SFA or Call Center application.  For example, the top part of the screen would have a list of the 10 opportunities assigned to a sales rep, and in the bottom part, a set of contextual analytics about that opportunity.  As each new opportunity was highlighted, the analytics would update without the user ever leaving their context.  This opened up a whole new range of possibilities.In the fourth phase, leveraging technology from Sigma Dynamics and now called Oracle Real-Time Decisions, using a combination of predictive analytics and business rules (see James Taylor’s excellent blog for a wealth of information on the topic), we were able to prescribe at the moment of contact with the customer a recommendation for how to treat them (e.g. upsell, free offer, etc.) based on a combination of their current context (for example what they pressed in the IVR tree) along with their historical data from the data warehouse.  Here then was the combination of real-time, predictive analytics enacted at the moment of insight that we had all been waiting for in the industry, delivered in a packaged fashion.From a technology perspective, what was great about the Siebel Analytics offering was the common information model and how rich it was combined with a very rich web layer.  Through a combination of internal development as well as the purchase of Informatica’s analytical applications IP, we were able to develop a comprehensive package of analytic applications that spanned many roles, processes, and metrics from sales to service to supply chain to financials to human resources, which Oracle still sells quite sucessfully today.  However, it wasn’t until I went to Hyperion Solutions that I understood just how rich the analytical world could be.  The reporting, dashboards, and packaged analysis capabilities of Siebel Analytics were just a small part of a much larger world that contained scorecarding, initiative management, business modeling, activity-based costing, planning, budgeting, and forecasting, and financial consolidation and reporting.  But Hyperion played almost exclusively in finance, and my immediate thought at the time was, “how do we layer the Hyperion scorecarding, planning, and modeling solutions across the entire enterprise value chain just like we had done with Siebel Analytics?”  If a company could do that, and link to the transactional systems, I believed it would be industry changing.Sure enough, right around that time, SAP announced their xApp Analytic Applications, and I was stunned.  This was a family of analytic applications, built using a visionary model-driven tool called Visual[...]

Palladium 2009 Americas Summit - How To Take Kaplan and Norton's Management System from "Execution Premium" to the Next Level with "Driven to Perform"


It is impossible to be a student of the performance management discipline without knowing the names of Robert Kaplan & David Norton, whose multiple best-selling books such as The Balanced Scorecard, Strategy Maps, and numerous others are required reading for anyone in this industry.  Together, Kaplan & Norton have made numerous seminal contributions such as the balanced scorecard, strategy maps, and time-driven activity-based costing.  I had the honor of attending Professor Kaplan's executive education course at Harvard Business School called Driving Corporate Performance with co-author Denise Broady in 2007 and it was a wonderful experience.  While in the course, Professor Kaplan hinted at and I started to see how all the pieces that had been articulated could be synthesized into a unified framework and asked Professor Kaplan about this.  He smiled and told me that this would be the topic of his next book, which was Execution Premium, released in the middle of 2008.  I view this book as truly the crowning synthesis of his work with Norton.  It is no secret that my co-authors and I began writing Driven to Perform: Risk-Aware Performance Management From Strategy Through Execution right around the time the book came out, and speaking for myself only, their book was certainly influential because of this synthesis just as the others were.On the eve of the Palladium 2009 Americas Summit, which promises to be a phenomenal event where both Kaplan and Norton will be giving keynotes, I wanted to point out, with the greatest humility possible, how  Driven to Perform builds on the ideas of Execution Premium and takes it to the next level. What are the three big ideas in Driven to Perform that take the Management System from Execution Premium to the Next Level?- Driven to Perform unifies Performance, Risk, and Compliance Management in a process-based framework.  At today's opening sessions at the event, Professor Kaplan noted that risk management was an area he hoped to focus on in the future as it's an even bigger challenge than ABC and the Balanced Scorecard.  In Driven to Perform, performance management, risk management, and compliance management are woven together into a single strategic management process as shown in the diagram below: - Driven to Perform shows how this unified Performance, Risk, and Compliance process-based framework applies to nine different areas of the value chain:  Sales, Marketing, Service, Supply Chain, Product Development, Procurement, Finance, HR, and IT.  We include the processes, roles, metrics, collaboration points, and maturity models of each different line of business and their interlinkages, as you can see in the diagram below: -  Driven to Perform shows you how to literally drive execution with your strategy using the actual transactional business processes of the modern corporation to enable what we call strategy-driven execution.  For example, we show this transactional order process where we overlay the goals, risks, forecasts, and controls directly on top to show how they should intelligently drive the process directly:My co-author Stephanie Buscemi will be at the event signing books.  Make sure you get a copy or you can order yours online![...]

A Recipe for Guaranteeing Failure - The Misalignment of People, Process, and Projects with Performance


I had the pleasure of recording a podcast led by Michael Krigsman with Naomi Bloom entitled Enterprise unplugged: Riffing on failure and performance.  Michael Krigsman is CEO of Asuret, Inc., a software and consulting company dedicated to reducing software implementation failures and writes the popular ZDNet blog on IT Project Failures. I have been most impressed by his steadfast dedication to cataloging in great detail the root causes of IT project failures in an effort to ensure a higher success rate.  If you are a practitioner in any aspect of project implementation, including Analytics, Business Intelligence, and Performance Management, his blog is a must read.

Naomi Bloom is a top consultant, analyst, writer, and thought leader throughout the HRM delivery system (HRMDS) industry.  She just launched a great site at In Full Bloom that I am certain will become one of the de facto destinations for HRM related information in short order.  To launch her blog, she wrote two fantastic posts on HRM measurement, The Road From HRM To Business Results Is Littered With Misguided Metrics Part I and Part II, that honestly could have come directly from Driven to Perform.  I sincerely respect her integrity, no-nonsense approach, and phenomenal amount of domain knowledge in her space.

Given our three areas of expertise, we converged fairly quickly on the theme "A Recipe for Guaranteeing Failure  - The Misalignment of People, Process, and Projects with Performance".  Every successful initiatve in the enterprise must start from the outcomes a business is trying to achieve, whether its a new series of HR initiatives, a new series of IT projects, or a new series of Business Intelligence initiatives.  Without constant, focused, and diligent effort to ensure alignment between the elements of people, process, projects, and performance, failure is all but guaranteed, a message that I internalized from my time working closely with Jonathan Becher, former CEO of Pilot Software and now SVP of Enterprise Solution Marketing at SAP.  We also discuss some really exciting ideas of the visual metaphors by which performance management can evolve into a discipline that can truly touch every person in a company by helping them understand exactly how one change in the enterprise impacts all the others.

Please listen read Michael's blog post and listen to the podcast and as always, your feedback is welcomed in the comments.  Enjoy!

Is Enterprise 2.0 a Savior or a Charlatan? How Strategy-Driven Execution can pave the path to proving legitimate business value


I have followed the evolution of the topic since Andrew McAfee coined the phrase “Enterprise 2.0” in the spring 2006 Sloan Management Review article to describe the use of Web 2.0 tools and approaches by businesses.  I was also really excited to attend that Enterprise 2.0 2009 conference in San Francisco for the first time.  In this post, I want to describe what I saw at the conference, what I believe to be the missing components of the full Enterprise 2.0 picture, and also discuss how becoming "Driven to Perform" by understanding Strategy-Driven Execution is the best way to justify the value of Enterprise 2.0 in your organization.It Starts With The Seminal Definition of Enterprise 2.0First, we should start with a definition of Enterprise 2.0.  There are as many definitions as there are pundits, and I think it's important to stick to a definition that has been fairly widely adopted by a reputable authority.  Therefore I will use Andrew McAfee's definition that he provided here that most closely resonates with my own:Enterprise 2.0 is the use of emergent social software platforms within companies, or between companies and their partners or customers.Social software enables people to rendezvous, connect or collaborate through computer-mediated communication and to form online communities. (Wikipedia’s definition).Platforms are digital environments in which contributions and interactions are globally visible and persistent over time.Emergent means that the software is freeform, and that it contains mechanisms to let the patterns and structure inherent in people’s interactions become visible over time.Freeform means that the software is most or all of the following:OptionalFree of up-front workflowEgalitarian, or indifferent to formal organizational identitiesAccepting of many types of dataThe organizers of the Enterprise 2.0 Conference delineate the difference between 1.0 and 2.0 as below:Enterprise 1.0 Enterprise 2.0 HierarchyFrictionBureaucracyInflexibilityIT-driven technology / Lack of user controlTop downCentralizedTeams are in one building / one time zoneSilos and boundariesNeed to knowInformation systems are structured and dictatedTaxonomiesOverly complexClosed/ proprietary standardsScheduledLong time-to-market cycles Flat OrganizationEase of Organization FlowAgilityFlexibilityUser-driven technologyBottom upDistributedTeams are globalFuzzy boundaries, open bordersTransparencyInformation systems are emergentFolksonomiesSimpleOpenOn DemandShort time-to-market cycles The false dichotomy between the definitions of Enterprise 1.0 and Enterprise 2.0 These definitions of Enterprise 2.0 and their juxtaposition against the definitions of Enterprise 1.0 are misguided.  I am certain based on my experience that the free form emergent world depicted as Enterprise 2.0 is NOT an evolution from the structured world of Enterprise 1.0, but rather, the two will exist in an intertwined tapestry that defines the full breadth of what today's enterprises need to look like.  It's extremely unhealthy for our industry to pit these two worlds against each other because they will perpetually co-exist.I believe a significant part of the problem that crops up in the Enterprise 2.0 value discussions stems from the fact that the champions of Enterprise 2.0 significantly underweight the complexity and pervasiveness of the existing information technologies in the enterprise and the reasons why these technologies evolved. Earlier this week, Miko Matsumura wrote an excellent blog entry entitled Top 5 Definitions of Enterprise: focusing on the Enterprise in "Enterprise 2.0" that really went to the heart of the matter, prompting Michael Krigsman to also reproduce it in his own blog entry to underscore its importance.The modern information technology environment in the [...]

"Driven to Perform" Podcast with Jon Reed - EPM, GRC, and the Future of SAP in a SaaS World


Jon Reed is a guru on the subject of SAP implementation skills and runs a great site called Jon Reed on SAP Consulting.  He has been deservedly recognized for his contributions by SAP by being nominated as an SAP mentor.  We got together to do podcast on a wide variety of subjects, including the motivation and methodology behind Driven to Perform: Risk-Aware Performance Management From Strategy Through Execution, how SAP's EPM and GRC offerings fulfill the vision behind the book, and the skills necessary to implement the products.  The conversation then turned to a topic that is hot on everyone's minds:  the hype versus reality of SaaS and how SAP is responding to this important trend.  You can download the podcast here or go to this page to read a fairly thorough transcript of the discussion that Jon was kind enough to create, which I would encourage anyone interested in these subjects to do.  I hope you enjoy it!  Let me know your feedback in the comments.

PivotLink Blog - Is Reporting Overrated? YES! Drilling down even further


I had the chance to meet with Ajay Dawar a couple of weeks ago, who is an old friend and someone I looked up to when we were both at Siebel Systems, and i am glad to still be in touch with him now.  Ajay was an expert on Siebel's Marketing Analytics among numerous other areas, and was one of the early employees of LucidEra, one of the earliest pioneers in SaaS BI.  There are few people in the industry who know about SaaS BI than him.  Ajay now works for PivotLink, a leading vendor in the On Demand or SaaS Business Intelligence world with a recently revamped and now very strong management team.  After our conversation, Ajay posted an intriguing blog post on PivotLink's blog entitled "Is Reporting Overrated?" that has already got a great comments thread running including James Taylor (his excellent blog here) and Jerome Pineau (his excellent blog here):Late last week I had lunch with Nenshad Bardoliwalla, an ex-VP from SAP’s Business Intelligence group. He has written a great book on Corporate Performance Management . He said (and I paraphrase)” that users don’t really know what to look for in a report and that information is useless without context. So even if you gave all the required reports to a customer they wouldn’t know all the right things to look for.” His point was that the BI industry needs much more than reports. Customers need guidance on what to look for.If you've read this blog or Driven to Perform: Risk-Aware Performance Management From Strategy Through Execution, you'll know that reporting is one small part of a very rich set of capabilities needed to manage a business effectively:  goal setting, risk management, compliance management, initiative management, planning, budgeting, and forecasting, predictive analytics, data mining, simulation and other types of modeling, and optimization.  But as to reporting specifically, for as long as I've been in this industry, and from what I can tell, as long as this industry has been around, we have not been able to get more than 20% of the users in an organization to use query, reporting, analysis, etc. tools despite continuous attempts.  We've made the reporting tools significantly easier to use, with attractive options available from SAP BusinessObjects, Oracle, and IBM Cognos having been available for years.  We now have a new generation of SaaS BI players like PivotLink as well as Birst, and Good Data that also do a credible job of providing the functionality that the on-premise vendors do, but with the significant TCO advantages that SaaS can provide, with a much lower time to implement, compelling UIs, and nowhere near the manageability headaches of their on-premise counterparts.  Will these newer BI tools be able to break the barrier of increasing the adoption of BI technologies in the enterprise?While I have good friends at every single vendor above and wish all of them nothing but the utmost success, unfortunately, I don't believe so.  I think even vendors with very low costs and very compelling options like the aforementioned SaaS BI vendors will still hit the 20% adoption wall because although their reporting capabilities are excellent, the metaphor of the report is not what end user's want.  Reports, the kind that have a grid with a lot of numbers, a number of dimensions, a few metrics, etc. require too much work to create and too much work to interpret.  If I'm a sales manager in the middle of a task and I have to look at the sales pipeline report, I have to expend a lot of cognitive effort to figure out if the right filters have been applied, what this number means versus another, etc.  It's a very specific metaphor whose rightful place is on the analysts' desk, not on the desktop of[...]

Honored to contribute to the Customer Bill of Rights - Software-as-a-Service


On October 12, 2009, R "Ray" Wang, partner at Altimeter Group, LLC, published the first Customer Bill of Rights - Software-as-a Service. In contrast to the closed-wall, not-invented-here traditional style of industry analyst firms, R actually solicited feedback from dozens of thought leaders outside of his firm as well as numerous firms themselves.  I was honored to be asked to participate with many individuals far smarter than me and think it turned out well.  My specific feedback is reproduced below so you can see the issues that I thought were particularly relevant.1.  "Issues related to software license rights. Software vendor owns the code. Licensee’s own the data. In true multi-tenancy, code cannot be client modified because a change for one client perpetuates to all clients in a multi-tenant environment. Clients must assess exit strategies. What happens if the vendor goes out of business? Is acquired by a competitor? What do you do with the data? How do you prevent lock-in?"There are two things missing here that need to be fleshed out.  The first is not the data ownership per se, but the semantics of the data.  Getting flat file dumps out of the SaaS system is not valuable without the business rules that govern the data structures within which the data is stored.  At Siebel, customers could purchase (under NDA) the data models and logical models of the system.  I believe SaaS customers should have the same right.The second issue that needs to be teased out that I've seen nobody address is process ownership.  As you know all too well, there are core and context enterprise processes that are digitized in the customer's software through their specific configuration.  In the case of highly differentiated processes, the customer should own the intellectual property of their differentiating process as embodied in the SaaS vendors software configuration.  This can include the process models (notated in BPMN or some other standards-based representation) but also the specific instances of the process itself.  If I were a customer, I would be extremely nervous if my vendor could take the embodiment of my enterprise's uniquely differentiated processes and offer it to someone else on the same multi-tenant infrastructure (especially a competitor), and that possibility is greatly increased in the SaaS environment.2.  "Include an entire agreement clause. Prospects and clients should ask for this right to ensure that demos, proposals, and promises made during the selection process are included in the final contract. Vendors should expect clients to include documentation as exhibits in contracts."This has always been a gray area in software negotiations.  On-premise vendors make all kinds of promises that they will never document because it would cause revenue deferral if caught.  I'm concerned about the serious revenue recognition risk that vendors place themselves under when they make promises they can not keep.  I think a broader point (not for this document necessarily) is that the entire revenue recognition process for SaaS companies needs to be revisited for these and many other issues related to the customer lifecycle.3.  "Perform due diligence on a vendor. Prospects should be able to examine a SaaS vendor’s financial viability, security risks, and legal liability. Key areas should include financial performance, legal risks, management team background, customer lists, and SAS 70 compliance."The SAS 70 issue needs to be teased apart further.  I believe customers deserve the right to have regular audits conducted of the vendor data center for their own purposes as well as hiring third-party auditors to do so.  S[...]

"Driven to Perform" Featured in Quick’n'Dirty Podcast


Jennifer Leggio was my colleague at Hyperion Solutions in 2005 when we launched System 9 to the market and distinguished herself as a very talented PR professional whom I'm privileged to say is still my friend.  She writes a very popular blog on ZDNet called Social Business and is also a perennial presence on Twitter.  She's forgotten more about social media than I know!  She also runs a podcast series called Quick-n-Dirty on on blogtalkradio and was kind enough to feature me in their August 27, 2009 podcast 12 which you can download here or play directly here

And this week we highlighted my former co-worker and current performance management thought leader Nenshad Bardoliwalla (@nenshad). He knows how enterprise technology and enterprise 2.0 operates better than most people I know. Definitely worth a follow.
Thanks a lot for the shout-out Jennifer!  Please take a moment to check out all of the Quick-n-Dirty podcasts including this one.  Jennifer and her co-host Aaron Strout's styles are very witty and they have a great rapport with their many excellent guests.  And after listening to this podcast, if you still haven't picked up a copy of Driven to Perform: Risk-Aware Performance Management From Strategy Through Execution, what are you waiting for? 

Performance Management: Getting Everybody On the Same Page in the Supply Chain


The three co-authors of Driven to Perform: Risk-Aware Performance Management From Strategy Through Execution wrote an article for Material Handling Management called Performance Management: Getting Everybody On the Same Page that specifically discusses how Driven to Perform can help you improve your performance in Supply Chain Management.

Some highlights are below, but be sure to read the whole article!

On the challenges of modern supply chain management and how performance management can help:

Actively managing the performance of your supply chain has never been more important. Increased globalization, volatility in demand and commodity costs, regulatory requirements and greater dependency on suppliers and other partners have significantly increased the risk of doing business. Knowing inventory positions, delivery dates and fill rates is not enough. You must also understand the impact of supply chain changes on total cost or cash flow and optimize supply chain effectiveness for better corporate results. This requires end-to-end visibility into factors that drive performance — such as cash-to-cash cycle times, overall supply chain cost and the quality of order fulfillment.

On metrics that matter to break open corporate siloes:

In today's IT-heavy supply chain networks, plenty of data points exist. In any given situation, however, only a few numbers are truly important. Unable to identify the right key performance indicators (KPIs), managers may focus only on improving the measures under their immediate control — an approach that fosters silo thinking and frequently sacrifices overall supply chain network effectiveness. For example, isolated focus on capacity utilization may result in excess inventories.

On embracing a holistic view of supply chain performance:

Quarterly snapshots of supply chain activities alone won't cut it anymore. With each passing day, the need for modern modeling and optimization processes becomes greater. If you don't have a detailed, real-time view of your supply chain, you will be unable to compete in today's marketplace. A limited view will also prevent you from aligning your supply chain strategy with your corporate goals. With the right supply chain performance management architecture, you will be able to manage an extended, globally dispersed, responsive supply network; use models to view the performance of your network; execute based on visibility gained by closing the loop; link strategy to execution; and systematically measure, monitor and optimize strategy and performance.
You can find much more detail about supply chain performance, risk, and compliance management in Driven to Perform.  Enjoy!

The Road to Strategy-Driven Execution - Part I - The Business User’s Fantasy - Enterprise Applications That Enable Strategy-Driven Execution


I have long believed in the unification of transactional and analytical systems and have been working towards building systems that deliver on this promise for close to a decade.  My co-authors and I used the term “Strategy-Driven Execution” in Driven to Perform: Risk-Aware Performance Management From Strategy Through Execution to describe this desired state.  We have come to a point from a business perspective where companies will not survive if they do not unify their insights and action systems to speed-of-thought latencies and where the technology to do so has made this a real possibility.  In the last five pages of “Driven to Perform”, we discussed the end-game for enterprise applications that would enable strategy-driven execution.  Imagine a board meeting five years from now. It is easy to imagine a meeting, for example, to discuss a downward trend in profits. Instead of having to discuss what questions should be studied and brought back for later review, it should be possible to ask and answer questions right then, using a performance management system that allows drilldown into all the relevant areas. For example, the CFO should be able to look at the trends in all of the components of net income. Perhaps the CFO discovers the most obvious cause of the declining income is increased costs in a particular product line. The VP of Supply Chain looks up the product line and identifies increased costs in a category (such as feedstock or oil). Then the VP of Procurement looks up that category and identifies spend breakdown and determines to identify alternate sources of supply. It is not hard to imagine that alternate sources are presented on the dashboard. One could be chosen and submitted for a risk review. The Chief Risk Officer can pull up a dashboard and start to determine if there are unacceptable risks. The head of customer service can report on any quality problems that may have had an effect on the market. The VP of Sales can look for other contributing factors reported from the field that may have dampened sales. The VP of marketing can analyze how to reshuffle resources to prop up demand in the desired area. During all this, the CIO and CTO can both beam happily now that everyone is speaking the same language. At the next board meeting, it would be just as simple to see if the adjustment worked. The VP of Procurement could show the costs from the new supplier. The VP of Supply Chain’s dashboard shows that costs have gone down and so the product line margin is looking good again. The CFO agrees and indicates to the CEO that the revenue on the dashboard is trending back up.It is possible to imagine an even more advanced integration of performance management, risk and compliance management, and business process management. In a world in which a company is run according to explicitly defined end-to-end processes, it will be possible to look at a goal that the company is trying to achieve in an integrated fashion. One side of the goal will be the business process used to achieve that goal, another side will be the performance management metrics that are used to track the progress of the execution of the process, and the third side would be the risk indicators and compliance processes that must be performed as part of that processes.Strategy-Driven Execution - The Complete Fusion of Goals, Initiatives, Plans, Forecasts, Risks, Controls, Performance Monitoring, and Optimization with Transactional ProcessesAny goal in business involves all three of these dimensions, but now they are treated more separately than they should be. Any attempt at optimization involves all three as well. Th[...]

BeyeNETWORK Spotlight on "Driven to Perform" with Stephanie Buscemi


In this BeyeNETWORK Spotlight, Stephanie Buscemi, co-author of Driven to Perform: Risk-Aware Performance Management From Strategy Through Execution discusses how Driven to Perform demonstrates how performance management can optimize every business unit within an organization, whether it’s a community health clinic or a multinational corporation. She is interviewed by Ron Powell, Cofounder & Editorial Director of the BeyeNETWORK.


0:40 What are the key drivers for performance management?
4:30 "The perfect storm"
5:15 Describe your new book, Driven to Perform?
8:45 Taking Performance Management into every Line of Business, not just Finance
9:30 What will readers learn from Driven to Perform?
13:30 What should customers expect next from Performance Management?
15:00 The combination of business intelligence and transactional systems

"Driven to Perform" - Unifying Performance, Risk, and Compliance via the GPS metaphor


Modern performance management goes beyond past practices in the same way that GPS systems have enhanced the quality of information available to a driver.

A car dashboard tells you about the inner workings of a vehicle. It lets you know how fast you’re going, how much gas is in the tank, and how hard the engine is working. It includes warning lights to mitigate the risk of running out of oil or gas.

Much of the history of performance management was about creating similar dashboards focused on the current state of the company. The typical performance management system provided finance-centric measurements, processes, and systems that told how the business did in the prior quarter and provided guidance about how it is currently running.

A GPS system provides an interactive map of where you want to go and how to get there. It describes the surrounding environment so that you know what roads to take. It provides context for your surroundings and options based on your preferences and needs, such as shortest route or freeways only.

In addition, GPS systems alert us when there are risks in the road ahead, such as an accident blocking a certain highway, traffic congestion, or a bridge closed for construction. Using this information, we can replot our route to make sure we still get to our destination.

Modern performance management does the same thing as a GPS system by helping companies define direction in a precise way, by providing the means to communicate and propagate a detailed understanding of the way forward, by looking ahead to what the likely outcomes are with predictive models, by looking into what is happening in the business network, and by expanding and deepening awareness of the direction of the employees, partners, and key stakeholders.

In terms of the analogy, our destination represents the strategic goals of the business. The roadblocks and weather alerts represent the risks we encounter while pursuing that strategy. Compliance is following the rules of the road, such as traffic signs or speed limits. Heeding these rules helps us get to our destination. If we ignore a red light, we’re more likely to get into an accident; if we disobey the speed limit, we’re more likely to get pulled over by a police officer. Compliance is also a matter of adhering to internal requirements such as keeping tires inflated to the optimal pressure or maintaining proper oil pressure. Needless to say, ignoring compliance has bad consequences: our travel time is slower and the costs are higher.

The task of performance management applications is to provide the traditional dashboard and to supplement that information with a model of where a company is going and how fast it is getting there. Performance management is both a dashboard and a GPS system for the modern enterprise, one that adds the dimensions of time, risk, and compliance while looking at what happened in the past, present, and future.

Excerpted from Driven to Perform: Risk-Aware Performance Management From Strategy Through Execution (Nenshad Bardoliwalla, Stephanie Buscemi, and Denise Broady, New York, NY, Evolved Technologist Press, 2009). Copyright © 2009 by Evolved Media, LLC

"Driven to Perform" Podcast on Are you ready for corporate performance management?


Stephanie Buscemi, co-author of Driven to Perform, did a podcast at SAPPHIRE 2009 discussing the key concepts of the book. This is a great way to get a quick overview!

Are you ready for corporate performance management?

Corporate performance management (CPM) is one of those hazy terms that means different things to different people, but the basic concept almost everyone can agree on is that CPM is the discipline of tracking progress against preset goals to make sure those goals are being met in as efficient a way as possible.

How to actually achieve effective CPM, which involves aspects of business intelligence (BI) and risk management, is where things get tricky. There are any number of performance management methods that companies can follow, but choosing one over another is often an exercise in guesswork.

To help you better understand the concept of CPM and develop specific steps to successfully implement and maintain a performance management framework, we're speaking with Stephanie Buscemi, vice president of marketing for enterprise performance management and governance, risk and compliance at SAP and the coauthor of the new book Driven to Perform.

In this 30-minute podcast, appropriate for both business and IT professionals, listeners will:

  • Learn just what elements make up CPM and how the discipline has evolved over the last several years (1:45).
  • Get an understanding of the current state of CPM adoption and the major stumbling blocks most companies encounter (5:30).
  • Find out how CPM demands a balance among people and process issues and technical demands (10:15).
  • Get advice on the sometimes overwhelming task of starting a CPM initiative and managing the CPM lifecycle (14:20).
  • Get tips for evaluating CPM technologies and how to make buying decisions that match your CPM needs (21:50).
  • Find out what you risk if you fail to develop a comprehensive CPM framework (25:00).

You can also download the podcast directly.

About the speaker: Stephanie Buscemi is vice president of marketing for enterprise performance management and governance, risk and compliance at SAP, where she is responsible for go-to-market plans, cross-product solutions, and product strategy. She has served in leadership roles within performance management and business intelligence over the past 14 years. Stephanie joined SAP from Hyperion/Oracle, where she was most recently senior director of global marketing. Prior to Hyperion/Oracle, Stephanie was at Business Objects, where she led in building the company's U.S. presence. She holds a B.A. from UCLA.

"Driven to Perform" Webcast: Managing Performance and Risk in a Down Economy – A Practical Approach to Optimizing Business Performance for Everyone


Managing Performance and Risk in a Down Economy – A Practical Approach to Optimizing Business Performance for Everyone

What differentiates you from your competitors? How can you improve performance in difficult times by finding and executing the most effective and efficient strategy, and then tuning it to achieve even better results? How can you achieve alignment across your organization and partner network? Don’t miss this important webcast, where you can get answers to all these questions. Come hear directly from the authors of Driven To Perform – Risk Aware Performance Management from Strategy to Execution as they describe how to strategize, plan, execute, monitor, analyze, and optimize performance, all within the context of the myriad risks and compliance requirements that companies face today.

Driven To Perform provides a unified approach to performance, risk, and compliance management that can help all you effectively manage performance across a global business network. Driven to Perform shows how to apply the principles of risk-aware performance management to your area of expertise, whether it is Finance, HR, Sales, Marketing, Service, Supply Chain, Procurement or Product Development. You will receive valuable context for all of these business areas as it relates to managing performance and risk, as well as learn the collaboration points between them enabling you to optimize performance beyond your four walls.

The concepts of Driven To Perform are essential for those who are serious about driving transformation and who are looking to create a high performance and data driven culture beyond just concepts. Driven to Perform will take you from strategy through execution, with a focus on end-to-end business processes. A detailed case study shows how a corporate strategy is executed across an organization, fleshing out the meaning of risk-aware performance management so you see a practical use case for how to apply this to your business.

Announcing the Launch of Our New Book, "Driven to Perform: Risk-Aware Performance Management From Strategy Through Execution" on!


Dear Readers, Is your business being "Driven to Perform", or is your performance driving you out of business? It is with great pride and excitement that we announce the immediate availability of our new book, Driven to Perform: Risk-Aware Performance Management From Strategy Through Execution that can help you arrive at the right answer to this most important question! We wrote this book for everyone in an organization who is interested in applying performance management techniques to improve their work, incorporating consideration of risk into their decision-making at every level. Who is this book for?From the CFO to the VP of Sales to a service manager to the CIO, the how of performance management is presented in context and in practical terms. Not only are there separate chapters for Finance, Human Resources, IT, Sales, Marketing, Service, Supply Chain, Procurement, and Product Development, but the touch points for collaboration between these departments and the larger business network are also described.Driven to Perform can help you answer questions such as:How profitable is this customer, really?Which product should we launch, given the risks?How can we systematically improve customer service and learn from the rich feedback Service can provide us?How can we manage the risks in our supply chain and comply with increasing global trade regulations?How can BI help each department do a better job?How can we save money by streamlining procurement?How can we optimize our sales territories?Which KPIs should we focus on?How can we improve communication between Marketing and our supply chain so that our promotions succeed?What is the mission of this book?Driven to Perform was written to bring together a variety of business-process improvement currents that have been flowing along separately, which now need to be explained in unison. Organizations are struggling with the increasingly global nature of business networks, with heavy regulatory and compliance requirements, and with stakeholder demands for accountability. There is an ever-expanding fountain of information, but a lack of disciplined methodologies for using it optimally. This book demonstrates how performance management can optimize every department in your organization, whether it's a community health clinic or a multinational corporation. We show how to "close the loop" between strategy, initiatives, execution, measurement and improvement. We illuminate performance management-the task of getting more and better information and using it to improve results and manage risk and compliance-as the path for success in the 21st century.Why is this book different?Unlike many books on performance management, Driven to Perform incorporates risk as a crucial part of all steps of performance management, and delves into great detail about specific areas of business practice and shows how performance management can be implemented in those areas. Driven to Perform was written to explain the role that software systems can play in supporting Performance Management processes. It is not an instruction manual for operating software, however. This book emphasizes holistic, strategic thinking, then shows how tactical solutions work to support strategy.If there is one salient feature that makes Driven to Perform stand out, it is the consistent reference to context. Information is useless without context. Processes and policies will fail if they are implemented in isolation. This book consistently shows examples that are credible, because it relates t[...]

What a Long Strange Trip It's Been: SAP and Business Objects Reported by Analyst Firm as Market Leader in Two Major Segments of EPM


On my behalf of the many colleagues whom I have had the privilege to work with at SAP and Business Objects over the last three years, it is with great pride and enthusiasm that I share with you today the greatly-anticipated launch of Gartner’s CPM Suite Software market share for 2007 and IDC’s 2007 Business Analytics market share report which includes the Performance Management Tools and Applications market.IDC announced that SAP and Business Objects have the fastest growing EPM business and lead in the Performance Management Tools and Applications market! (IDC’s term for EPM).The Performance Management Tools and Applications market is the largest subset of the Business Analytics Software market, representing $15.4 billion out of the total $22.1 billion market. According to IDC, SAP's EPM market share grew by more than a full 4 percentage points. Additionally, SAP and Business Objects have the fastest growth of any competitor in the marketplace, more than tripling the growth of our largest competitor. These latest market share findings by IDC confirm that our differentiated, comprehensive EPM strategy and approach is resonating with customers.In addition to IDC’s latest report, Gartner released its CPM Suite Software market share report and finds SAP and Business Objects is the fastest-growing EPM vendor, is taking share from all other vendors, and is statistically tied with the market leader.SAP and Business Objects is the fastest growing of the large CPM (Gartner’s term for EPM) vendors – SAP grew 31.2%, Oracle grew just 3.7%, the market grew 19%.SAP and Business Objects has moved from #4 in the CPM market a few years ago, to statistically-tied for #1.SAP and Business Objects’ market-share grew from 21.6% to 23.8%. (All vendors, with the exception of one, stayed relatively flat or declined). What has been the secret to our success? We are the only vendor today that offers a complete vision and solution portfolio which unifies EPM, GRC, BI and Information Management. For example, SAP Strategy Management is integrated with SAP GRC Risk Management, allowing executives to plan and execute corporate strategy with an in-depth understanding of the underlying risks, which therefore helps them to make more informed, calculated, risk-aware decisions and better manage future performance. SAP and Business Objects Reported by Analyst Firm as Market Leader in Two Major Segments of Enterprise Performance ManagementSAP is Market Share Leader for Performance Management Applications and Business Objects for Performance Management ToolsSAN JOSE, Calif. and PARIS - November 19, 2008 - SAP (NYSE: SAP) and Business Objects, an SAP company, today announced that IDC has reported that each leads in one of the two major segments of the Performance Management Tools and Applications market based on software license and maintenance revenue. The aggregate Performance Management market represents $15.4 billion out of the total $22.1 billion Business Analytics Software market.The market analysis, titled “Worldwide Business Analytics Software 2008–2012 Forecast and 2007 Vendor Shares,” found that SAP leads in performance management applications and Business Objects leads in the performance management tools market.1 Together these two segments comprise the broad market for performance management tools and applications. “The IDC data presented in our 2008 business analytics report finds that SAP and Business Objects each lead a major segment of the performance manageme[...]

My chapter in the new book “From Strategy to Execution - Turning Accelerated Global Change into Opportunity”



In 2007, a few of us at SAP were asked to contribute to a book entitled “From Strategy to Execution - Turning Accelerated Global Change into Opportunity”. The abstract of the book is "At the intersection of disruptive and accelerated change in the environment with globalization, business leaders around the world are trying to embrace change and incorporate innovative business models in the basics of their businesses. While innovation in their products and services remains a priority, it is the focus on rethinking how customer value is developed and delivered, and rethinking the profit formula and the financial model, and finally making corresponding changes to the core resources that are coming under increasing emphasis. This book presents new and innovative ideas and approaches that are increasingly becoming a key to business success in a rapidly changing world."

One of the chapters in the book, “From Strategy Execution to Performance Management” summarizes a lot of thinking that informed what eventually became SAP’s CPM Strategy. It was co-written with Sanjay Poonen and Adam Thier, both of whom I have the privilege of working with at SAP in crafting the CPM strategy over the last two years and have more than three decades of experience in this space between them. You can buy the chapter by itself on-line by clicking here. It’s a quick read, and I would hope that anyone involved in the CPM space would find something of interest within it. I also highly recommend a chapter written by a some other SAP colleagues on “Agile Strategy Execution — Creating Strategic Alignment“ which discusses SAP’s own internal challenges around managing strategy and rolling it out to our employees.

Chapter Summary: The fundamental business goal remains constant: make a profit and return value to shareholders. The objective is straightforward: sell a product or a service to customers for more than it costs to produce and deliver it (profit = revenue — cost). Executing a strategy to achieve this objective in today’s unforgiving business environment is not nearly as straightforward. Global markets, intense competition, compliance constraints, disruptive technologies, and talent shortages are all pressuring companies to become more agile so that they can constantly adjust to a world of accelerated change. This condition of constant adjustment forces companies to embark on a non-stop cycle of strategy development, execution, measurement, and refinement. Companies that can effectively manage their performance within this steady cycle of change are well positioned for success; companies that can’t are likely to suffer a less fortunate fate.

Oracle Customers Select SAP Solutions for Enterprise Performance Management


It's been a crazy few months at SAP with the BOBJ acquisition but the dust is starting to settle. I'm glad to see my employer come out swinging since we don't do it often even when we have great reason to. In this case, it's pretty clear with over 100 Oracle Hyperion customers choosing SAP for their Performance Management needs in the last few months that the Hyperion acquisition isn't working out the way Oracle had hoped in their attempt to "surround" SAP. Apparently things are so bad on this front that our friends in Redwood Shores have had to slash their price list by a huge percentage to remain competitive. This is definitely a case where the best things in life are not free. Today's press release follows:Oracle Customers Select SAP Solutions for Enterprise Performance ManagementGrowing Number of Companies Turn to SAP to Optimize Business Performance and Manage Governance, Risk and ComplianceWALLDORF, Germany - February 26, 2008 - SAP AG (NYSE: SAP) today announced success in its efforts to help customers add value to their IT investments by moving from other vendors’ applications to more comprehensive enterprise performance management (EPM) and governance, risk and compliance (GRC) solutions from SAP. These solutions work together to further enhance business performance and help companies build a reputation for reliable, compliant and sustainable operations. SAP reported that over the past several months more than 100 customers worldwide purchased SAP® solutions for enterprise performance management with the intention to replace Hyperion solutions from Oracle. Among those customers are: Ballast Nedam N.V., Foundation Coal, KPN Telecom B.V., Rezidor SAS, Sandvik AB, Skandia Informasjonsteknologi AS and TPG Headoffice BV. SAP also reported that it expanded market presence by selling SAP® solutions for GRC into new accounts including Chevron.Unlike solutions from other vendors, which provide only partial insight and require ongoing customer investments in integration, SAP offers customers a comprehensive set of EPM and GRC solutions that empower organizations to address critical issues facing today’s office of the CFO. The portfolio of SAP solutions for enterprise performance management unifies the full range of financial and operational processes in a single stack, arming finance professionals with capabilities such as strategy, profitability, cost and planning management. In addition, customers are turning to SAP because the company offers EPM solutions that are unified with SAP solutions for GRC. These applications help customers to build stakeholder confidence through improved executive oversight, risk detection and monitoring, and more effective controls over key business processes. The combination of EPM and GRC solutions allows SAP customers to improve financial performance while better managing risk and ensuring corporate accountability.Responding to customer demand to work with fewer vendors and provide finance professionals with a complete, unified view of their business, SAP has invested in and expanded its EPM product portfolio, for example, by adding new capabilities resulting from the acquisition of OutlookSoft. Furthermore, the acquisition of Business Objects by SAP means customers will further benefit from the leading business intelligence platform and EPM solutions – which ensure all EPM activities are based on a single, accurate version of the truth – from a single vendor.[...]

SAP to Acquire Business Objects in Friendly Takeover; Combined Companies to Accelerate Leadership for Business User Applications


SAP to Acquire Business Objects in Friendly Takeover; Combined Companies to Accelerate Leadership for Business User ApplicationsSunday October 7, 3:52 pm ETSAP and Business Objects to offer the industry's most comprehensive portfolio of business performance and optimization solutions for Business Users for companies of all sizesWALLDORF, Germany and PARIS, Oct. 7 /PRNewswire-FirstCall/ -- SAP AG (NYSE: SAP - News) and Business Objects S.A. (Nasdaq: BOBJ - News; Euronext Paris ISIN code: FR0004026250 - BOB) today announced that the companies have reached an agreement that will bring together two of the information technology industry's leaders, resulting in an unmatched offering for Business Users, enabling timely and accurate decision-making. Under the terms and conditions of the tender offer agreement, SAP will make a cash offer of euro 42.00 per ordinary share and for American Depositary Shares (ADS) at the US$ equivalent based on the EUR/US$ exchange rate as of the settlement of the tender offers. The transaction volume taking into account the transaction costs will be slightly above euro 4.8 billion. The Business Objects board of directors has approved the tender offer agreement between the two companies and anticipates recommending the offer to its shareholders subject to fulfillment of certain regulatory requirements.Together, SAP and Business Objects intend to offer high-value solutions for process- and business-oriented professionals. The solutions will be designed to enable companies to strengthen decision processes, increase customer value and create sustainable competitive advantage through real-time, multi-dimensional business intelligence. SAP and Business Objects believe that customers will gain significant business benefits through the combination of new, innovative offerings of enterprise-wide business intelligence solutions along with embedded analytics in transactional applications. Additionally, the joint partner ecosystems will be fueled by the industry's most powerful business process platform providing customers with the best enterprise information management platform available for SAP and non-SAP environments.SAP is the world's leading provider of business software with more than 41,200 customers in more than 120 countries running SAP applications-from distinct solutions addressing the needs of small and midsize enterprises to suite offerings for global organizations. A key component of SAP's growth strategy is to significantly increase its revenues from new products including addressing the growing demands of Business Users."We are highly committed to the next generation of applications serving Business Users," said Henning Kagermann, CEO of SAP AG. "The combination of SAP and Business Objects in their respective domains will benefit customers, prospects, partners, employees and shareholders. At SAP, we are excited about the prospect of having Business Objects join the SAP Group.""The acquisition of Business Objects is in keeping with SAP's stated strategy to double our addressable market by 2010 as announced in 2005," said Kagermann. "SAP will accelerate its growth in the Business User segment, while complementing the company's successful organic growth strategy. With the delivery of the first business process platform; the rapid adoption of our enterprise SOA platform, SAP NetWeaver; and the successful launch of the first complete on-demand business so[...]