What enterprise software market is growing 15%/year and is expected,
if anything, to accelerate in the next few years? If you answered,
"Sarbox compliance app’s," guess again: They grew far
more than 15% in the last couple of years but must, by nature, slow
down. "No such software?" Cute, and yes it has
been painful since the bubble, but the real answer is "Business Performance
Management" software.
At least since I was in MBA school, when it was called "executive
information" or "decision support," what it’s supposed to do is display
in one place, usually through a dashboard or scorecard interface, a
wide array of financial and strategic information, all tied to real-time
operational performance, summarized so as to enhance trend-spotting,
exception analysis, and strategic decision-making in general. Sounds
great, but as with so many IT initiatives that are predicated on the
assumption that one can seamlessly tie together information from different
databases on different systems installed at different times for different
purposes, well, you get the idea.
What’s new this time?
- The Web in general, and XML standards in particular, provide new
tools for integrating data across legacy platforms. - Sarbanes-Oxley (yes, it is ubiquitous—it’s not your imagination)
has mandated unitary and uniform financial reporting. - BPM software is getting cheaper ($50,000—$150,000 for a company
today vs. $250,000 and up previously).
Typically (human nature being what it is), corporations undertake
a BPM implementation to deal with an exogenous shock. The California-based
chain "Smart & Final" adopted it when a state-wide grocery workers’
strike threw their business a happy curve (as a non-union shop, customers
reluctant to cross picket lines favored them instead). Universal
Pictures bit the bullet after 9/11 when its theme-park traffic tanked. Viasys,
a healthcare roll-up combining over a dozen companies with the resultant
tower of financial Babel, had little alternative if they wanted to
stay on the SEC’s good side. PMI Mortgage Insurance discovered
the recent tidal wave of refinancings left it with no handle on its
portfolio risk. And so on.
An effective BPM implementation can provide solid numbers on things
you need to know about (the cost of associate turnover, for example,
or the profitability of a far-flung office), but also can produce informational
kryptonite that must be zealously safeguarded until ready to see the
light of day. For example? Not just the profitability of
a particular partner or a particular client relationship, but trends
over time, and enough background to enable you to form a view as to
whether the positive trends can be sustained and the negative trends
reversed. As one of the CFO’s who’s been through it says:
"Everyone who goes down this path needs to realize that this
is not an IT project."
Knowledge remains, however, power.
