When will a BPM 'tipping point' accelerate its use? Apart from the very largest multinationals, use of sophisticated business performance management systems is relatively low. But the software has risen to a high priority among IT managers, and this year may see a surge in implementation.

• Author: Marshall, Jeffrey
• Position: Technology - Business performance management

For all the talk and vendor marketing pieces pushing business performance management (BPM), with its promise of integrated data and dashboards, powerful analytics and ability to connect financial and planning applications, there are still a lot of CFOs and chief information officers (CIOs) who apparently need convincing.

Tom Manley, senior vice president and CFO of Cognos Inc., one of the BPM software market leaders, told an investor conference recently that "market opportunity" penetration appears to be no more than 20 to 25 percent. Cognos itself claims that 80 percent of the Fortune 1000 use its products, and archrival Hyperion Solutions Corp. can claim similar numbers. But, despite solid growth in the market, there hasn't been a "tipping point" that has turned mass prospects further down the food chain into mass converts.

It's common for vendors to trot out press releases underscoring the percentage of financial executives who want more robust and more accurate information, or who distrust some of the data that crosses their desk. But those surveys haven't yet translated into a surge in momentum for BPM. While the causes vary, analysts, consultants and vendors identify some common themes:

* Cost and time. Generally, business intelligence (BI) and, more recently, BPM solutions have been costly to license, time-consuming to implement and difficult to assess in terms of payback. While some companies have had made that leap, others have been sitting on the sidelines, unsure of the cost/benefit equation.

"Performance management systems' high license fees, ongoing maintenance and lengthy and expensive implementation cycles have limited this software's reach, particularly among mid-sized companies," noted Adaptive Planning CEO William A. Soward in the November 2006 issue of Business Performance Management.

* Distractions created by compliance issues and the incessant demands of quarterly reporting. "Occupied with responding to the regulatory pressure of the Sarbanes-Oxley Act and the never-ending quarterly and annual close efforts, organizations have been slow to take proactive steps to improve management processes," noted Ventana Research in a report last year.

* Demand for the sophistication that BPM applications provide. "For many companies, the ability for large numbers of managers to easily and accurately assimilate, analyze and share information--to use it to make informed decisions--simply hasn't matched the need," wrote Soward in his article.

Survey after survey of business processes shows a continuing--and for many, a head-scratching--reliance on spreadsheets, despite all the advances displayed by BPM applications. The fact remains that spreadsheets are deeply embedded in work processes, and many companies haven't yet been persuaded that the Holy Grail of better information requires buying BI or BPM...