Corporate Performance Management (CPM) is a complex and multi-faceted subject area. ln the Microsoft sphere most people understand the major components to be:
· Planning – Process by which an organization establishes what should happen. Planning can be separated into two distinct activities:
o What are the key performance indicators (KPI’s) that describe success?
§ Margin
§ Customer satisfaction
§ Budget variance
o What values should the KPI’s reflect to measure success?
§ Margin should be x%
§ Customer satisfaction index should be y%
§ +/- z% triggers budget variance process
· Monitoring and Analytics –
o Scorecarding – Process by which an organization describes whether what should happen, is happening.
§ Margin should be x% and is 10% off of goal, therefore we are going to highlight that with a yellow indicator
o Analytics – Process by which an organization determines why KPI goals were or were not achieved
§ Margin should have been x% and was 10% off of goal, through analysis of product Cost of Goods by line, by geography, it is determined that sourcing parts in South America was 200% of plan which reduced margin overall.
Microsoft recently announced a change in the product roadmap for PerformancePoint:
· "Microsoft has decided to consolidate Microsoft Office PerformancePoint Server scorecard, dashboard, and analytical capabilities into Office SharePoint Server Enterprise as PerformancePoint Services."
· "In mid-calendar-year 2009, Microsoft will release Office PerformancePoint Server 2007 Service Pack 3 (SP3), which will include updates to the current product’s Planning module; thereafter Microsoft will not make further investments in stand-alone versions of Office PerformancePoint Server."
· A video describing these changes is here
Within the Business Intelligence industry, reaction to this has been mixed. Ultimately I believe this is a good move for everybody:
· Why is this is a good move for customers?
o PerformancePoint Server Planning isn’t disappearing. If you had a business case for using it, you can continue to do so.
o Ultimately, (with the next version) Scorecarding and Monitoring & Analytics will have tighter integration with SharePoint
o Significant licensing advantages – depending on which licenses one currently owns, PerformancePoint may now be covered by those licenses. In other words, you may own PerformancePoint with no additional cost!
o In my opinion, this aligns Microsoft resources and focus more closely with the needs and demands of customers.
· Why is this a good move for Microsoft?
o It allows Microsoft to support the most in-demand features of their Business Intelligence portfolio, both in terms of product development, demand generation, and technical collateral, which ultimately leads to more deployments and more successful deployments
· Why is this a good move for Business Intelligence Consultants/Partners?
o With Microsoft refocusing on Scorecarding and Monitoring & Analytics, partners will find that the support and intended direction more closely aligns with the needs of the Business Intelligence market.
In the ten years that I have spent focused on Business Intelligence, it’s become clear to me that successful Business Intelligence implementations have less to do with a specific technology and more to do with how the information affects the organizational dynamics. This phenomenon is an important and often overlooked aspect of any Business Intelligence deployment. It is known by various terms: The Business Intelligence Maturity Model is the term favored by the Data Warehousing Institute. In the Microsoft ecosphere, it is an aspect of the Business Process Infrastructure Optimization model
While I would love to claim that this insight about organizational dynamics is the product of superior observational skills and rare perspective, it is in large part the product of a surprising session I had at one of my first TDWI conferences. The session was called "How to be a great data warehousing consultant" (Or something to that effect). I sat down with the expectation that I would be learning the latest dimensional modeling techniques or hearing about the newest developments in front-end visualizations. The entire session was about change management and people management. At first I was disappointed that the session focused on "softer" issues instead of technology, but as I continued my work in Data Warehousing and Business Intelligence, I realized that the fulcrum of any successful Business Intelligence deployment was how ready the people and organization were for that deployment.
In the 15 months since PerformancePoint Server RTM’ed, I’ve encountered many organizations that were ready (even anxious) for Scorecarding and Monitoring & Analytics, but very few that had sufficient processes in place to incorporate a regulated and structured planning process within their CPM efforts. This isn’t meant to reflect poorly on any of the organizations I’ve worked with, just to highlight that Planning is an activity that requires a fair amount of sophistication and organizational support; many organizations are finding sufficient challenge in simply incorporating Monitoring & Analytics effectively.
It is nearly always a mistake for an organization to try to "legislate" its way to a given level of maturity through the purchase and implementation of a given product however amazing (or not) that product may be. Since it’s introduction, I’ve had the inkling that (whether motivated by a grab for greater market share, a noble effort to help organizations move higher in the BI Maturity model, or a combination of the two), that that is what Microsoft was trying to do with the Planning portion of PerformancePoint.
What I have been seeing at our clients and through industry contacts is that the majority of PerformancePoint Server users have focused on Monitoring & Analytics and realized significant ROI from those efforts. This is not to say that there haven’t been successful PerformancePoint Server Planning deployments that also realized ROI, just that the clear majority of the organizations I have communicated or worked with are focused on PerformancePoint Server Monitoring & Analytics. It may be that the organizations that are currently focusing on Monitoring & Analytics go on to develop robust planning processes. Whether they do or not, it is certain that the organizational changes brought about by the successes with Monitoring & Analytics are necessary prerequisite growth stages that would enable these organizations to cultivate the processes necessary for effective planning.
Planning still has its place in the CPM lifecycle, regardless of technology. The availability of a specific technical platform for Planning benefitted only the small cross section of organizations that were ready to use it and did not already have an equivalent solution in place. However the shift towards tighter integration and especially wider availability of actionable information will clearly impact a much wider cross section, and ironically, help these organizations move towards more rigorous planning through better understanding of their processes and objectives. In other words, the recent changes to Microsoft’s PerformancePoint product roadmap encourage us all to (re)focus on high ROI activities that a larger population of organizations are better prepared for, and can benefit from. This ultimately will allow these organizations to grow towards the level of sophistication necessary to adapt the full Corporate Performance Management life cycle.
