Strategy-Driven Execution

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

2010-02-01T17:33:00.000-08:00

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:

Model

Modeling 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.

Optimize

The 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 Up

From 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-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 III - Monitor and Analyze

2010-01-18T14:47:00.000-08:00

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:

Monitor

The 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 been
tracking 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 decreasing.
   Analyze initiatives. To evaluate initiatives, perform analysis on the initiative to understand why it is succeeding or failing.
   Analyze risk. For KRIs, perform analysis to understand why they are increasing or decreasing.
   Analyze controls. When analyzing internal controls, you perform analysis on their effectiveness. For example, you notice that a control seems to generate a lot of incidents and find that the thresholds are set too low, creating false positives. You conclude that your controls have lost their effectiveness and analyze why.
   Analyze root causes of incidents or losses. If incidents or losses occur, perform analysis on the root causes and trends.

   In all of these cases, analysis was done with human intervention. However, it is important to note that this does not necessarily have to be the case. With the volume and complexity of data in the enterprise today, it is becoming increasingly difficult for humans to mine through the data and come to intelligent conclusions. Using data mining techniques, it is possible to have software determine the likely root causes and even suggest recommended actions to remediate.

Adjust

After monitoring to know what has happened and analyzing to understand why it happened, for those things not going according to plan, it is time to set the business back on course by taking what you’ve learned and
using that information to adjust the settings across the enterprise. However, you must always consider the impact of your goals, risks, and compliance concerns when making decisions to adjust your actions.

   Adjust performance. If you see KPIs trending in the wrong direction, once you have analyzed the root causes, it should be clear what actions to take to set things back on course. However, it is critical to remember that KPIs are interlinked, and you must optimize your performance goals in the context of risk objectives without violating your compliance objectives.
   Adjust initiatives. For initiatives that are not going as planned, it becomes essential to rapidly take remedial action or cancel them. For example, if an initiative is failing and you determine the root cause to be the MBOs for the key employees staffing the initiative, the simplest thing is to change the MBOs to see if this gets the initiative back on target.
   Adjust risk. For KRIs trending in the wrong direction, once you have analyzed the root causes, it should be clear what actions to take to set things back on course, often by putting the appropriate mitigating controls in place to stabilize them. The following types of actions can be performed to adjust risk: treat it (mitigation), tolerate it (accept it), transfer it (to another entity), or terminate it (closing down the activity that is exposing the plan to risk). However, it is critical to remember that KRIs are interlinked, and you must optimize your risk goals in the context of performance objectives without violating your compliance objectives.
   Adjust controls. For controls violations, adjustment takes the form of remediation and certification.
   Adjust after incidents or losses. For incidents and losses, the correct adjustments typically involve reexamining if we are tracking the right risks and have put the appropriate controls in place to mitigate them. Keep in mind that not every risk can be adjusted or mitigated; in some cases, you must simply accept the risk based on the established controls.

In the final installment of this series, we'll take a look at the final phase of the PM Lifecycle: model and optimize.

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 II - Plan and Execute

2010-01-11T09:45:00.000-08:00

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 Initiatives

The 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 Plans

The 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 Risks

Create 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 Plans

This 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

2010-01-05T19:32:00.000-08:00

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 as a key variable for deciding which strategies to pursue. With all that contextual information in hand, set a strategy to follow. Consider using a strategy map to display the cause and effect relationships among the objectives that make up a strategy. A good strategy map tells the story of how value is created for the business.

Assign KPIs to Goals and Set the Right Targets

     Define KPIs and targets that translate strategy into performance expectations. Identify value drivers (those elements that contribute to the value in your organization). Value drivers and related performance tolerances (KPIs) have risks associated with their achievement. Identify these risks and establish tolerance levels (KRIs). This connectivity between a value driver and a relevant KPI and KRI is an important bridge from a strategic view of risk—which can have a time horizon of three or more years—to a more focused budgetary view of risk, which is often applied to a single year.

Perform Additional Risk Analysis and Set KRIs

     Now look again at risks to see what could keep you from meeting your goals. For each risk, decide what your risk appetite is. Can you afford to take that risk? What’s the worst-case scenario? What is the contingency plan?
     Set a response strategy for the risk (treat, tolerate, transfer, or terminate). Decide whether you can afford the worst-case scenario presented by that risk from a performance management perspective. Could it bring down some critical value-generating mechanism for the company?
     Define KRIs and risk thresholds and tolerances for those risks. Key risk indicators, like KPIs, are the early warning signals that define the threshold at which a risk could occur.

Perform Additional Compliance Analysis

     Define your compliance requirements. Define policies, procedures, and controls that must be in place to ensure that you can meet the compliance requirements. Make sure that this applies not only at the main business process level but also to all subprocesses including and perhaps especially those related to partners. Define control targets that translate compliance expectations into performance.

Work on the Strategic Action Plan and Initiatives

     The strategic initiatives help define the exact methodology (the roadmap) for achieving the various goals. The results of this planning may require revisiting the strategy.
     First, develop the roadmap (sequence of actions) for achieving performance, risk, and compliance expectations.
     Next, define critical success and failure factors for all initiatives. Every project or investment must, in addition to defining the critical factors for its success, also define its critical “failure factors,” that is, those circumstances under which the project or investment is no longer likely to be successful. These failure factors can then be translated into metrics that serve as an early warning mechanism, allowing the organization to restructure or cancel a project before good resources and money are thrown after bad.
     Finally, develop different risk-adjusted scenarios with contingency plans should risks to achieving plans materialize.

Cascade Accountability

     Cascade accountability of KPIs, KRIs, and controls throughout the organization and ultimately into individual MBOs for alignment. Each KPI, KRI, and control and its target should be owned by some department or group. The MBOs of the staff must reflect the KPIs, KRIs, and controls you set. This sounds obvious, but frequently performance is measured at an individual level in a way that does not in fact relate directly to corporate goals and strategies.

In the next post, we'll look at how the unified process model plays out in the second phase of the performance management lifecycle: planning and execution.

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

2009-12-01T04:56:00.000-08:00

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 SalesForce.com 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. Combining these capabilities will lead to new classes of applications for business management that were unimaginable a decade ago.

3. The industry will put reporting and slice-and-dice capabilities in their appropriate places and return to its decision-centric roots with a healthy dose of Web 2.0 style collaboration. It was clear to the pioneers of this industry, beginning as early as H.P. Luhn's brilliant visionary piece A Business Intelligence System from 1958, that the goal of these technologies was to support business decision-making activities, and we can trace the roots of modern analytics, business intelligence, and performance management to the decision-support notion of decades earlier. But somewhere along the way, business intelligence became synonymous with reporting and slicing-and-dicing, which is a metaphor that suits analysts, but not the average end-user. This has contributed to the paltry BI adoption rates of approximately 25% bandied about in the industry, despite the fact that investment in BI and its priority for companies has never been higher over the last five years. Making report production cheaper to the point of nearly being free, something SaaS BI is poised to do (see above), is still unlikely to improve this situation much. Instead, we will see a resurgence in collaborative decision-centric business intelligence offerings that make decisions the central focus of the offerings. From an operational perspective, this is certainly in evidence with the proliferation of rules-based approaches that can automate thousands of operational decisions with little human intervention. However, for more tactical and strategic decisions, mash-ups will allow users to assemble all of the relevant data for making a decision, social capabilities will allow users to discuss this relevant data to generate “crowdsourced” wisdom, and explicit decisions, along with automated inferences, will be captured and correlated against outcomes. This will allow decision-centric business intelligence to make recommendations within process contexts for what the appropriate next action should be, along with confidence intervals for the expected outcome, as well as being able to tell the user what the risks of her decisions are and how it will impact both the company’s and her own personal performance.

4. Performance, risk, and compliance management will continue to become unified in a process-based framework and make the leap out of the CFO’s office. The disciplines of performance, risk, and compliance management have been considered separate for a long time, but the walls are breaking down, as we documented thoroughly in Driven to Perform. Performance management begins with the goals that the organization is trying to achieve, and as risk management has evolved from its siloed roots into Enterprise Risk Management, it has become clear that risks must be identified and assessed in light of this same goal context. Similarly, in the wake of Sarbanes-Oxley, as compliance has become an extremely thorny and expensive issue for companies of all sizes, modern approaches suggest that compliance is ineffective when cast as a process of signing off on thousand of individual item checklists, but rather should be based on an organization’s risks. All three of these disciplines need to become unified in a process-based framework that allows for effective organizational governance. And while financial performance, risk, and compliance management are clearly the areas of most significant investment for most companies, it is clear that these concerns are now finally becoming enterprise-level plays that are escaping the confines of the Office of the CFO. We will continue to witness significant investment in sales and marketing performance management, as vendors like Right90 continuing to gain traction in improving the sales forecasting process and vendors like Varicent receive hefty $35 million venture rounds this year, no doubt thanks to experiencing over 100% year over year growth in the burgeoning Sales Performance Management category. My former Siebel colleague, Bruce Cleveland, now a partner at Interwest, makes the case for this market expansion of performance management into the front-office rather convincingly and has invested correspondingly.

5. SaaS / Cloud BI Tools will steal significant revenue from on-premise vendors but also fight for limited oxygen amongst themselves. From many accounts, this was the year that SaaS-based offerings hit the mainstream due to their numerous advantages over on-premise offerings, and this certainly was in evidence with the significant uptick in investment and market visibility of SaaS BI vendors. Although much was made of the folding of LucidEra, one of the original pioneers in the space, and while other vendors like BlinkLogic folded as well, vendors like Birst, PivotLink, Good Data, Indicee and others continue to announce wins at a fair clip along with innovations at a fraction of the cost of their on-premise brethren. From a functionality perspective, these tools offer great usability, some collaboration features, strong visualization capabilities, and an ease-of-use not seen with their on-premise equivalents whereby users are able to manage the system in a self-sufficient fashion devoid of the need for significant IT involvement. I have long argued that basic reporting and analysis is now a commodity, so there is little reason for any customer to invest in on-premise capabilities at the price/performance ratio that the SaaS vendors are offering (see BI SaaS Vendors Are Not Created Equal ) . We should thus expect to see continued dimunition of the on-premise vendors BI revenue streams as the SaaS BI value proposition goes mainstream, although it wouldn’t be surprising to see acquisitions by the large vendors to stem the tide. However, with so many small players in the market offering largely similar capabilities, the SaaS BI tools vendors may wind up starving themselves for oxygen as they put price pressure on each other to gain new customers. Only vendors whose offerings were designed from the beginning for cloud-scale architecture and thus whose marginal cost per additional user approaches zero will succeed in such a commodity pricing environment, although alternatively these vendors can pursue going upstream and try to compete in the enterprise, where the risks and rewards of competition are much higher. On the other hand, packaged SaaS BI Applications such as those offered by Host Analytics, Adaptive Planning, and new entrant Anaplan, while showing promising growth, have yet to mature to mainstream adoption, but are poised to do so in the coming years. As with all SaaS applications, addressing key integration and security concerns will remain crucial to driving adoption.

6. The undeniable arrival of the era of big data will lead to further proliferation in data management alternatives. While analytic-centric OLAP databases have been around for decades such as Oracle Express, Hyperion Essbase, and Microsoft Analysis Services, they have never held the same dominant market share from an applications consumption perspective that the RDBMS vendors have enjoyed over the last few decades. No matter what the application type, the RDBMS seemed to be the answer. However, we have witnessed an explosion of exciting data management offerings in the last few years that have reinvigorated the information management sector of the industry. The largest web players such as Google (BigTable),Yahoo (Hadoop), Amazon (Dynamo), Facebook (Cassandra) have built their own solutions to handle their own incredible data volumes, with the open source Hadoop ecosystem and commercial offerings like CloudEra leading the charge in broad awareness. Additionally, a whole new industry of DBMSs dedicated to Analytic workloads have sprung up, with flagship vendors like Netezza, Greenplum, Vertica, Aster Data, and the like with significant innovations in in-memory processing, exploiting parallelism, columnar storage options, and more. We already starting to see hybrid approaches between the Hadoop players and the ADBMS players, and even the largest vendors like Oracle with their Exadata offering are excited enough to make significant investments in this space. Additionally, significant opportunities to push application processing into the databases themselves are manifesting themselves. There has never been the plethora of choices available as new entrants to the market seem to crop up weekly. Visionary applications of this technology in areas like metereological forecasting and genomic sequencing with massive data volumes will become possible at hitherto unimaginable price points.

7. Advanced Visualization will continue to increase in depth and relevance to broader audiences. Visionary vendors like Tableau, QlikTech, and Spotfire (now Tibco) made their mark by providing significantly differentiated visualization capabilities compared with the trite bar and pie charts of most BI players' reporting tools. The latest advances in state-of-the-art UI technologies such as Microsoft’s SilverLight, Adobe Flex, and AJAX via frameworks like Google’s Web Toolkit augur the era of a revolution in state-of-the art visualization capabilities. With consumers broadly aware of the power of capabilities like Google Maps or the tactile manipulations possible on the iPhone, these capabilities will find their way into enterprise offerings at a rapid speed lest the gap between the consumer and enterprise realms become too large and lead to large scale adoption revolts as a younger generation begins to enter the workforce having never known the green screens of yore.

8. Open Source offerings will continue to make in-roads against on-premise offerings. Much as Saas BI offerings are doing, Open Source offerings in the larger BI market are disrupting the incumbent, closed-source, on-premise vendors. Vendors like Pentaho and JasperSoft are really starting to hit their stride with growth percentages well above the industry average, offering complete end-to-end BI stacks at a fraction of the cost of their competitors and thus seeing good bottom-up adoption rates. This is no doubt a function of the brutal economic times companies find themselves experiencing. Individual parts of the stacks can also be assembled into compelling offerings and receive valuable innovations from both corporate entities as well as dedicated committers: JFreeChart for charting, Actuate's BIRT for reporting, Mondrian and Jedox's Palo for OLAP Servers, DynamoBI's LucidDB for ADBMS, Revolution Computing's R for statistical manipulation, Cloudera's enterprise Hadoop for massive data, EsperTech for CEP, Talend for Data Integration / Data Quality / MDM, and the list goes on. These offerings have absolutely reached a level of maturity where they are capable of being deployed in the enterprise right alongside any other commercial closed-source vendor offering.

9. Data Quality, Data Integration, and Data Virtualization will merge with Master Data Management to form a unified Information Management Platform for structured and unstructured data. Data quality has been the bain of information systems for as long as they have existed, causing many an IT analyst to obsess over it, and data quality issues contribute to significant losses in system adoption, productivity, and time spent addressing them. Increasingly, data quality and data integration will be interlocked hand-in-hand to ensure the right, cleansed data is moved to downstream sources by attacking the problem at its root. Vendors including SAP BusinessObjects, SAS, Informatica, and Talend are all providing these capabilities to some degree today. Of course, with the amount of relevant data sources exploding in the enterprise and no way to integrate all the data sources into a single physical location while maintaining agility, vendors like Composite Software are providing data virtualization capabilities, whereby canonical information models can be overlayed on top information assets regardless of where they are located, capable of addressing the federation of batch, real-time and event data sources. These disparate data soures will need to be harmonized by strong Master Data Management capabilities, whereby the definitions of key entities in the enterprise like customers, suppliers, products, etc. can be used to provide semantic unification over these distributed data sources. Finally, structured, semi-structured, and unstructured information will all be able to be extracted, transformed, loaded, and queried from this ubiquitious information management platform by leveraging the capabilities of text analytics capabilities that continue to grow in importance and combining them with data virtualization capabilities.

10. Excel will continue to provide the dominant paradigm for end-user BI consumption. For Excel specifically, the number one analytic tool by far with a home on hundreds of millions of personal desktops, Microsoft has invested significantly in ensuring its continued viability as we move past its second decade of existence, and its adoption shows absolutely no sign of abating any time soon. With Excel 2010's arrival, this includes significantly enhanced charting capabilities, a server-based mode first released in 2007 called Excel Services, being a first-class citizen in SharePoint, and the biggest disruptor, the launch of PowerPivot, an extremely fast, scalable, in-memory analytic engine that can allow Excel analysis on millions of rows of data at sub-second speeds. While many vendors have tried in vain to displace Excel from the desktops of the business user for more than two decades, none will be any closer to succeeding any time soon. Microsoft will continue to make sure of that.

And so ends my list of prognostications for Analytics, Business Intelligence, and Performance Management in 2010! What are yours? I welcome your feedback on this list and look forward to hearing your own views on the topic.

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

2009-11-24T17:38:00.000-08:00

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 Salesforce.com 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 SalesForce.com (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 very, very healthy market for people who are trying to get business intelligence capabilities but have never been able to afford to do so in the small and medium sized businesses, but then in the larger enterprise, without being able to change their deployments. I know in my experience in 10 years in the large enterprise, though not in SaaS, customers not being able to change the system quickly enough, which for (reporting and) analysis is a very key differentiator. Having the ability to do that with the SaaS vendors is a key step up I think for business intelligence technologies.

DAH: It’s a very fast moving area. What do you see in the immediate future, say in the next 1 to 3 years (for the BI space)?

NDB: I think right now we are seeing a very strong focus on tools, and as you know, Dennis, in most markets, things that start off as tools eventually become packaged and move upstream and become applications. I think we will see in the next 1 to 3 years a couple of key marquis applications players in the BI space, people who are doing Corporate Performance Management, people who are doing Sales Performance Management, or even Supply Chain Performance Management. We'll have real established application vendors for BI applications that can run alongside the SalesForce.com’s, run alongside the Workday’s, and other marquis Tier 1 SaaS platforms.

DAH: And they would, in that sense, need to be pretty affordable, I would guess, as compared to what we see at the moment with the traditional vendors, yes?

NDB: Absolutely. I think affordability is one of the key areas where there will be differentiation, but also another is “legs and regs” (legislation and regulations, especially important in Financials). I think we are seeing now a fairly high degree of volatility in terms of the move to IFRS, people publishing via XBRL, other types of standards where people can absorb that and let their vendor take care of that for them instead of them reconfiguring their chart of accounts, them trying to map to XBRL taxonomies, etc.

DAH: Great. Thanks very much, indeed.

NDB: Thank you.

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

2009-11-17T13:12:00.000-08:00

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 Composer, that was designed from the outset to integrate analytics and transactions using web services. Even more interesting was that the applications had an incredible Flex-based user experience that was easily competitive with all the leading BI vendors.

I was convinced at that time, that if any vendor could deliver on the vision of Strategy-Driven Execution, it had to be SAP. They owned the largest transactional applications installed based in the world, understood processes across many horizontal and vertical slices, were service-enabling all of those processes, and now had an exciting analytic capability. I jumped at the chance to be a part of this in 2005.

In short order, things changed very dramatically in the technology landscape. Oracle acquired PeopleSoft, Siebel, and then Hyperion, thereby also amassing an incredible set of strategic and execution assets, and SAP acquired Virsa, Pilot Software, OutlookSoft, and Business Objects. The pieces were now all in place for SAP and/or Oracle to realize the vision of Strategy-Driven Execution in their comprehensive product portfolios.

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

2009-11-10T18:36:00.000-08:00

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

2009-11-10T10:19:00.000-08:00

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

2009-11-05T18:40:00.000-08:00

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 2.0

First, 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:
Optional
Free of up-front workflow
Egalitarian, or indifferent to formal organizational identities
Accepting of many types of data

The organizers of the Enterprise 2.0 Conference delineate the difference between 1.0 and 2.0 as below:

Enterprise 1.0	Enterprise 2.0
Hierarchy Friction Bureaucracy Inflexibility IT-driven technology / Lack of user control Top down Centralized Teams are in one building / one time zone Silos and boundaries Need to know Information systems are structured and dictated Taxonomies Overly complex Closed/ proprietary standards Scheduled Long time-to-market cycles	Flat Organization Ease of Organization Flow Agility Flexibility User-driven technology Bottom up Distributed Teams are global Fuzzy boundaries, open borders Transparency Information systems are emergent Folksonomies Simple Open On Demand Short 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 Enterprise looks a lot more like this diagram below from Driven to Perform than just a collection of e-mail, blogs, wikis, etc. that any Enterprise 2.0 overemphasize, although they are clearly part of the fabric woven together in what is commonly referred to as information work.

The Components of a Modern Automation and Information Infrastructure

The rich repository of highly-structured and semi-structured business processes and associated applications and infrastructure necessary to run a modern business can not and likely will not ever migrate to the Enterprise 2.0 definition, nor should they ever, but they will be augmented increasingly by it. We discuss many of them in Driven to Perform and orient them in a cross-enterprise value chain based on Michael Porter's seminal work.

The Integrated Business Processes of the Modern Enterprise

They key activity steps of enterprise business processes embodied into today's ERP, CRM, SCM et al software, such order-to-cash, procure-to-pay, hire-to-retire, or record-to-report need to be highly structured for a variety of reasons, not the least of which is efficiency, their primary reason for being, but also for the significant compliance concerns they address. I don't foresee a point any time in the near future where enterprises will leverage Enterprise 2.0 principles in the core of accounting, or payroll, or order management because there are serious risks to doing so for a business. These enterprise business processes are complicated enough without any unstructured processes surrounding them, as you can see here in this offer creation process, which we diagrammed in Driven to Perform in our chapter on Risk-Aware Marketing Performance Management:

Creating the Optimal Offer

However, what you notice in any enterprise business process like the one above is that there is a lot of white space. The white space is where people are human integrators. Where the various folks from marketing, the contact center, sales, and operations fill in the gaps that their enterprise software does a poor job of addressing today. It is in these process contexts that wikis, blogs, instant messaging, etc. can perform a brilliant and valuable service, and for certain processes, form the entire substrate upon which the enterprise process can be manifest. Thus, ultimately, the real Enterprise 2.0, the weaving of both the structured and unstructured worlds together, really looks a lot more like this:

The real Enterprise 2.0: A combination of structured and unstructured processes

and technologies woven together to achieve desired business outcomes

Enterprise 2.0 technology is only starting to become really enterprise ready

Because of a lack of understanding of how the modern enterprise infrastructure works, my belief is that a lot of the existing E2.0 offerings have gaping holes in them that must be addressed if they are to survive long term in the environment they wish to play in beyond the proverbial "server under someone's desk". I was surprised, for example, during the Google Wave keynote that the speaker referred to the desire to put as few restrictions in place in the security model as possible to ensure the maximum degree of collaboration. Examples like these, among many others, show that there is a long way to go before these tools can be used pervasively in the enterprise without serious repercussions. I am certain that regulations around archiving, audit, document retention, privacy regulations etc. along with technical requirements like delegated authentication, encryption, etc. can not be adequately addressed with many of these tools in their current ungoverned state in the enterprise and this will be a liability in these tools adoption until it's addressed.

It should be noted that the more sophisticated vendors absolutely understand what they need to do to be viable in a truly enterprise context but they are decidedly in the minority. Linden Lab, creators of the Second Life 3D virtual world, had a major announcement at the conference in unveiling Second Life Enterprise that had nothing to do with sexier avatars, but instead decidedly focused on the unsexy topics like providing a private and secure virtual environment with enterprise manageability capabilities. Similarly, Novell, long a networking and infrastructure stalwart from Enterprise 1.0, unveiled Novell Pulse, with a set of enterprise class capabilities on top of Google Wave. These vendors realize that completely unstructured capabilities that do not bolt into the enterprise mechanisms of governance have little chance for broadscale adoption.

Conversely, leading enterprise application players like Workday are starting from the robust ERP and HCM process perspective of the so-called "Enterprise 1.0" world and layering many social constructs such as tagging, inline collaboration, etc. into their applications to deliver on this converged Enterprise 2.0 notion I describe above. This movement from the process-based applications to embrace the unstructured social world is well summarized by R Ray Wang's notion of Social Enterprise Apps, which combine the process and social worlds:

Source: Software Insider's Point of View - 10 Elements Of Social Enterprise Business Solutions and Platforms

The advocates and skeptics talk past each other when it comes to Enterprise 2.0

Unfortunately, the current Enterprise 2.0 dialogue has much room for improvement because we are all talking past each other. When I was asked by Jennifer Leggio to contribute to her blog entry entitled 2010 Predictions: Will social media reach ubiquity? , I responded:

In 2009, a tremendous amount of noise in the marketplace surrounding social media has reached a fever pitch and this threatens to drown out its potential effect to be transformative in the enterprise. Those projects and vendors that customers were willing to experiment with in 2009 will need to tie their efforts to concrete performance improvements in order to remain viable as social media’s sheen of being the new kid on the block wears off.

I realize that Jennifer's request was about social media, and social media does not equal Enterprise 2.0, but I think it's fair to equate the usage of social media technologies within the Enterprise as a loose approximation of the term, and that is what spurred my response.

To be certain, there is a raging debate in response to this hype in the enterprise and as supporters become more zealous the detractors become more incendiary. Dennis Howlett kicked things off with his August 26, 2009 post Enterprise 2.0: what a crock, arguing that:

Like it or not, large enterprises - the big name brands - have to work in structures and hierarchies that most E2.0 mavens ridicule but can’t come up with alternatives that make any sort of corporate sense. Therein lies the Big Lie. Enterprise 2.0 pre-supposes that you can upend hierarchies for the benefit of all. Yet none of that thinking has a credible use case you can generalize back to business types - except: knowledge based businesses such as legal, accounting, architects etc. Even then - where are the use cases? I’d like to know.

Needless to say, it received a lot of attention. In response, an entire panel discussion was convened at the Enterprise 2.0 Conference literally entitled "Is Enterprise 2.0 A Crock?". In the panel, an excellent summary of which you can read here by my ex-SAP colleague Timo Elliott, it was absolutely clear that the customers, represented by marquis brand names like EMC, Eli Lilly, and Alcatel-Lucent, saw clear value in their deployments, but it was also clear that it was very hard to quantify what that value was. What was most disappointing however was that there was no debate. All the participants were predisposed to believing Enterprise 2.0 was not a crock, which defeated the point of such a session. This spurred yet another round of salvos such as Enterprise 2.0 - the non-debate from Dennis Howlett, where I was quoted about my disappointment in the lack of debate, and Miko Matsumura's balanced perspective in The Enterprise 2.0 Crock. This prompted Susan Scrupski, who has done a remarkable job in a short period of time with the 2.0 Adoption Council, to fire back with her own post entitled "Checkmate" which listed a veritable who's who list of incredible brand names who are all part of the council and who clearly see the value in Enterprise 2.0.

Who's right? They are actually both legitimate perspectives, and I am convinced they can be reconciled. Fortunately, I am not the only one.

Strategy-Driven Execution is the path to legitimizing Enterprise 2.0 business value

Sameer Patel who writes the excellent Pretzel Logic blog and Oliver Marks, whose Collaboration 2.0 blog is very popular are both highly-regarded thought leaders in the Enterprise 2.0 space, reflected in them being nominated to the conference's advisory board. What I appreciate about both of their perspectives is that they clearly understand the enterprise in Enterprise 2.0 and have a very pragmatic approach to championing adoption, driven by prioritizing business value, which aligns exactly with my way of thinking. This mindset of business-value first first was clear even in the session names of their track, such as "Selling the Case for Accelerating Business Performance with Enterprise Collaboration and 2.0 Technologies", "Collaboration at Scale", "Lowering Customer Service Costs Via Social Tools", and "Launching Winning Products in the Market: How Social Software Improves Your Odds". Notice that the sessions explicitly talk about how collaboration facilitates existing enterprise business processes. With that as a lens, it suddenly does become possible to quantify the value of Enterprise 2.0 tools.

In Driven to Perform, we looked at dozens of business processes and described the key roles, collaboration points, and metrics that surround those business processes to drive business performance. Using this framework, we can now start to ask questions that put serious metrics on top of Enterprise 2.0 investments. Let's return to the example of the offer management process. In the original "creating the optimal offer" business process diagram above, there is a lot of white space because the existing structured marketing enterprise systems do not address the entire end-to-end offer management process. I argued above that this white space could be filled by collaborative tools. What are the metrics that a head of marketing might care about surrounding offer management? The head of marketing would certainly care about the speed of campaign development as measured by the time to develop new offerings. For example, today, it might take her and her organization 6 weeks to develop a full offering, which is much too slow in the competitive environment her company is in. Can an Enterprise 2.0 tool like wikis significantly reduce the offer creation time, perhaps even by half, by opening up the process and allowing people to collaborate to generate better offer ideas faster? Absolutely. Could an Enterprise 2.0 community forum significantly reduce the time to get responses to various offers from trusted customers? Absolutely. CRM thought leaders like Esteban Kolsky on his CRM Intelligence and Strategy blog and Paul Greenberg on his blog Social CRM: The Conversation would tell you the same thing in their excellent treatises on Social CRM. And there is the business value. Hard, quantified ROI. You can only get that once you understand the goals of your organization, the current business processes in place that are set in place to achieve them, and the metrics used to instrument those processes. That's what I call Strategy-Driven Execution, and you will need to understand it if you want Enterprise 2.0, the real Enterprise 2.0, to flourish in the enterprise.

Driven to Perform is filled with literally hundreds of examples of the ways Enterprise 2.0 tools can actually drive quantified business value by combining the unstructured and structured processes that drive business performance, but that that is not the way Enterprise 2.0 tools are being sold today. If an Enterprise 2.0 tool can: increase the average deal size, reduce cost to serve, increase customer loyalty, decrease new product development time, etc., than there is a legitimate business use case and a hard ROI associated with it. So my advice to both the zealots and naysayers of Enterprise 2.0 would be to take an existing, legitimate pain point, like offer creation, or product development, or customer service, and start by benchmarking your current metrics. If an Enterprise 2.0 tool can move those metrics in the right direction in a provable way, you will have real, hard ROI. If the tool doesn't contribute to moving those process metrics in the way you hoped, then you might have a problem with your executive sponsor.

So, Is Enterprise 2.0 a Savior or a Charlatan?

It could be either. The keys to answering this question lie in your understanding of your goals, your current enterprise processes, and their associated metrics. Without knowing this, we'll all continue talking past each other to our mutual detriment.

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

2009-10-29T12:40:00.000-07:00

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

2009-10-27T15:38:00.000-07:00

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 every user in the enterprise. Those end users definitely need the information that is contained within those reports, but delivering it in the report format is unlikely to work, no matter how easy it is to create. But, I readily acknowledge that it is too early to tell. I am an empiricist and always welcome contrarian opinions and more importantly data that refutes my hypotheses.

For those users in the enterprise who DO need reports, such as analysts, I think the SaaS BI offerings like PivotLink's and Good Data's are very compelling from a value perspective compared to their on-premise brethren, and all have their sweet spots in terms of differentiation. But that post is for another day!

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

2009-10-27T14:37:00.000-07:00

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. Some vendors refuse to share the results of their SAS 70 certification process other than validating that they have the certification, and this not acceptable to many customers for certain business processes (Hire to Retire) in certain industries (Pharma) and certain geographies (EMEA).

Finally, a general comment: I appreciate the individual tenets described under the SaaS Ownership Experience Spans a Five-Phased Lifecycle. But for each individual tenet "professional customer relations, timely and meaningful interactions" etc., I kept asking agreeing with the principle but then immediately asking myself "how should this be measured and what's the appropriate benchmark?" This should be no surprised given my background and expertise, but I think it's a critical point. Examples: Is a roadmap update every 6 months "timely"? What "format of remuneration" is acceptable without putting undue burden on both parties? I expect that much of this information is not available given the infancy of the industry, but this would be a very valuable area of research for Altimeter or others in the ecosystem to pursue.

You can see the full document here:

AG Customer Bill of Rights - SaaS - Live

Other excellent coverage of this topic follows:

A 'Bill Of Rights' For SaaS Customers‎

SaaS Customer Bill of Rights: right thing, right time

Altimeter Report: Customer Bill of Rights – Software-as-a Service

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

2009-10-27T13:04:00.000-07:00

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.

In Jennifer's summary on her blog Quick’n'Dirty Podcast: FriendFeed, Facebook and Foursquare, oh my!, she was kind enough to designate me as a Featured Twitterer and wrote:

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

2009-10-27T12:18:00.000-07:00

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

2009-10-27T11:41:00.000-07:00

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 Processes

Any 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. The end result of this kind of strategy-driven execution is the ability to rapidly reconfigure your business with confidence that no important issues are being ignored.

BeyeNETWORK Spotlight on "Driven to Perform" with Stephanie Buscemi

2009-07-14T09:11:00.000-07:00

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.

Timeline

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

2009-05-28T08:16:00.000-07:00

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 SearchDataManagement.com: Are you ready for corporate performance management?

2009-05-19T11:38:00.000-07:00

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

2009-05-08T12:31:00.000-07:00

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 Amazon.com!

2009-05-04T16:25:00.000-07:00

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 them to overarching goals. Performance management is not a one-time exercise that will solve a company's problems forever. It is a practice that all stakeholders need to live and breathe, every day, and to modify as the context changes. This book provides the framework for creating a data-driven performance management culture that is contextual and relevant, even as conditions change.

Who is publishing this book?

The great team over at Evolved Technologist Press is publishing Driven to Perform. Evolved Technologist is a subsidiary of Evolved Media, a marketing, communications, and publishing firm that has created more than 19 books and scores of white papers, technical documentation sets, user guides, marketing materials, proceedings, and wikis since 2002.

How do I get started?

Driven to Perform is available NOW on Amazon.com in soft cover. You may also visit the book site at http://www.driventoperform.net/ to learn more.

Best Regards,

Nenshad Bardoliwalla, Stephanie Buscemi and Denise Broady.

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

2008-12-08T09:23:00.000-08:00

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 Management

SAP is Market Share Leader for Performance Management Applications and Business Objects for Performance Management Tools

SAN 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 management market,” said Dan Vesset, vice president, Business Analytics Solutions, IDC. “The two companies have come together and are balancing the goals of remaining open for non-SAP customers while optimizing their solutions for the SAP platform. This openness and ability to satisfy all customers—along with the breadth of Business Objects and SAP’s enterprise performance management solutions—are catalysts for continued market growth.”

According to the IDC report, which evaluated the two companies separately in 2007 because they had not yet merged, SAP and Business Objects held 11.2 percent and 7.6 percent respectively of the total 2007 market share for performance management tools and applications. The report also found that SAP’s share of the performance management tools and application market grew at 19.3 percent, higher than the market as a whole.

IDC attributes SAP and Business Objects’ leadership to the following factors: “SAP continues to see strength in sales of its performance management applications across a diverse set of business processes. In addition, Business Objects showed continued strength in growing its business intelligence tools revenue in 2007. The company, acquired by SAP in the past year, contributed a significant install base, broad product portfolio, strong brand recognition and experienced development and marketing resources. Business Objects will expand SAP’s diversity and offers improved reach into the small and medium-sized business market segment with its Crystal Reports® software.”

“It is gratifying to see that SAP and Business Objects’ vision and execution have been validated by our customers, partners and one of the leading industry analyst firms,” said Sanjay Poonen, general manager and senior vice president, Performance Optimization Applications, Business Objects. “We have experienced rapid growth in the EPM market, catapulting us to the top position in the market, over competitors with outdated products. Our EPM portfolio expands beyond finance to provide end-to-end performance management capabilities across the organization to ensure both profitable and compliant business performance. SAP and Business Objects’ diversity of EPM offerings—combined with the leading business intelligence and governance, risk and compliance solutions, all with more modern, user-centric application design—puts us ahead of traditional vendors who possess harder-to-use, incomplete EPM solutions.”

1 Worldwide Business Analytics Software 2008 - 2012 Forecast and 2007 Vendor Shares, IDC #214904, November 2008

About Business Objects

Business Objects, an SAP company, transforms the way the world works by connecting people, information and businesses. With open, heterogeneous applications in the areas of governance, risk and compliance; enterprise performance management; and business intelligence, Business Objects enables organizations of all sizes worldwide to close the gap between business strategy and execution. Together with a strong and diverse partner network, Business Objects allows customers to optimize business performance across all major industries including banking, retail, consumer-packaged goods and public sector. Business Objects is committed to helping customers turn raw data into actionable decisions, regardless of their underlying database, operating system, applications or IT system.

For more information about Business Objects, visit: http://www.businessobjects.com/.
For more information about SAP, visit: http://www.sap.com/.

Any statements contained in this document that are not historical facts are forward-looking statements as defined in the U.S. Private Securities Litigation Reform Act of 1995. Words such as “anticipate,” “believe,” “estimate,” “expect,” “forecast,” “intend,” “may,” “plan,” “project,” “predict,” “should” and “will” and similar expressions as they relate to SAP are intended to identify such forward-looking statements. SAP undertakes no obligation to publicly update or revise any forward-looking statements. All forward-looking statements are subject to various risks and uncertainties that could cause actual results to differ materially from expectations. The factors that could affect SAP's future financial results are discussed more fully in SAP's filings with the U.S. Securities and Exchange Commission ("SEC"), including SAP's most recent Annual Report on Form 20-F filed with the SEC. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of their dates.

Copyright © 2008 SAP AG. All rights reserved.SAP, R/3, mySAP, mySAP.com, xApps, xApp, SAP NetWeaver and other SAP products and services mentioned herein as well as their respective logos are trademarks or registered trademarks of SAP AG in Germany and in several other countries all over the world. Business Objects and the Business Objects logo, BusinessObjects, Crystal Reports, Crystal Decisions, Web Intelligence, Xcelsius and other Business Objects products and services mentioned herein as well as their respective logos are trademarks or registered trademarks of Business Objects S.A. in the United States and in several other countries. All other names mentioned herein may be trademarks of their respective owners. All other product and service names mentioned are the trademarks of their respective companies. Data contained in this document serve informational purposes only. National product specifications may vary.

For customers interested in learning more about Business Objects products:

Global Customer Center: +49 180 534-34-24
United States Only: 1 (800) 872-1SAP (1-800-872-1727)

For more information, press only:

Scott Behles, SAP, +1 (917) 494-2009, scott.behles@sap.com, EST
SAP Press Office, +49 (6227) 7-46315, CET; +1 (610) 661-3200, EST; press@sap.com
Janina Buchholz, Burson-Marsteller, + 1 415-591-4081, janina.buchholz@bm.com, PST
Want to learn more? Contact the SAP sales office nearest you.

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

2008-06-08T00:56:00.000-07:00

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

2008-02-26T21:00:00.000-08:00

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 Management

Growing Number of Companies Turn to SAP to Optimize Business Performance and Manage Governance, Risk and Compliance

WALLDORF, 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.

“The SAP Business Planning and Consolidation application helped The Rezidor Hotel Group to cope with the ever increasing need for timely and more detailed financial oversight,” said Alain Wouters, manager, Group Accounting, The Rezidor Hotel Group. “Events such as our recent IPO and new financial demands, such as customer sustainability reporting for improved accountability to our clients, have added to the workload and could not have been supported with previous software. With SAP Business Planning and Consolidation, we can take a more unified approach to performance management.”

SAP customers also benefit from industry-leading innovation in SAP solutions for enterprise performance management, including unrivaled usability and features to enhance user productivity. For example, SAP® Business Planning and Consolidation allows for easy interchange with Microsoft Office and the Web, offering customers an easy-to-use interface that benefits business users regardless of technical skills. In addition, the application allows finance departments to independently maintain their enterprise performance management solutions – decreasing their reliance on IT staff for customization and upkeep. Because SAP solutions for enterprise performance management deliver such user-friendly features, customers can deploy them more broadly and increase the value of their IT investment.

“Existing solutions for performance management were built with the finance department of the 1990s in mind – with a patchwork of products, on old architectures, a rear-view approach to budgeting, and no links to the actual business processes,” said Sanjay Poonen, senior vice president and general manager of Enterprise Performance Management, Business Objects, an SAP company. “With continued investment and innovation in SAP solutions for enterprise performance management, we can offer modern CFOs a more compelling value proposition, especially when customers pair EPM solutions with our GRC offerings. We have seen a strong, positive response by customers, as demonstrated by the strong success SAP had during the second half of 2007. Customers value a more complete EPM and GRC solution offering, and, most importantly, a trusted solution provider. These are the attributes that account for SAP’s strong momentum in this market.”

About Business Objects

As an independent business unit within SAP, Business Objects transforms the way the world works by connecting people, information and businesses. Together with one of the industry’s strongest and most diverse partner networks, the company delivers business performance optimization to customers worldwide across all major industries, including financial services, retail, consumer-packaged goods, healthcare and public sector. With open, heterogeneous applications in the areas of governance, risk and compliance; enterprise performance management; and business intelligence; and through global consulting and education services, Business Objects enables organizations of all sizes around the globe to close the loop between business strategy and execution.

About SAP

SAP is the world’s leading provider of business software*. Today, more than 46,100 customers in more than 120 countries run SAP® applications—from distinct solutions addressing the needs of small businesses and midsize companies to suite offerings for global organizations. Powered by the SAP NetWeaver® technology platform to drive innovation and enable business change, SAP software helps enterprises of all sizes around the world improve customer relationships, enhance partner collaboration and create efficiencies across their supply chains and business operations. SAP solution portfolios support the unique business processes of more than 25 industries, including high tech, retail, financial services, healthcare and the public sector. With subsidiaries in more than 50 countries, the company is listed on several exchanges, including the Frankfurt stock exchange and NYSE under the symbol “SAP.” (Additional information at <http://www.sap.com>)

(*) SAP defines business software as comprising enterprise resource planning and related applications such as supply chain management, customer relationship management, product life-cycle management and supplier relationship management.

Any statements contained in this document that are not historical facts are forward-looking statements as defined in the U.S. Private Securities Litigation Reform Act of 1995. Words such as “anticipate,” “believe,” “estimate,” “expect,” “forecast,” “intend,” “may,” “plan,” “project,” “predict,” “should” and “will” and similar expressions as they relate to SAP are intended to identify such forward-looking statements. SAP undertakes no obligation to publicly update or revise any forward-looking statements. All forward-looking statements are subject to various risks and uncertainties that could cause actual results to differ materially from expectations. The factors that could affect SAP's future financial results are discussed more fully in SAP's filings with the U.S. Securities and Exchange Commission ("SEC"), including SAP's most recent Annual Report on Form 20-F filed with the SEC. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of their dates.

Copyright © 2008 SAP AG. All rights reserved. SAP, R/3, mySAP, mySAP.com, xApps, xApp, SAP NetWeaver and other SAP products and services mentioned herein as well as their respective logos are trademarks or registered trademarks of SAP AG in Germany and in several other countries all over the world. All other product and service names mentioned are the trademarks of their respective companies. Data contained in this document serve informational purposes only. National product specifications may vary.

Note to editors:
For free video content about SAP, please log onto www.thenewsmarket.com/sap to preview and request video. You can receive broadcast-standard video digitally or by tape from this site. Registration and video is free to the media.

For customers interested in learning more about SAP products:
Global Customer Center: +49 180 534-34-24
United States Only: 1 (800) 872-1SAP (1-800-872-1727)

For more information, press only:
Scott Behles, SAP, +1 (917) 494-2009, scott.behles@sap.com, PST
Rachel Allen, Burson-Marsteller, +1 (415) 591-4041, rachel.allen@bm.com, PST
SAP Press Office, +49 (6227) 7-46315, CET; +1 (610) 661-3200, EST; press@sap.com
Hilmar Schepp, +49 (6227) 7-46799, hilmar.schepp@sap.com, CET
Michael Baxter, Burson-Marsteller, +49 (0) 69 238 09-43, michael.baxter@bm.com, CET

Want to learn more? Contact SAP for more information.

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

2007-10-07T13:51:00.000-07:00

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

Sunday October 7, 3:52 pm ET

SAP and Business Objects to offer the industry's most comprehensive portfolio of business performance and optimization solutions for Business Users for companies of all sizes

WALLDORF, 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 solution for midsized companies, SAP Business ByDesign, SAP can now take the opportunity to focus on the industry's next high-growth opportunity, by accelerating and enhancing our efforts for the Business User category," Kagermann, said.

Headquartered in Paris, France Business Objects is widely recognized as the pioneer of the business intelligence (BI) software category. Today, Business Objects is the world's leading BI software company with solutions spanning the information discovery and delivery, information management, analysis and performance management categories for more than 44,000 customers around the globe.

"Business Objects helps companies transform the way they work through the use of intelligent information," said Bernard Liautaud, Chairman and Founder of Business Objects. "The combination of Business Objects and SAP means that we can truly amplify the reach of Business Intelligence -- from the C-suite to Main Street. John Schwarz and I are excited to see the innovation and hard work of our employees and partners validated and soon extended by the portfolio, domain expertise and presence of SAP."

Transaction expected to be accretive to SAP's earnings per share on a U.S. GAAP basis in 2009 and beyond

SAP and Business Objects plan to exploit additional revenue opportunities and leverage potential synergies. Additional details regarding specific product, go-to-market and other executional details will be provided after the transaction is complete. Neither company intends to undertake significant restructuring as a result of the transaction.

The closing of the transaction is expected within the first quarter of 2008. On that basis SAP expects the transaction to be accretive to SAP's earnings per share on a U.S. GAAP basis in 2009 and beyond; however, due to acquisition-related one-time effects in 2008 SAP expects the transaction to be dilutive by mid single digits euro cents to SAP's 2008 earnings per share on a U.S. GAAP basis.

Business Objects to Operate Stand-Alone; Companies to Share Executives, Resources
The two companies announced that Business Objects will operate as a stand- alone business as part of the SAP Group. Business Objects customers will continue to benefit from open, broad and integrated business intelligence solutions -- independent of databases and applications - while also gaining the advantage of application alignment for business analytics. Business Objects will significantly enhance its Business Intelligence portfolio scope and capacity with SAP people, know-how and networks.

SAP said that the expertise and solutions from Business Objects would be complimentary to offerings SAP already provides for Business Users -- including, for example, category leadership in Governance, Risk and Compliance; business intelligence in the SAP platform; as well as corporate performance management capabilities - including those recently added through tuck-in acquisitions from OutlookSoft and Pilot Software.

When the transaction is complete, John Schwarz will continue as the CEO of the Business Objects entity and is expected to become a member of the SAP Executive Board. Doug Merritt, Corporate Officer, Business User, SAP, will then join the Business Objects entity and report to John Schwarz. Subject to the closing, SAP's Supervisory Board intends to propose to elect Business Object founder Bernard Liautaud to the SAP Supervisory board at the company's next shareholders meeting. Until that time, Liautaud will have an advisory role to Henning Kagermann on aspects of strategy and integration.

Tender Offer Details and Disclosure Information

The transaction is to take the form of a tender offer under French law and a parallel tender offer under US law for all Business Objects shares and all American Depositary Shares representing Business Objects ordinary shares (the "ADS"), as well as all convertible bonds issued by Business Objects (the "Convertible Bonds") and all warrants issued by Business Objects (the "Warrants"). The price to be offered per convertible bond will be euro 50.65. 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 offers will only be opened for acceptances once the French stock exchange authority, the Autorite des marches financiers (AMF), and the French Finance Ministry have granted their respective clearances. The offers will be subject to the following conditions: (i) Business Objects securities tendered in the offers represent at least 50.01 % of all voting rights on a fully diluted basis and (ii) receipt of EU and US antitrust approvals.

The complete offer documents in accordance with French and US law will be submitted, together with further details of the offer, to the French financial services authority, Autorite des marches financiers (AMF), and the US Securities and Exchange Commission (SEC).

Goldman Sachs acts as financial advisor to Business Objects; Deutsche Bank Securities Inc. acts as financial advisor to SAP.

Additional Information

The tender offer for the outstanding ordinary shares, the Convertible Bonds and the warrants of Business Objects has not yet commenced. This press release is for informational purposes only and is not an offer to buy or the solicitation of an offer to sell any Business Objects securities. The solicitation and the offer to buy ordinary shares of Business Objects, the Convertible Bonds and the warrants will be made only pursuant to an offer to purchase and related materials that SAP and its subsidiary intend to file with the SEC on Schedule TO. Business Objects also intends to file a solicitation/recommendation statement on Schedule 14D-9 with respect to the tender offer.

Business Objects stockholders and other investors should read the Tender Offer Statement on Schedule TO, the Schedule 14D-9 as well as the Note d'Information and the Note en Reponse to be filed by SAP carefully because these documents will contain important information, including the terms and conditions of the tender offer.

Business Objects stockholders and other investors will be able to obtain copies of these tender offer materials and any other documents filed with the AMF from the AMF's website (amf-france.org) or with the SEC at the SEC's website at www.sec.gov, in both cases without charge. Materials filed by SAP may be obtained for free at SAP's web site, www.sap.com. Materials filed by Business Objects may be obtained for free at Business Objects' web site, www.businessobjects.com.

Stockholders and other investors are urged to read carefully all tender offer materials prior to making any decisions with respect to the tender offer.

Press Conferences in Frankfurt and Paris

SAP and Business Objects senior management will host parallel joint press conferences in two locations to discuss the transaction:

in Frankfurt on Monday, October 8th at 3pm CET, 9am EST, and 6am PST (location: Japan-Center, Conference Center, 1st floor, Taunustor 2, 60311 Frankfurt am Main, Germany, http://www.taunustor.de/); dial in number: +1 480 629-9564 (US), +44 207 190 1596 (UK), +49 695 8999 0701 (Germany). Replay number: +1 303 590-3030 (US), +44 207 154 2833 (UK); Replay passcode: 3792655. The Frankfurt press conference will be webcast at www.sap.com/press,

in Paris on Monday, October 8th at 3pm CET, 9am EST, and 6am PST (location: Hotel de Meurice, Paris); dial in number: +1 334 323 6201 (US), +44 207 162 0025 (UK), +33 17099 3208 (France). The Paris press conference will be webcast at http://wcc.webeventservices.com/view/wl/r.htm?e=95765&s=1&k=7CFDD62292014C7EA5B7220DD5D79C66&cb=genesys

Investor and Financial Analyst Conference Call

The press conferences will be followed by a joint investor and financial analyst conference call at 4 pm CET, 10 am EST and 7 am PST (Dial in number: +1 480 293-1744 (US), +44 207 190 1232 (UK), +49 695 8999 0706 (Germany)). Replay number: +1 303 590-3030 (US), +44 207 154 2833 (UK), Replay passcode: 3792656.

The financial analyst conference call will be webcast at www.sap.com/investor

About SAP

SAP is the world's leading provider of business software*. More than 41,200 customers in more than 120 countries run SAP® applications-from distinct solutions addressing the needs of small and midsize enterprises to suite offerings for global organizations. Powered by the SAP NetWeaver® platform to drive innovation and enable business change, SAP software helps enterprises of all sizes around the world improve customer relationships, enhance partner collaboration and create efficiencies across their supply chains and business operations. SAP solution portfolios support the unique business processes of more than 25 industries, including high tech, retail, financial services, healthcare and the public sector. With subsidiaries in more than 50 countries, the company is listed on several exchanges, including the Frankfurt stock exchange and NYSE under the symbol "SAP." (Additional information at http://www.sap.com)

About Business Objects

Business Objects has been a pioneer in business intelligence (BI) since the dawn of the category. Today, as the world's leading BI software company, Business Objects transforms the way the world works through intelligent information. The company helps illuminate understanding and decision-making at more than 44,000 organizations around the globe. Through a combination of innovative technology, global consulting and education services, and the industry's strongest and most diverse partner network, Business Objects enables companies of all sizes to make transformative business decisions based on intelligent, accurate, and timely information. Business Objects has dual headquarters in San Jose, Calif., and Paris, France. The company's stock is traded on both the Nasdaq (BOBJ) and Euronext Paris (ISIN: FR0004026250 - BOB) stock exchanges. More information about Business Objects can be found at www.businessobjects.com.

Forward-Looking Statements

This release contains forward-looking statements that involve risks and uncertainties concerning the parties' ability to close the transaction and the expected closing date of the transaction, the anticipated recommendation by the Business Objects Board of the transaction to shareholders, the anticipated benefits and synergies of the proposed transaction, anticipated future combined operations, products and services, and the anticipated role of Business Objects, its key executives and its employees within SAP following the closing of the transaction. Actual events or results may differ materially from those described in this release due to a number of risks and uncertainties. These potential risks and uncertainties include, among others, the outcome of regulatory reviews of the proposed transaction, the ability of the parties to complete the transaction (including SAP's ability to tender successfully for at least 50.01% of all voting rights on a fully diluted basis), the impact on minority shareholders who do not tender into the offer, the failure to retain key Business Objects employees, customer and partner uncertainty regarding the anticipated benefits of the transaction, the failure of SAP and Business Objects to achieve the anticipated synergies of the proposed transaction and other risks detailed in Business Objects' SEC filings, including those discussed in Business Objects' quarterly report on Form 10-Q for the quarter ended June 30, 2007, which is on file with the SEC and available at the SEC's website at www.sec.gov. Business Objects is not obligated to update these forward-looking statements to reflect events or circumstances after the date of this document.

Any statements contained in this document that are not historical facts are forward-looking statements as defined in the U.S. Private Securities Litigation Reform Act of 1995. Words such as "anticipate," "believe," "estimate," "expect," "forecast," "intend," "may," "plan," "project," "predict," "should" and "will" and similar expressions as they relate to SAP are intended to identify such forward-looking statements. SAP undertakes no obligation to publicly update or revise any forward-looking statements. All forward-looking statements are subject to various risks and uncertainties that could cause actual results to differ materially from expectations. The factors that could affect SAP's future financial results are discussed more fully in SAP's filings with the U.S. Securities and Exchange Commission ("SEC"), including SAP's most recent Annual Report on Form 20-F filed with the SEC. Statements regarding the expected date of closing of the tender offer, and expected integration, growth and improved customer service benefits are forward-looking statements and are subject to risks and uncertainties including among others: uncertainties as to the timing of the tender offer, the satisfaction of closing conditions, including the receipt of regulatory approvals, whether certain industry segments will grow as anticipated, the competitive environment among providers of software solutions, and difficulties encountered in integrating companies and technologies. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of their dates.

Any statements contained in this document that are not historical facts are forward-looking statements as defined in the U.S. Private Securities Litigation Reform Act of 1995. Words such as "anticipate," "believe," "estimate," "expect," "forecast," "intend," "may," "plan," "project," "predict," "should" and "will" and similar expressions as they relate to SAP are intended to identify such forward-looking statements. SAP undertakes no obligation to publicly update or revise any forward-looking statements. All forward-looking statements are subject to various risks and uncertainties that could cause actual results to differ materially from expectations The factors that could affect SAP's future financial results are discussed more fully in SAP's filings with the U.S. Securities and Exchange Commission ("SEC"), including SAP's most recent Annual Report on Form 20-F filed with the SEC. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of their dates.

For more information, press only:

Herbert Heitmann, SAP, +49 (6227) 7-61137, herbert.heitmann@sap.com, CET
Christoph Liedtke, SAP, +49 6227 7-50383, christoph.liedtke@sap.com, CET
Frank Hartmann, SAP, +49 (6227) 7-42548, f.hartmann@sap.com, CET
Marge Breya, Business Objects, +1 408 953-6092, marge.breya@businessobjects.com, PST
Philippe Laguerre, Business Objects, +1 33 (1) 41 25 38 15, plaguerre@businessobjects.com, EST

For more information, financial analysts only:
Stefan Gruber, SAP, +49 (6227) 7-44872, investor@sap.com, CET
Martin Cohen, SAP, +1 (212) 653-9619, investor@sap.com, EST
Edouard Lasalle, Business Objects, +33 (1) 41 25 24 33, edouard.lassalle@businessobjects.com, CET
Nina Camara, Business Objects, +1 (408) 953-6138, nina.camara@businessobjects.com, PST

Note to Editors

Broadcast-standard video content about SAP is available at www.thenewsmarket.com/sap. Registration on the site and video is free to the media.

(*) SAP defines business software as comprising enterprise resource planning and related applications such as supply chain management, customer relationship management, product life-cycle management and supplier relationship management.

SAP, R/3, mySAP, mySAP.com, xApps, xApp, SAP NetWeaver and other SAP products and services mentioned herein as well as their respective logos are trademarks or registered trademarks of SAP AG in Germany and in several other countries all over the world. All other product and service names mentioned are the trademarks of their respective companies. Data contained in this document serve informational purposes only. National product specifications may vary.
Source: SAP AG

SAP launches Business Process Expert Community for Corporate Performance Management (CPM)!

2007-09-26T06:51:00.000-07:00

Dear citizens of the Corporate Performance Management world,

Welcome to the new Corporate Performance Management area on BPX at https://www.sdn.sap.com/irj/sdn/bpx-cpm! SAP has made significant recent investments in the Corporate Performance Management space with our acquisitions of Pilot Software and OutlookSoft and reseller agreement with Acorn Systems, and interest in these solutions is exploding. With these moves, it was crucial for us to develop an open community for everyone to participate, and the BPX Community for Corporate Performance Management is open in more ways than one. It is open to those offering new ideas on product deployment, new developments, and innovations and it is open to those looking for new answers to their questions. It doesn’t matter if you are a customer, partner, or an SAP employee, you can find a wealth of information here: tips and tricks, demos, FAQs, how-to-guides, and collaborative forums. We provide the platform, but the community belongs to YOU and is for YOU to shape and make your own.

With this in mind, I would like to invite you to send your ideas, tell us your opinions, and share your practical experience to make this the most vibrant on-line community of CPM practitioners in the world. It's easy to submit your articles or write blogs for this area, too! While those of us from SAP will be frequently contributing to this site, ultimately, it is YOU who can provide the most value to your fellow BPX community members based on YOUR experience. If you need help, or have suggestions for improving this area, please do not hesitate to contact us and we will be more than happy to assist you!

I am certain that you will find this to be a valuable resource and look forward to working with all of you to make the CPM area in BPX and the corresponding forums both vibrant and successful!

Best Regards,

Nenshad Bardoliwalla
Vice President Solution Management
Corporate Performance Management Products

Informatica Strikes OEM Agreement With SAP AG

2007-08-02T16:42:00.000-07:00

SAP has long been accused of being "closed" and "proprietary" with many facets of our technology including our Business Intelligence and Performance Management capabilities. The statement I always used to hear before I joined SAP is that NetWeaver BI was "only good for SAP data". It never quite made sense to me, at least the way it was phrased, because SAP data is no different than non-SAP data. Our software runs on the most common relational database technologies including Oracle, Microsoft, and IBM's offerings, and uses tables, fields, and standard data types just like any other packaged software product. And sure enough, when I got here, it became readily apparent that, as much as we would like customers to be "all SAP", nobody here thinks this is realistic!

Our market research has proven that companies increasingly rely on SAP NetWeaver as the integration platform even across highly heterogeneous environments. For example, today there are already 70% of SAP NetWeaver BI customers integrating between 25% - 40% of non-SAP data, in many cases even up to 70% of the data being sourced outside of SAP systems. That being said, there are a lot of innovations that a company dedicated to data integration with a track record of excellence can really add that augment our core capabilities. Therefore, we are really happy to announce this partnership with Informatica, who has always provided fantastic data integration capabilities and has long been recognized as a market leader in this space. The added capabilities will further the flexibility for data integration while considerably lowering cost of integration, specifically in the case of integration of heterogeneous information infrastructures.

With a combination of our existing BI technology with tens of thousands of installations, new innovations like Business Intelligence Accelerator, and key capabilities being augmented by market-leading partners like Informatica, I am certain we will continue to observe the dramatic uptick in customer deployments that we are seeing today.

You can read the press release below:

Informatica Strikes OEM Agreement With SAP AG
Leading Enterprise Software Vendor Will Embed Cornerstone Informatica Products Into Key Software Offerings

REDWOOD CITY, Calif., July 23, 2007—Informatica Corporation (NASDAQ: INFA), a leading provider of data integration software, today announced that it has entered into an OEM relationship with SAP AG (NYSE:SAP), the world's leading provider of business software.
Under the terms of this OEM agreement, SAP will embed Informatica's market-leading PowerCenter, PowerExchange and Metadata Manager software into SAP® performance management and analytic applications and the SAP NetWeaver® platform for master data management and business intelligence. By incorporating Informatica's products into its applications, SAP will now be able to offer customers the ability to better integrate and track data from non-SAP, third-party and legacy systems.

"With the continually increasing fragmentation of corporate data, there is more need than ever before to integrate, transform and manage corporate information effectively," said Paul Hoffman, executive vice president, Informatica Corp. "Our OEM relationship with SAP will help ensure that customers have access to Informatica's best-in-class software to connect their business data – regardless of the source – into their SAP business applications."

"This agreement with Informatica will enhance and extend SAP's business solutions and allow our customers to access this best-in-class technology to further SAP's goal: driving unparalleled visibility and management across an enterprise," said Nimish Mehta, senior vice president, Enterprise Information Management, SAP. "With this agreement, both our existing and new customers will benefit as Informatica and SAP work closely together to deliver world-class enterprise software to an ever-increasing customer base."

Webcast Alert - Tom Davenport and Nenshad Bardoliwalla on Optimizing Corporate Performance for Competitive Advantage

2007-07-22T19:01:00.000-07:00

I just wanted to drop a quick note to let you know that I have the privilege of conducting a webcast with Tom Davenport this week on Wednesday, July 25, 2007 at 1:00 PM EDT and welcome any of you to join. For those of you who have not had the privilege of hearing Tom speak, he holds the President's Chair in Information Technology and Management at Babson College and is responsible for the overall management of the Institute for Process Management. His recent book, Competing on Analytics: The New Science of Winning, is a tour de force on how leading companies have been able to establish a strategic advantage against their competitors by using analytic technologies. Besides being very erudite, Tom is an excellent speaker with great stories and a wittiness that is not necessarily the hallmark of academic scholars. I hope you'll enjoy it!

Webcast Details

Optimizing Corporate Performance for Competitive Advantage
Date: Wednesday July 25, 2007 Add to Outlook
Time: 1:00 PM ET Convert to your timezone
Speakers include:
Nenshad Bardoliwalla, Vice President, Corporate Performance Management Solution Management, SAP
Tom Davenport, Author

As most leading companies seek to drive maximized corporate performance by applying greater analytical rigor to their business processes, performance gaps are being minimized, if not eliminated, allowing companies to fully capitalize on the value of the cross section of their internal and market information. At times, the breakdown of their faulty decisions can be attributed to faulty data and data assumptions, poor communication and collaboration -- therefore, performance gaps are now under siege as leading edge companies adopt broad capabilities for enterprise-level business analytics and intelligence.

Join thought leader and author Tom Davenport and VP of Solution Management for Corporate Performance Management products at SAP, Nenshad Bardoliwalla, for an interactive discussion on best practices and approaches that are driving agility and competitive advantage in organizations today.

In this one-hour event you will hear how to:
• Start an iterative corporate performance management initiative
• Formulate a base line from which to define corporate goals
• Drive adoption of corporate goals throughout the organization
• Ensure plans and budgets are linked to strategic goals
• Provide information to any stakeholder in time and context
• Provide management and statutory reporting

SAP acquires OutlookSoft and launches the Next-Generation of Corporate Performance Management solutions

2007-06-30T14:27:00.000-07:00

I've been quiet since we (SAP) acquired Pilot Software, and for good reason. In the three months since we brought Pilot into our fold, we proceeded to announce a global reseller arrangement with Acorn Systems for their profitability management software, and then extended our leadership in offering solutions to the Office of the CFO with our acquisition of OutlookSoft, a market visionary who has been establishing the next-generation of Corporate Performance Management solutions for the last seven years. With Pilot and OutlookSoft in our portfolio, and with our strategic reseller agreement with Acorn, there is no question that SAP has completely leapfrogged the market in delivering the next-generation of Corporate Performance Management solutions. Moreover, when taken together with our market-leading and defining ERP solution, and the visionary Governance, Risk, and Compliance unit we established last year with the acquisition of Virsa, it becomes apparent how we are now the only vendor to offer a Unified Financial Management solution. At SAPPHIRE 2007, our CEO, Henning Kagermann spelled out this vision very clearly, as shown in this diagram below:

In future posts, I will hopefully have the chance to articulate the overarching principles of our Office the CFO strategy and how our Corporate Performance Management strategy supports this, but those of you who are interested, you can watch the presentation given by Adam Thier and myself at SAPPHIRE Vienna 2007, which spells it out in great detail. As I had the chance to lead our due diligence of OutlookSoft, I want to take this opportunity to point out what we saw in OutlookSoft that made it so compelling for SAP and our customers.

The first aspect of OutlookSoft that we found compelling was unification. The entire performance management experience is driven by the same metaphors and metadata, regardless of whether or not one is conducting planning, budgeting, and forecasting, legal or management consolidation, or building financial reports. For ALL of these processes, the dimensional model is the SAME. The business rules are the SAME. The user-experience is the SAME. This dramatically reduces the TCO of the solution and makes it much simpler to design performance management processes that span the entire value chain of an organization, and not make customers pay a penalty if they want to expand beyond planning to management consolidation to financial reporting.

This is in stark contrast to the offerings of our competitors, like Oracle's Hyperion System 9, for example, which is a patchwork of dozens of acquisitions that are almost completely unintegrated across the same set of processes. The only thing integrated about System 9 is the fact that you you can get all of this disparate technology on the same DVD. Ok, that's not entirely true, it does share "common security" and a "common installer", which a few customers probably find compelling. When you use Hyperion Planning, it relies on the ancient and soon-to-be legacy technology of Essbase, a proprietary, decade-old multidimensional engine that has severe scalability issues due to its inability to handle sparse data and time-consuming cube recalculation times. Do you want to write a formatted financial report off of your Hyperion Planning data? You need Hyperion Financial Reporting. Do you want to slice and dice your Hyperion Planning data? You need Hyperion Web Analysis. Contrast this with OutlookSoft, where the EXACT SAME APPLICATION is used for financial reporting, slice-and-dice, and planning, with none of the hassles of having multiple reporting applications and legacy multidimensional databases to maintain.

And don't even THINK you can get any economies of scale by introducing consolidation capabilities into your existing Hyperion Planning landscape. For that, Hyperion licenses a SEPARATE application, Hyperion Financial Management, which is COMPLETELY DIFFERENT from Hyperion Planning. Same database? Nope. Same metadata? Nope. Same dimensional structure? Nope. Sames business rules definition? Nope. Want to bring together your actual and plan data? You do the same thing with Hyperion's own applications as you would do to port data between two applications from completely separate vendors: you move the data over using a flat file! Contrast this with OutlookSoft, where the EXACT SAME APPLICATION is used for consolidation, with the same database, same metadata, same dimensional structure, same business rules, etc. with none of the hassles of having multiple reporting applications and legacy multidimensional databases to maintain.

Now, to be fair, Oracle has proven itself astute in reconciling its large technology assets before, and that is likely to be true here as well. So Hyperion's mediocre BI tools, like Web Analysis, Financial Reporting, Interactive Reporting, and Production Reporting, that are crucial to extracting any value out of their disparate applications are almost certainly not going to live very long. With the Siebel acquisition, Oracle declared that Siebel Analytics would become the de facto BI offering (although I still don't think the Discoverer and Daily Business Intelligence teams have seen the memo yet), and this offering was re-christened Oracle BI EE 10g. And what does that mean for Hyperion's customers? It means that Hyperion customers can look forward to having to replace all of the Business Intelligence investments they made with the Hyperion tools and migrate to the Oracle BI EE 10g tools, and having yet another set of metadata, business logic, and architectural headaches to worry about. But that's not the worst of it. It has never been a secret that Oracle's database team has held the development power within the company, and they have invested a lot of energy into building up the Analytic Workspaces for multidimensional functionality within the most recent versions of the database. Given the fact that the database team rules the roost and is one of the only area of the company besides the M&A group that is still trying to innovate after Oracle's decision to turn from software company into technology holding company, it would be very surprising to see Essbase live more than a year or two, which means that Hyperion customers can also look forward to a forced migration to Oracle's Analytic Workspaces technology. After all, Oracle may provide"Applications Unlimited", but they never said anything about "Middleware Unlimited", so there is no guarantee about the life of acquired middleware products, and inexplicably, Hyperion is part of the middleware group at Oracle. I don't know about you, but any company that thinks the same group that develops the java application server should also be responsible for statutory consolidation capabilities for IFRS probably doesn't understand CPM that well. But I digress. This blog is about OutlookSoft and SAP, and why OutlookSoft's unification is so valuable for customers. That should be readily apparent now.

Another aspect of OutlookSoft that customers find incredibly compelling is its very strong usability. In looking at every CPM vendors offerings, we found that OutlookSoft far and away had the most usable applications, with powerful, patented functionality that could really extract the full value of Microsoft Office, well beyond what anyone else had been able to accomplish in the industry. With OutlookSoft, end-users can leverage their entire skill set with Microsoft Excel without having to suffer from the constraints of other vendors add-ins. ALL formatting, formula operations, and commentary, etc. capabilities can be used in Excel, while still maintaining the value proposition of a centralized performance management environment on a common database. Every other tool in the market is either "Excel-like" or "Excel-lite", placing unnecessary constraints on the users that frustrate them to no end. What's the point of giving end-users the appearance of Excel when they can't use the full power of the solution?

At this point, Oracle probably has 10-15 Excel front-end clients, many of which they acquired from Hyperion. Essbase had an Excel-client (historically one of the best in the industry), HFM had one, Hyperion Planning had one, and other applications had them as well. For many years, these multiple Excel clients didn't even work with each other. The idea then to unify all of these Excel-clients manifested itself with SmartView, which came out a couple of years ago. SmartView was a great idea, since there would finally be one Excel client for all Hyperion applications. It only had one problem: it provided the lowest common denominator of functionality across all the individual Excel plug-ins. Much of the power of the Essbase Excel add-in could not be achieved, so customers were left in a lurch. Of course, now things should be much easier for Oracle customers, since Oracle BI EE 10g, which will become the BI tool of choice for Hyperion applications, also has its own lousy Excel add-in. In stark contrast, as mentioned before, OutlookSoft has one Excel add-in, and it's way better than anything else out there.

A third aspect of OutlookSoft that is incredibly compelling is the notion of business process flows. While the dinosaur, monolithic architectures of previous generations of performance management solutions have enforced process siloes, what companies really want is the ability to manage the entire performance management cycle holistically in a process framework. OutlookSoft allows you to do exactly that. With prepackaged Business Process Flows for monthly budgeting, management consolidation, legal consolidation, CapEx planning, Workforce Planning, etc., the entire set of roles, dimensional entities, input schedules, etc. are all packaged together and can be orchestrated across the entire organization. Financial analysts can see exactly where the organization is in terms of who is in what step of a process, and end-users know exactly where they came from, where they are, and where they have to go next in the performance management process. This is a huge differentiator and something that none of our competitors do. Hyperion has been talking about adding comprehensive, suite-wide workflow capabilities to its disjointed collection of applications for years, but so far, it's still talk.

Finally, because OutlookSoft did not have to invest in stapling a large portfolio of mediocre, acquired products together, they were able to invest heavily in modern technology like Service Oriented Architecture to provide a high degree of flexibility and interoperability with other applications. For example, in the Business Process Flows capability of OutlookSoft, ANY web service that has a standard interface exposed by a WSDL can be consumed so that end-users can stitch together composite application processes using standards-based technology. Contrast this with the architectures of our competitors, who still use CORBA and decade-old MOLAP technologies as their underlying architectures and you can understand very quickly why our technology is vastly superior.

Of course, technology for its own sake has little value when it comes to business applications, and it is clear that OutlookSoft's architecture confers upon customers huge business advantages. With OutlookSoft's SOA approach, business processes can be reconfigured on the fly by taking advantage of the underlying application services available to give customers the agility they need in an environment that changes on a dime. By avoiding a pure reliance on legacy MOLAP technology, OutlookSoft can aggregate information from any level of a dimensional hierarchy, so you can see the impact of changes to your models made deep at the leaf level in the application reflected at a much higher aggregate level without having to go through the expensive and time-consuming process of recalculating cubes.

But OutlookSoft is only the end of the first chapter of our story. As we combine it with the deep profitability modeling capabilities provided by Acorn and the visionary strategy management capabilities of Pilot, and then intertwine it with the Governance, Risk, and Compliance functionality that SAP has pioneered, the end-results far surpass the depth and breadth of both vision and functionality of any other CPM vendors in the space. When combined with SAP's Business Process Platform, defined as the combination of the deep application functionality provided by our market-leading Business Suite and the enterprise class technology backbone of SAP NetWeaver, we will be the only vendor in the industry to offer BOTH the empowerment and flexibility that finance end-users need for performance management along with the enterprise class backbone that IT organizations have come to rely on.

The Next Generation of Corporate Performance Management solutions for the Finance Professional of 2010 is here. Judging from the response of our customers and more interestingly, that of our competitor's customers, it is clear that they recognize the value, innovation, and vision of what SAP is delivering, and this is only the beginning! Please contact me to learn more.

SAP brings strategy to everyone - "Web 2.0" style

2007-02-20T08:42:00.000-08:00

A picture says a thousand words, so I thought I would begin my post with one. It's official, SAP acquired Pilot Software last week, and you can read the press release here: SAP Strengthens Leadership in Analytic Applications Market with Acquisition of Pilot Software. Pilot's flagship application, PilotWorks, is highly interactive and has the visually engaging user experience you see above and below:

So what does PilotWorks do? It's an integrated system for delivering the goals, metrics, and initiatives to every person in an organization to help align them to the overall strategy. What we loved about the application as we got to know it better is how incredibly flexible it is. It is completely methodology agnostic. If you want to use the Kaplan and Norton Balanced Scorecard methodology, you can, but any of a number of other performance management methodologies are supported as well.

The view above is a drilldown on a scorecard. Note how refined the performance management concepts are: the use of qualitative AND quantitative metrics, classification of metrics as leading or lagging, are but two examples of a team that really understands performance management and has gleaned this knowledge by listening to how their customers need to use software to meet their business needs.

So why the "Web 2.0" moniker in the title? One of the features that really distinguishes this software from others is its highly collaborative nature. Threaded discussions, annotations, and operational reviews all allow workers to participate in the evolution of their organizations' strategies, not just be a victim to them. This is the secret sauce that turns the strategy that the management team crafts into something that is relevant and interesting for their employees.

While we were enamored with the technology, we were even more impressed with the team. These are a group of top notch industry veterans who really take pride in their work and it shows, and the fact that they are all nice people to work with makes it even better. Pilot's former CEO, Jonathan Becher, has a bookshelf stacked with books on performance management topics, and he has read all of them, but he also has a very pragmatic and approachable take on the topic. His blog, Management By Walking Around, is well worth a read to understand what performance management really could be like in your organization and what benefits you can hope to achieve. Many of the developers have multiple decades of experience on the cutting edge of OLAP technology which has given them the platform to build really powerful analytic applications like PilotWorks.

Overall, we think this acquisition will be the launching pad for our very serious aspirations to become a leader in the performance management space, and the industry analysts, press, and our competitors have most definitely noticed. John Hagerty of AMR, one of the most respected voices in this space, noted about the acquisition that, "the products look very promising and fit well into SAP’s articulated vision"in his article today. Over the next few months, there will be a lot more to say, but 2007 is definitely the year that SAP takes it up a notch in this market.

SAP is the market leader in Analytic Applications!

2006-11-06T11:28:00.000-08:00

It is with great delight that I announce what we have known for quite some time internally: SAP is the market leader in Analytic Applications according to IDC. To further extend our leadership, we also announced the GA of our xApp Analytic composites, which allow customers for the first time to realize the promise of combining transactional and analytical information in the context of a business process to facilitate decision-making.

In parallel with this announcement, we also had two announcements on the infrastructure side: on the BI platform side, entitled SAP Reports Significant Market Share Gain in Business Intelligence, which details the great improvements we’ve made on the infrastructure side and our customers’ successes with NetWeaver BI 2004s and NetWeaver Business Intelligence Accelerator, and on the MDM side, entitled SAP Leads Product Information Management Market Worldwide, that articulates SAP’s leadership in the Product Information Management market. From the combination of these announcements, it should be clear that SAP is clearly serious about the Business Intelligence and Performance Management market and have numerous customer successes to prove it.

Existing Oracle Customers Get More Confused: When should they use Sunopsis, Oracle Warehouse Builder, Informatica, or Ascential?

2006-10-11T11:38:00.000-07:00

Oracle announced that it would be acquiring Sunopsis, a data integration vendor with solid products. Well, you can't fault Oracle for giving their customers choices! Existing Oracle customers already had THREE SEPARATE ETL tools that they had to use with Oracle products even BEFORE this acquisition:

existing ETL technologies of Oracle Warehouse Builder which they just made a big deal about how they had enhanced significantly in their latest release. Guess it couldn't have been THAT good.
existing OEM relationship they have with Informatica that they inherited from Siebel Analytics.
existing OEM relationship they have with Ascential that they inherited from PeopleSoft.

And now, Sunopsis. So for Oracle customers who owned PeopleSoft HCM, and Siebel CRM, and Oracle ERP, what should they use for their data integration needs? Contrast this with SAP, who has pursued an organic growth strategy and has one set of data integration tools for our applications across the entire enterprise. NetWeaver Business Intelligence includes sophisticated ETL capabilities that support analytic applications in every major horizontal: CRM, HCM, FIN, SCM, SRM, and PLM. With over 12,000 installations, and referenceable customers in every vertical we must be doing something right.

So, thank you, Oracle for continuing to give customers a reason to take the Safe Passage to SAP. We look forward to you acquiring even more companies that overlap directly with your existing assets and continue to confuse your installed base.

Does SAP really provide a Data Warehouse that requires no tuning or aggregates?

2006-10-11T11:27:00.000-07:00

Mark Rittman, one of the sharpest minds in the Analytics and Business Intelligence space, had this to say about my previous post on SAP's Business Intelligence Accelerator: "Neshan Bardolliwalla (sic) talks about SAP's new in-memory BI accelerator that requires no tuning or need to build aggregates (as my son says, "yeah...right.")" It is hard to believe for those of us who have been in this industry for a while, but it is absolutely true. Here is an excerpt from my response to Mark which I posted as a comment on his website.

While I am not at liberty to disclose the detailed internals of the product, consider that a 64-bit computer can address 16 exibytes of memory. So, if you were take your ENTIRE data warehouse at its MOST granular level, without ANY aggregates whatsoever, put it in main memory, index that data, and then use clever on-the-fly search techniques to locate that data, you could most certainly eliminate the need for aggregates or any tuning whatsoever. I’ve seen it with my own eyes, and yes, I didn’t believe it when I heard it either.

With today’s technology and Moore’s law continuing to operate, the need for disk-based database systems will continue to become less relevant as memory-based systems become cheaper to exploit and algorithms continue to be developed that allow one to search the addressable space of memory that a 64 bit processor is capable of addressing.

To put this into perspective, to get the same performance that BIA provides from an RDBMS vendor would cost about TEN TIMES as much.

SAP's BI Accelerator - The future is in memory-based data warehouses

2006-09-20T20:58:00.000-07:00

Well, the cat is finally out of the bag. Renee Boucher Ferguson, an excellent reporter at eWeek, broke the story last month about how SAP was moving to use in-memory technology in our BI Accelerator product. In an article in yesterday's edition of eWeek, she interviews Shai Agassi about the implications of this technology for data warehouses and even systems that need transactional storage.

The BI Accelerator is an amazing piece of technology that has become very popular very quickly among SAP's NetWeaver BI customers. Imagine a scenario where there is no query tuning or aggregate building in your data warehouse. Ever. The entire data warehouse at the most granular level is stored in addressable memory and indexed in such a way that performance is blindingly fast. We have seen unbelievable performance gains using this technology, and I'm excited by the possibilities of where we at SAP will continue to push the boundaries of what can be done with it.

Oracle's inability to focus and execute in BI

2006-04-25T10:13:00.000-07:00

Dan Everett is a sharp guy who I had the privilege of working with when I was at Hyperion Solutions. I was pleased to hear that he recently jointed Ventana Research. In his analysis of Oracle's recent BI announcement, he makes the following comment:

Oracle's BI focus has been inconsistent in the past - making major announcements
and looking to generate revenue from BI one year, but in the next, making no
announcements and offering BI as a loss leader to generate database revenue.

I couldn't have said it better myself. Oracle has been dabbling in BI for more than a decade, but aside from their excellent database, has never executed in this space in any other part of the BI stack. History has shown over and over again that no matter how good their acquired products may be, if the champions of those products are not the ones with the political influence to ensure their viability, then Oracle will squash them for the products that were developed in house.

Contrasting Oracle's BI "Strategy" with SAP's BI Strategy

2006-04-05T10:42:00.000-07:00

I was very pleased to see some great coverage today on SAP's Analytics and BI Strategy in the following article by Stephen Swoyer in Enterprise Systems: SAP Speaks Softly, but Carries a BIg Stick.

"For example, last month Oracle announced its first-ever Oracle Business Intelligence Suite product, which incorporates analytics capabilities Oracle acquired from the former Siebel Systems Inc. In promoting its new business intelligence (BI) suite offering, Oracle took the fight right to the BI pure-plays, arguing—in effect—that its ERP, database, and applications experience functioned to give it an especial insight into BI. "

"SAP could credibly make the same claim—perhaps even more so than Oracle. But the German ERP giant’s strategy has instead been content to quietly flesh out its own Netweaver-based BI stack, even as it downplays its own ambitions in the broader business intelligence marketplace."

I think Stephen was being very polite. Oracle's BI "strategy" is to make a big public proclamation to disguise the fact that they are throwing a huge bunch of products with disparate architectures, development teams, roadmaps, etc. into one big frying pan and hoping that their customers will get an Analytics omelette, when they are more likely to get salmonella.

How exactly does one "Fuse" the following products for each of the applications stacks that Oracle now possesses?

If you own Oracle applications, your BI and Analytics stack might include:

Front-End: Oracle Daily Business Intelligence and Oracle Discoverer
ETL: Oracle Warehouse Builder
Data Warehouse: Oracle 10g

If you were a PeopleSoft customer, your BI and Analytics stack might include:

Front-End: Crystal and/or SQR for Formatted Reporting
ETL: First Informatica PowerMart, then Ascential DataStage
Data Warehouse: PeopleSoft EPM

If you were a Siebel Business Analytics customer, your BI and Analytics stack might include:

Front-End: Siebel Business Analytics for OLAP and Actuate for Formatted Reporting
ETL: Informatica PowerCenter
Data Warehouse: Siebel Relationship Management Warehouse

What a mess! I don't even know what the J.D. Edwards folks had, but it probably was different from the other three. So is Oracle going to consolidate all of these and somehow derive value for their customers in the process? And they are offering lifetime support for all of the existing products? It seems more likely that Oracle is going to do what Oracle has always done best historically, which is to extract value from its customers at their expense. Do you think Siebel Business Analytics customers are going to continue using Informatica for the long haul? Do you think PeopleSoft customers will continue to use Ascential for the long haul? Do you think Actuate figures into Oracle's long term plans? It took Oracle all of a few weeks to rip out IBM's hosting of Siebel's OnDemand offering and replace it with their own, so I'm sure they'll be happy to concede revenues for their slow growth database business to their acquired companies' erstwhile partners.

Let's contrast this with SAP's NetWeaver BI stack and SAP Analytics. If you are an SAP customer, here is what you get with SAP NetWeaver BI (and we don't charge you extra for it either):

Front-End: BEx Suite - Integrated front-end tools for both Excel and web-based business intelligence. SAP Analytics - highly useable and flexible Analytical Applications targeted to specific roles in specific business processes.
ETL: SAP NetWeaver BI provides a highly functional ETL stack, with change data capture, trickle-feed capabilities, and advanced data lineage capabilities. Think it's only for SAP data sources? We have reference customers who use it strictly for non-SAP data.
Data Warehouse: SAP NetWeaver BI includes a full-featured ROLAP engine and a plethora of preconfigured relational cubes that customers can leverage out of the box to speed up deployment.

We at SAP like to do right by our customers and use this as our means of acquiring more of them. If you look under the covers, you will find us to offer a complete BI and Analytics stack capable of competing with anyone in the market. And it was built in house. And it runs on one stack, NetWeaver. Just don't expect us to host a four hour webcast to prove it. You can just ask the customers who chose us as their trusted partner, not whom we bought from someone else.

SAP Business Community for SAP xApp Analytics

2006-03-13T18:47:00.000-08:00

Thanks to all of you who have written so enthusiastically and asked for further information about SAP xApp Analytics. SAP Business Community is offering a dedicated area specifically for SAP Analytics. You'll benefit from the following:

Webcasts & Online Demos
View Webcast replays, download slides, and read transcripts from presentations about SAP Analytics. Plus, view a demo and see how your employees can use SAP Analytics to make smart decisions, take fast action, and achieve strategic goals.

Discussion Forum
Participate in interesting and informative discussions, ask questions, and share advice about SAP Analytics.

Blogs
Hear from SAP Executive Board members, who offer insight into why analytics are crucial to addressing today's challenges and to capitalizing on tomorrow's opportunities.

Brochures & White Papers
Read brochures and white papers that offer more detail about SAP Analytics, including an IDC white paper "Making Business Processes Dynamic by Embedding Intelligence".

News & Articles
This section features the most recent SAP press releases and news stories that provide meaningful information on SAP Analytics.

More Information on SAP Analytics
Learn more about SAP Analytics and its features & functions, business benefits, and more.

The Value of High Impact Visualization with SAP Analytics

2006-02-20T17:58:00.000-08:00

I'm out here this week at TDWI in Las Vegas and had the opportunity to attend Stephen Few's excellent presentation on "Designing Charts to Enlighten". Stephen is an expert in data visualization and really does a great job of helping business presenters to think about how to simplify data visualization by approaching it as an act of explicit design with the intent of delivering the right message to its recipients. For example, I would not have thought of this, but even something as simple as line types (thick versus thin) can convey the importance of the elements they represent. He offers a number of examples of better versus worse design principles on his website which are well worth checking out.

This bring up the more important point of the value of the quality of visualization in general and it is particularly pertinent to my current employer. SAP has long been associated with many positives in software industry in terms of comprehensiveness of functionality, industry-specific business process logic, etc., but the visuals of our UI were never really a focus of our efforts until very recently. This has given our software the reputation of being very difficult to use, and it's well-earned. It is an incredible shame from a business standpoint that SAP offers some of the most comprehensive application functionality on the planet, yet many customers have refused to use the functionality because they don't find it user-friendly.

I'm happy to say that we are starting to really "get it" however and have made and will continue to make a lot of improvements in our software via the paradigm of what we call "user-centered design". You can read about it at the SAP Design Guild, which is a great resource for UI designers. Of specific note to BI however, is that we realized that customers had so much valuable SAP data in their existing environments that they would love to be able to distribute to a MUCH wider-variety of folks. I'm not talking about the users who know the difference between a "dimension" and a "measure" or who want "multidimensional slice and dice with unbalanced hierarchies." We and a number of our partners already have great tools for this type of user.

But what nobody else in our industry aside from SAP is offering are analytical applications geared towards the common business user, the folks who really don't know and don't care to know about "dimensions" and "measures". But what they do understand are intuitive visualizations like charts and gauges, and they definitely understand their business processes. If they could be provided with applications that fused analytical content with the operations they perform in their transactional systems in a highly intuitive way, wouldn't they be far more productive? We think so, and this is the promise of our analytical applications, SAP Analytics.

Check out the application below, which we lovingly refer to as the "Blocked Order List":

This is an analytical application for a credit manager. As part of her job, she has to decide whether customers whose credit is exceeeded should be allowed to have their orders go through. See any "dimensions" or "measures"? See a separate "report tab" and an "action-link" back to the transactional system to actually conduct the transaction? No! It's all here, right on this screen. All the analytical and transactional data that the credit manager needs to make a good business decision appears in a very user-friendly manner along with three buttons that actually allow her to make the decision right there on the spot. How much training do you think it would take any credit manager to use this application? How about five minutes? And yet, how much better would her decisions be if she actually made them with this information right at her fingertips? This is the power of our analytical applications, and we are only getting started.

If you are tired of developing or having your staff develop reports that sit in people's inboxes or on their portal screens or even worse, are never used at all, then you owe it to yourself to check out SAP Analytics!

Introducing SAP Analytics - Process-Based, Composite Analytical Applications

2005-12-06T10:32:00.000-08:00

Dear Readers,

I must apologize for not blogging in a whole month. A lot has changed in that time! I am pleased to share with all of my readers that I have recently joined SAP Labs, LLC as Director, Solution Marketing for SAP Analytics and am very excited to share some of what we are doing with you.

What is SAP Analytics? SAP Analytics is a suite of composite applications built on the SAP NetWeaver platform to enable seamless integration of analysis, transactions, and collaborative steps across the entire value network. For as many years as I was a consultant, I wondered why reporting, OLAP, analysis, etc. were disconnected from the CRM and ERP applications that business users worked on all day. If I were a sales rep working on my pipeline, couldn't I do a much better job if I had access to aggregated, analytical information with important sales KPIs in the same place that I kept my opportunity list? Wouldn't I be more likely to take the appropriate action, like moving my high value deal with a high close probability to the top of my priority list, if I had this rich insight right in front of me?

This is the premise of SAP Analytics. While no one questions the value of a stand-alone report or ad hoc analysis conducted using a BI tool, we believe that it can be even more valuable to the business users to gain analytical insight at the exact moment when they need it the most: at the point where they make their decisions. So, in keeping with NetWeaver and Enterprise Services Architecture, we're breaking down the traditional functional application barriers between ERP and CRM and BI and CPM, and giving business users the opportunity to use the most relevant, actionable analytical information we can provide them in the form of composite applications. Take a look at one of the screenshots below of a category promotion analysis application:

The graphical richness and interactivity of SAP Analytics is provided by our partnership with Macromedia (now Adobe), where we are leveraging the rich internet applications technology of their Flex product line. Even cooler, these applications can be constructed very easily by business users using the model-driven approach of our Visual Composer technology.

I will be writing about these technologies and many other things in much more detail in the coming months. I look forward to sharing more with you. In the meanwhile, I encourage you to take a look at the following link on the SAP.com website to learn more:

http://www.sap.com/analytics

Best Regards,

Nenshad Bardoliwalla

Automated Methods of Semantic Reconciliation of Structured Enterprise Data Sources

2005-11-05T20:03:00.000-08:00

One of the biggest difficulties in building enterprise-wide data warehouses is assembling logical models of entities sourced from the data within ERP/SCM/CRM/BPM schemas, where the same entity (e.g. customer, product, employee) exists in multiple locations. In any given corporation, there are extraordinarily few, if any, individuals who know the details of more than one of the underlying schemas. For example, I may know where the customer data in a Siebel CRM system is held, but I would not have any idea where this is held in Oracle Financials or SAP R/3. To enable BI application construction where data is sourced from multiple transactional systems, vendors will have to lower the barrier to building an enterprise-wide information model, otherwise I don’t believe it will be adopted. The paper below discusses the challenges in accomplishing this, which are substantial, but there is tremendous room for innovation here that is necessary to make enterprise-wide performance management feasible.

An excellent article from ACM Queue discusses some recent research in this area that shows some promise for making this crucial task much easier:

Making heterogeneous schemas play nicely together has challenged computer
scientists for years, but we're on the path to better behavior.

Reconciling the vocabularies of different data sources is also the subject of the thesis by Dr. AnHai Doan which won the 2003 ACM's Prestigious Doctoral Dissertation Award. It's a fascinating read.

Semantic Unification of Business Information Systems

2005-10-30T15:58:00.000-08:00

Business Information Systems continue to grow increasingly powerful as we become better at being able to represent the various types of information in the enterprise. The walls between performance management, content management, knowledge management, and business process management, will continue to crumble in the next couple of years as enterprises realize the strategic value of developing information models that leverage all of these technologies to form rich information tapestries within which the fabric of good decisions can be woven. Whether one considers a relational or multidimensional database, all the documents in a content management system, all of the data being passed through web services, or the trillions of web pages available, it seems obvious that there is value in developing semantic models that can unify the understanding of this data across these various domains.

While there is a lot of research and implementation of techniques of semantic integration of metadata stored in relational databases used by performance management vendors (e.g. CWM, or the Common Warehouse Metamodel), there is definitely a renewed interest in standards-based metadata representations of web content, leading to the "semantic web". Naveen Balani presents a very thorough overview of the semantic web that is well worth reading in his article on IBM's Developer Works entitled, "The future of the Web is Semantic".

The Semantic Web provides a common framework that allows data to be shared and reused across application, enterprise, and community boundaries. You can think of the Semantic Web as an efficient way to represent data on the World Wide Web, or as a database that is globally linked, in a manner understandable by machines, to the content of documents on the Web. Semantic technologies represent meaning using ontologies and provide reasoning through the relationships, rules, logic, and conditions represented in those ontologies.

The difference between a "Scorecard" and a "Dashboard"

2005-10-24T19:50:00.000-07:00

With the release of Hyperion System 9, we've provided a single workspace environment for any user to engage in Performance Management activities, including working with both dashboards and scorecards. Unfortunately, I frequently hear our customers and prospects get confused on the difference between them, so I thought I would take a moment to clarify the difference.

When running any business, it is important to understand the historical and current drivers of success. A dashboard provides a window into the historical and current drivers of success by providing a navigable, interactive environment in which KPIs can be explored to uncover the detailed root causes of the existing business situation. Furthermore, dashboards provide a link to other operational information for further insight.

A Dashboard in Hyperion System 9

In Hyperion System 9, our dashboards provide:

Associations. Allows authorized end-users associate objectives, metrics, targets, and initiatives with each other.
Multiple Targets. Allows users apply two or more targets and associated thresholds to each metric, including forecasts, budgets, prior actuals, and external benchmarks, among others.
Groupings. Allows authorized end-users categorize objectives, metrics, and initiatives by different perspectives.
Guided Navigation. Uses steps to guide less experienced users through the data or analysis by limiting the drill down/across paths and providing context-sensitive recommendations for next steps (i.e. reports to see or actions to take).
Dynamic Views. Allows users to define and subscribe to new views of “right-time” data coming from one or more operational systems.
Advanced Analysis. Allows users perform “what if” analysis to model scenarios and perform regressions to improve the accuracy of forecasts, among other things.

Of course, any well-run business will not be focused on the past, but also care deeply about the future. What should the business goals be? What strategies should we use to achieve those goals? What metrics should we use to help us indicate whether we are on the right track? A scorecard is a framework for aligning corporate goals, the strategy used to achieve those goals, and the measurement of those goals. In other words, it is a forward-looking vehicle that can be used to drive the performance of the business.

A Scorecard in Hyperion System 9

In Hyperion System 9, our scorecards provide:

Support for Kaplan and Norton's Balanced Scorecard Methodology, Stern Stewart's Integrated EVA Scorecard, and the Malcolm Baldridge frameworks
Strategy, Cause-and-Effect, and Accountability Mapping
Alerting when KPIs exceed established thresholds
Initiative Tracking
Performance Reporting

A scorecard or dashboard implementation can be very valuable to a business, but as you can surmise from the above, they are particularly powerful when used together. Having a window into the past, present, and future performance of your business is a clear strategic advantage, which is why Performance Management technologies are at the top of every executives mind these days.

Simple Semi-Structured Data

2005-10-17T16:34:00.000-07:00

This is an excellent article by David Loshin on the value of what he terms "semi-structured data". I've seen this term being used to describe a wide variety of data, including raw HTML, XML, etc., but I think that Loshin captures a more precise and hence useful definition.

"There is an intermediate classification of content called “semi-structured data.” This refers to sets of data in which there is some implicit structure that is generally followed, but not enough of a regular structure to “qualify” for the kinds of management and automation usually applied to structured data. We are bombarded by semi-structured data on a daily basis, both in technical and non-technical environments. For example, web pages follow certain typical forms, and content embedded within HTML often have some degree of metadata within the tags. This automatically implies certain details about the data being presented. A non-technical example would be traffic signs posted along highways. While different areas use their own local protocols, you will probably figure out which exit is yours after reviewing a few highway signs."

"This is what makes semi-structured data interesting—while there is no strict formatting rule, there is enough regularity that some interesting information can be extracted. Often, the interesting knowledge involves entity identification and entity relationships. " This doesn't sound a lot different than classic ERD modeling or relational data warehouse modeling. With existing pattern recognition techniques, I wonder how difficult it would build a generic parser across semi-structured and structured data that could come up with composite entity models across multiple information domains?

How to handle deleted records from a source system in a data warehouse?

2005-10-16T20:29:00.000-07:00

Question from comp.databases.olap USENET group:

I would like to see if someone can share their experience in handling deleted records from legacy source system in data warehouse. I don't see much coverage on this topic in Kimball literatures on how to handle this in ETL and model design. Did I miss something?

My response:

Hi Doug,

This is an excellent question. In my experience, the event of deleting records can be a very valuable source of information about a business process, and thus, it is very useful to capture the event in the data warehouse. I have typically handled this by adding a DELETED column to the fact or dimension table that stores a value of Y or N (or 0 or 1) for deleted versus valid records.

Then, from the end-user tool, during query execution, you can modify your query criteria to check for records that are marked deleted versus valid. To ensure adequate performance, make sure that the DELETED column is indexed using the appropriate technique for your database. In Oracle DBs, low cardinality columns like this are usually retrieved most efficiently by using bitmap indexes.

Note that for auditing purposes, this method works very well, because the underlying integrity of the systems are not challenged by using flags to mark deleted records. It is entirely possible to see the deleted records with the appropriate query.

Good Luck,

Nenshad

Under the Radar: Get Yourself Together! All that floating data needs some structure.

2005-10-13T15:12:00.000-07:00

Another great post by Jeff Nolan (surprise, surprise). There is no question that there is a great interest in mining unstructured data, but its a vast space in terms of breadth and depth. For example, just because one can do text search across e-mails, PDFs, PPTs does not mean that one can easily facilitate searching audio, video, and other richer media types. More importantly, there are massive privacy implications for this type of unstructured data mining. Do you want your manager knowing what web pages you visited, what PDFs you read, what audio and video you downloaded? How do I separate that which I want indexed versus that which I do not?

More importantly, I think that unstructured data will have to be searched with structured data using some kind of unified metaphor. Yes, it's true that I have a hard time finding the right e-mail, PDF, PPT, etc., but what's even more frustrating is that I can't link these to existing corporate information assets, like my CRM system, or ERP system, or BPM system. I'm still waiting for the company that understands that what is necessary is an information model that can span structured data like RDBMSs, Multidimensional Databases, and XML data stores and can model the relationships between these entities and unstructured data. When I want a 360 degree view of the customer, I want one information system that understands the relationship between the customers service requests, open opportunities, e-mail correspondence, sales presentations, etc., and can give me a real-time barometer of the health of my relationship with them and more importantly what I can do to improve my relationship with them down the line.

Companies would be willing to pay A LOT for this kind of technology. Maybe I can get SAP Ventures to fund my next startup idea. :)

Hyperion Debuts Industry's First and Only Comprehensive Performance Management Solution: Hyperion System 9

2005-10-11T21:44:00.000-07:00

So the cat is finally out of the bag and I can talk about it publicly. Hyperion System 9 is finally here! System 9 is the industry's first Business Performance Management System. What does that mean?

Well, business performance management, or corporate performance management as it is defined by Gartner, "includes the processes used to manage corporate performance (such as strategy formulation, budgeting and forecasting); the methodologies that drive some of the processes (such as the balanced scorecard or value-based management); and the metrics used to measure performance against strategic and operational performance goals." (Gartner Research, "Corporate Performance Management Applications Explained, October 4, 2005).

How is this different from Business Intelligence? Business Intelligence, as envisioned by Howard Dresner, who coined the phrase, probably would not be much different from Business Performance Management if it evolved along the route that he expected it would. However, what Business Intelligence has wound up becoming is the manifestation of reporting taken to its logical extreme. State of the art pure-play Business Intelligence tools allow end-users to format and layout reports in any way imaginable. They also allow for data exploration using the established techniques pioneered by OLAP vendors.

However, a report in and of itself is hardly valuable without a notion of the process with which it is attached to. And a process in and of itself is hardly valuable without an understanding of the goals of the organization. And the goals of an organization remain ephemeral if they are not operationalized in the form of strategic, operational, and tactical plans. So Business Performance Management software attempts to provide a closed-loop, management decision-making infrastructure that builds upon Business Intelligence technologies but applies it as part of a structured management methodology, such as that formalized by the discipline of Management Accounting.

How does System 9 meet the Business Performance Management mandate? We'll dive into the details in an upcoming set of posts. In the meanwhile, there is a ton of new information on http://www.hyperion.com/.

Data Visualization, just a flash in the pan?

2005-10-11T11:13:00.000-07:00

Dan Linstedt has very interesting and progressive ideas on Business Intelligence visualization, an area I have spent a lot of time researching and working on. In this excellent article, Dan talks about the tension between applying really cutting edge technologies versus end-users reluctance to use them.

The most interesting quote: "It's funny, we say business needs to drive technology, true. But sometimes business doesn't know what's possible until technology says: Hey, look at me, this is a new way of thinking - do you have a use?" I want to explore this theme in a future post, but it's time to head to the airport!

Good Morning Silicon Valley: Reader arrives weakly

2005-10-10T23:57:00.000-07:00

Good Morning Silicon Valley is a really funny, offbeat look at what is going on in the Wild West. This article examines the new Google Reader, an RSS aggregator.

I set up a number of feeds by hand to test it out, and for a beta, it works pretty well, but of course it's far from perfect. As others have noted, it is a bit slow to load up, and I have gotten some strange javascript errors. That being said, I think that the approach of releasing software in beta and continually refining is definitely the way to go. Repeated customer feedback will shape the tool far more effectively than any developers or product marketers sitting in their cubicles discussing what they think "the market" wants.

This is one huge advantage of web-based software. You have the flexibility to do this. It is much more difficult when the customer owns the hardware, pays an IT staff for maintenance, and of course, when the application is mission critical, like a financial consolidation system. Still, I think there are principles from this type of development methodology that are certainly worth adopting for the larger companies that sell packaged software.

MDX Solutions : with Microsoft SQL Server Analysis Services 2005 and Hyperion Essbase

2005-10-10T09:39:00.000-07:00

MDX Solutions : with Microsoft SQL Server Analysis Services 2005 and Hyperion Essbase

I just wanted to give a quick plug for George Spofford et al's MDX Solutions 2nd Edition. I work with George at Hyperion Solutions, and besides being a wonderful guy, he has phenomenal depth in understanding both Analysis Services and Hyperion's Essbase. What's great about the book is that he provides a number of interesting comparisons between the two technologies. For example, the book shows comparisons in how the same use case is addressed slightly differently in the MDX that is specific to each product. I hope the book does really well.

MySQL 5.0

2005-09-28T12:33:00.000-07:00

I just read that MySQL 5.0 is now available from Jeff Nolan's excellent SAP Ventures Blog. It is pretty impressive. Stored procedures/functions, triggers, views, archive storage, and a data dictionary start to make this look like a real enterprise-class player. Open Source software continues to make impressive in-roads into the enterprise software market. I wonder whether it is ready to be the engine of an enterprise-size data warehouse.

Combine MySQL with the emerging products proliferating from a number of open-source BI vendors (e.g., Pentaho, BIRT, OpenI), and you start to question why customers would want pay large amounts of money for most of the same functionality they can download off of SourceForge. I don't think we're quite there yet, but two years from now, the major players are going to have to come up with products of demonstrably higher value than what they offer now if they hope to compete with where Open Source BI software is going.

Web 2.0

2005-09-27T15:55:00.000-07:00

Web 2.0 is currently one of the hottest topics amongst the technology cognoscenti. Tim O'Reilly has been promoting this idea for some time, and I love reading his thoughts and those of his colleagues at the O'Reilly Radar blog (http://radar.oreilly.com/). This slide is a really nice summary of many of the ideas, and I think it's influence will be increasingly felt across all software vendors, including those in the enterprise space.

A Compendium of Improvisational Guitarists Deserving Wider Recognition

2005-09-27T14:31:00.000-07:00

This was originally posted to rec.music.makers.guitar.jazz about a year ago:

Dear friends,

Through the amazing resource that is this newsgroup and my own exploration, I've discovered many wonderful improvisational guitar players that I had never heard of before over the last year. I navigated to a lot of websites, listened to the clips, and wind up buying the CDs of many artists who I felt had a very distinguishable, personal voice. My own proclivities tend towards very modern guitar music, so artists that would fall under the "fusion" or "avant-garde" labels have a very strong representation in this list. However, there is no shortage of players on this list who can burn on "Joy Spring" or "Countdown" with the best of 'em.
I have no affiliation with any of these artists, other than to respect them for devoting their lives to an art form and instrument I cherish. I hope this list will offer many of you the chance to experience the thrill of discovering someone you never heard of previously.
If there are other artists that you believe are deserving of wider recognition, please add to this thread along with a link to their websites, and we can generate some interest in the work of our brethren.

Best Regards,
Nenshad Bardoliwalla

Adam Rogers http://www.crisscrossjazz.com/artist/RogersAdam.html
Andrew Cheshire http://www.users.voicenet.com/~joule/cheshire.html
Prasanna http://www.guitarprasanna.com/
Alex Skolnick http://www.alexskolnick.com/
Andre Bush http://www.andrebush.com/
Brad Shepik http://www.bradshepik.com/
Bruce Arnold http://www.arnoldjazz.com/
Bruce Eisenbeil http://www.eisenbeil.com/
Dan Faehnle http://www.danfaehnle.com/
John Catler http://microtones.com/
Dave Creamer http://www.davecreamer.com/
Dave Fiuczynski http://www.torsos.com/
Gene Bertoncini http://www.genebertoncini.com/
David Gilmore http://www.dgilmore.com/
David Torn http://www.splattercell.com/
Derek Bailey http://www.shef.ac.uk/misc/rec/ps/efi/mbailey.html
Henry Kaiser http://www.henrykaiser.net/
Brad Buethe (Fog) http://www.enigmaterial.com/jazz/jh2003/jh03_buethe1.html
Fred Fried http://www.fredfried.com/
Fred Frith http://www.fredfrith.com/
Nels Cline http://nelscline.com/
Liberty Ellman http://www.libertyellman.com/
Jackie King http://www.jackieking.com/
James Blood Ulmer http://www.geocities.com/BourbonStreet/Quarter/7055/Ulmer/Disko-ulmer.htm
James Emery http://www.james-emery.com/
Jay Azzolina http://www.jayazzolina.com/
Joe Morris http://www.joe-morris.com/
John Stowell http://www.johnstowell.com/
Shawn Lane http://www.shawnlane.com/
Jonathan Kreisberg http://www.jonathankreisberg.com/ Khabu Doug Young http://www.dkmjf.net/ducret.htm
Lorne Lofsky http://www.lornelofsky.com/
Chuck Underwood (Mantra) http://www.phillipsmusic.net/chuck/
Marc Ducret http://www.screwgunrecords.com/page_a.php?pageid=collaborators&sub=ducret
Michael Coppola http://www.9string.com/
Mike Moreno http://www.mikemoreno.com/
Mordy Ferber http://www.mordyferber.com/
Tisziji Munoz http://www.tisziji.com/tisziji/Default.htm
Neil Haverstick http://www.microstick.net/
Ron Affif http://www.fantasyjazz.com/html/affifrbio.html
Sheryl Bailey http://www.sherylbailey.com/
Sid Jacobs http://www.sidjacobs.com/
Steve Cardenas http://www.stevecardenasmusic.com/
Sylvain Luc http://alexandre.lacombe.free.fr/
Pete McCann (Mahavishnu Project) http://www.mahavishnuproject.com/
Tim Cummiskey http://www.tc7string.com/
Vic Juris http://www.steeplechase.dk/steeplechase/query.cgi?query=Juris&category=artist
Wayne Krantz http://www.waynekrantz.com/
Willie Oteri http://willieoteri.com/

Why software sucks - scottberkun.com

2005-09-20T21:35:00.000-07:00

Scott Berkun has written a terrific book, the Art of Project Management, published by O'Reilly. His frank take on "Why software sucks (and what to do about it)" should be read by anyone in the industry.

My daughter sucking her thumb...in utero!

2005-09-20T20:14:00.000-07:00

Technology is just unbelievable. Cari Jaquet, a really great gal whom I work with at Hyperion, was sweet enough to give my wife and I a gift certificate to 3D Baby Vu so we could check out what our daughter was going to look like. The procedure is very similar to any other ultrasound, except that they have this very advanced visualization technology that allows you to see the baby in all his/her glory. So this is one of the first pictures of our little girl, three months before she makes her debut. Well, hopefully three months! I'm not sure we're quite ready for her yet.

An Introduction to Nenshad

2005-09-20T17:31:00.000-07:00

Hi, my name is Nenshad, and I'm finally joining the blog world. I have no idea how much I will get to write on a weekly basis, but I figured I would give it a shot. I have a huge diversity of interests: Aesthetics, Artificial Intelligence, Audio Engineering, Comparative Religion, Composition, Cognitive Psychology, Cognitive Science, Computer Science, Consciousness, Databases, Evolutionary Psychology, Expert Systems, Fuzzy Logic, Data Mining and Data Visualization, Developmental Biology, Economics, Entrepreneurship, Guitar, Information Architecture, Jazz, Mathematics, Neural Networks, Operating Systems, Philosophy of Science, Physics, Social Psychology,Statistics,Support Vector Machines, Technology Product Strategy, Zoroastrianism.

I'm a Senior Product Marketing Manager at Hyperion Solutions, Inc., in Santa Clara, California. My focus is Business Intelligence technologies, although I have worked on a lot of intersecting enterprise software technology areas as well, especially CRM, thanks to my erstwhile employer, Siebel Systems, Inc. I'm also soon to be a dad in December 2005. I am really excited and pretty frightened at the same time, but I think that is natural. Finally, I am an avid musician, although you wouldn't know it from my practice habits these past few years. I've played guitar and percussion for over twenty years and even foolheartedly recorded a jazz CD where I played all of the instruments myself.

I will try to touch on many of them at various times in my blog's evolution. Comments, especially those of the inciteful variety, are welcomed. Let's get this show on the road.