2. David Cook Managing director of Performance Management Solutions at Information
Builders, is responsible for the strategic direction, delivery, and marketing of
performance management products. He designed, developed, and leads the
Performance Management Framework product team.
David has spent more than 20 years at Information Builders designing and
creating new business intelligence (BI) products – including early PC/FOCUS,
Cactus, Developer Studio, ERP Solutions, WebFOCUS – and he was a founding
member of the EDA/SQL Division, which later became iWay Software.
Prior to joining Information Builders, he was an Information Center consultant
and developer at a major West Coast bank, where he first encountered FOCUS.
3. Table of Contents
1 Executive Overview
2 Why You Need an Independent Performance Management Layer
4 What Makes a Best-of-Breed Performance Management Solution So Important?
4 The Challenges of a Multi-Vendor Approach
5 The Problems With Mega Vendors
7 Bridge the Gap Between Finance and Operations
9 What to Look for in Performance Management Technologies
10 Information Builders’ Performance Management Framework
12 Conclusion
4. Executive Overview
No performance management strategy can be completely effective without support from
underlying technology. When a company pursues performance management, it must find
a single, unified solution that can meet all its requirements and deliver a holistic view of
performance across the enterprise by easily accessing any metric from any source – without
compromise. The solution should remain completely independent of back-end transaction
systems used to collect and analyze data. This ensures the ongoing integrity of the environment
– no matter how diverse the back-end systems – and also maximizes corporate agility as
applications and strategies change.
Use any portal
Independent Layers Without Bias
or media
delivery device
Independent Layer
Metrics are all
treated equal.
Methodology
flexibility
Independent Performance Management Layer
Analysis with
data from any
source
Independent Analytic Applications Layer
Holistic
integration
framework
Independent Integration Layer
ERP CPM CRM HRM ERM Legacy Excel
Source Source Source Source Source Source Source
While performance management has historically focused on the financial aspects of a business,
many of today’s leading performance indicators are in operations. As a result, functional managers,
senior executives, and finance professionals are demanding new and innovative capabilities. Their
various needs cannot be met by common-denominator systems created by mega vendors.
Today’s organizations require a best-of-breed performance management platform. Information
Builders’ Performance Management Framework (PMF) is a powerful, comprehensive solution that
facilitates the effective, efficient management of both financial and operational performance
across an entire enterprise. In this paper, we:
■ Discuss why it is so critical to implement an independent performance management layer in
your technology environment
■ Investigate the specific drawbacks of both a multivendor and mega vendor approach to
performance management
■ Analyze a key issue with some of today’s most popular performance management systems – an
inability to effectively address the different needs of varied audiences within a company
1 Information Builders
5. Why You Need an Independent Performance
Management Layer
Mega vendors have done a great job of convincing potential buyers that purchasing everything
from a single provider is best. They claim that enterprise resource planning (ERP), customer
relationship management (CRM), financial performance management (FPM), and other back-end
systems, as well as business intelligence (BI) and performance management (PM) solutions, should
all be acquired from the same company. However, leading industry analysts and other experts
agree that this option is not the best for end users. It may also contribute to low adoption rates
and the failure of performance management projects.
The truth is, in order to run effectively, companies need a variety of transaction systems. They
need “vertical” applications to create a record of all activities specific to the nature of their core
operations. For banks, it could be the opening and closing of accounts. For hospitals, it could be
the scheduling of surgeries and other procedures. For manufacturers, it could be the ordering of
parts and components or the production of finished goods.
Non-Independent ERP Vendor Bias
ERP Vendor Portal
Vendo Port
Vendor Portal
ndor ortal
ERP Vendor Perf Mgmt
Vendor Perf Mgmt
Vendo
ndor g
Out of scope
ERP Vendor Analytics
Vendo Analy
Vendor Analytics
ndor nalyti
Out of scope
ERP Vendor Integration
Vendor Integration
Vendo Integ tion
ndor ntegra
Out of scope
ERP SCM CPM CRM ERM Legacy Excel
Source Source Source Source Source Source Source
Companies also need “horizontal” transaction systems that enhance basic administrative activities,
such as accounting, human capital management, call-center operations, or sales and marketing.
No single technology vendor can fulfill all these needs. Companies must work with multiple
vendors, each possessing expertise in certain sectors or business processes, to acquire the best
solutions and ensure the smoothest, most efficient operations possible. Therefore, every system
architecture, regardless of the type and size of the company that maintains it, will include various
systems designed and developed by different vendors. There is also constant change in the source
and mix of back-end systems as companies merge and are acquired. It is unreasonable to expect
only one vendor across all systems.
2 Performance Management Without Biases
6. To maximize performance management effectiveness, the right metrics must be established,
organized to best align with corporate goals, and communicated to stakeholders across
and beyond the company so they understand their roles and expected contributions. Most
importantly, the tracking and monitoring of progress towards the goals most pertinent to
corporate strategy must span the entire operation. Information should be collected and analyzed
from all back-end systems and delivered via dashboards that provide an accurate and holistic, yet
balanced view of performance.
This can only be accomplished when the performance management solution is an independent
layer within the environment, and not tied specifically to any back-end system or set of systems.
This not only ensures that performance is managed from the most unbiased position possible, it
makes the environment more agile and adaptable to changes in objectives or strategies.
3 Information Builders
7. What Makes a Best-of-Breed Performance Management
Solution So Important?
When choosing an independent layer to support their performance management environment,
many companies face the challenge of finding the best solution available. There are several
options. They can piece together various solutions from specialty vendors to create a single
performance management environment, purchase an all-encompassing performance
management application from a mega vendor, or select best-of-breed performance management
systems for the different areas of their business. While each approach offers some benefits, the
first two are likely to create significant problems.
Non-Independent CRM Vendor Bias
CRM Vendor Portal
CRM Perf Mgmt
Out of scope Out of scope
CRM Analytics
Out of scope Out of scope
CRM Integration
Out of scope Out of scope
ERP SCM CPM CRM ERM Legacy Excel
Source Source Source Source Source Source Source
The Challenges of a Multi-Vendor Approach
Many organizations believe that the only way to achieve true enterprise-wide performance
management is to piece together various point applications developed by smaller niche or
specialty vendors. Numerous different solutions that address distinct pieces of the performance
management technology puzzle are acquired from separate vendors and deployed. Companies
that take this approach are likely to face significant challenges, including:
Lack of Integration
Disparate point solutions require complex integration in order to work seamlessly as a single,
cohesive environment. Systems need to be tied together – a task that can be time-consuming and
expensive, draining both financial and human resources. In fact, IDC estimates that the process
of merging disparate technologies to create a unified, multi-vendor technology environment can
add as much as a year to deployment and rollout.
4 Performance Management Without Biases
8. Functionality Gaps
Without a single, broad-reaching solution to facilitate end-to-end performance management, key
capabilities are likely to be missed. Important features will be unintentionally forgotten and gaps
will exist, only to be discovered after the environment is in place and user needs aren’t being met.
Poor Flexibility
A key ingredient to effective performance management is agility. When multiple systems
and solutions are pieced together to create the foundation to support related activities, the
flexibility that is so critical to success will be seriously hindered because many of the factors that
contribute to performance management are highly dynamic. For example, market conditions
evolve, competitors shift strategies, or customer demands change. Often, these changes require
adjustments to goals and metrics as well as to the activities that support their attainment. When
multiple solutions are supporting the management of objectives, any strategy changes will
require in-depth modifications to each individual system – a task that can take weeks, or even
months to complete.
Inconsistency
An environment made up of multiple systems created by different vendors will ultimately lead to
inconsistencies across the organization. Data-access techniques, front-end interfaces, and other
elements will vary greatly from one solution to the next, adding a level of complexity to the
infrastructure that will likely have a negative impact on performance management activities.
Additional Maintenance
It will be quite difficult for IT teams to keep a performance management environment current and
optimized when there are multiple solutions to take into consideration. Each component of the
solution will come with its own maintenance and upgrade schedule, requiring already overworked
technical professionals to juggle these activities to ensure that each individual system is up-to-date.
Lack of Accountability
Vendors rarely want to admit when their solutions don’t perform as promised. When a
performance management solution is created by piecing together different systems, providers
have the opportunity to point fingers at each other when technical problems arise, causing
significant delays in problem diagnosis and resolution.
The Problems With Mega Vendors
Over the past few years, mergers and acquisitions have run rampant in the technology industry. A
market that used to include just a few “super companies” is now made up of dozens. While on the
surface it may appear that choosing a performance management system from one of these mega
vendors is the best approach, working with solution providers of this size can often present even
greater challenges, including:
5 Information Builders
9. Incompatibility
Many performance management solutions offered by mega vendors work only with other
applications in their portfolio. This poses issues for most organizations, since they own and
operate numerous back-end systems built by others. The environment will be difficult to integrate,
and the results will be inconsistent because the information contained in “outsider” systems will
not be measured and monitored with the same level of speed and precision.
Cookie-Cutter Technology
Mega vendors design and develop their performance solutions to meet business needs using
transaction systems from their portfolio. Many companies have unique or specialized needs
and require a holistic system to address them. The majority of mega vendor performance
management systems can’t satisfy out-of-the-ordinary requirements, forcing organizations to
spend extensive time and significant amounts of money customizing the environment.
Acquisition Overload
Today’s mega vendor solutions aren’t born from in-house development efforts or organic growth
– they came to be as the result of a variety of acquisitions of smaller technology firms, with the
goal of broadening their solution suites as quickly as possible. The performance management
systems they sell have likely been pieced together using various solutions they obtained from
other providers, presenting many of the same challenges as creating a multivendor performance
management environment.
Functionality Overkill
Many mega vendors pack their solutions with flashy features. While these capabilities may be
useful to larger organizations, or those that have mature performance management strategies in
place, they probably offer little or no value to smaller or mid-sized firms, or those embarking on
performance management initiatives for the first time. Customers end up paying for functionality
they don’t need and will never use.
Lack of Innovation
Many huge performance management solution vendors offer a wide array of other solutions
– ERP, CRM, and more. With so many offerings to keep up-to-date, these providers are forced
to scatter their development budgets and resources across numerous product lines. They’re
trying to dominate the software industry as a whole, not a specific segment of the market, such
as performance management. Many experts believe that, because of this, the mega vendors
simply can’t act in the same cutting-edge, forward-thinking manner as the smaller, more focused
performance management solution providers.
6 Performance Management Without Biases
10. Bridge the Gap Between Finance and Operations
One of the key issues likely to arise for companies that choose either the multi-vendor or mega
vendor performance management model is the inability to create a single, unified, and cohesive
environment that effectively blends the management of financial and operational performance.
Different groups within an organization oversee these distinct types of performance. Accounting
teams, senior financial managers, and directors manage financial activities. Executives, line-
of-business managers, department heads, and even front-line workers manage operational
performance.
Finance and operational groups rarely see eye-to-eye for a variety of reasons:
■ Different goals. Those who oversee financial performance care only about one thing – the
bottom line. Those who set objectives for operational performance have other achievements in
mind, such as improvements in staff productivity, higher rates of customer satisfaction, long-
term competitive advantage, etc.
■ Conflicting strategic views. Even when the end result is the same – for example, boosting
revenue by increasing customer retention – the means of getting there may be quite different.
■ Past vs. present perspective. Financial executives typically manage performance from a
historical point of view, tracking the outcomes of past activities as they relate to the current
state of an organization’s finances. Business unit managers and others who are concerned with
operational performance are monitoring the activities that affect the state of the business as
they occur.
The current state of the economy is also expanding the performance management requirements
of financial professionals, as they need even greater insight than ever before into costs and
profitability. They must have cutting-edge analytical, statistical, and predictive tools enabling
effective budgeting, planning, forecasting, and consolidation – combined with rigorous reporting
and auditing capabilities – that facilitate compliance with the disclosure requirements of various
governing and legislative bodies.
Stakeholders outside of finance need insight into their objectives as well as detailed information
from across the organization to support the day-to-day decisions they make to achieve those
goals. Metrics and targets, as they relate to core business activities, must be tracked and measured
continuously – a process that requires immediate access to information from any asset, at any time.
John Hagerty from AMR Research agrees, citing the importance of operational process-driven
intelligence in today’s performance management strategies in a recent presentation.
Most importantly, executives who set broad-reaching performance management strategies
must be able to build their plans and share them will all those involved – no matter how many
people or where they are located. This requires flexible authoring tools that make it easy to define
and direct the organization’s strategy, while allowing for related metrics and data to be instantly
distributed to users across the business based on their role in the process.
7 Information Builders
11. Performance management solutions that are not best-of-breed cannot facilitate fast, effective,
information-sharing and collaboration between these three groups. They do not provide the
innovative tools demanded by finance, operations, and executive strategists. As a result, each
group operates without the best-of-breed tools they need. For example, executives set goals, but
cannot clearly share them with the employees who will play the greatest role in reaching them.
Or, those who track financial performance don’t have insight into the key contributing activities,
while those who oversee operational performance don’t always understand what impact their
processes and procedures have on the company’s revenue and profits.
8 Performance Management Without Biases
12. What to Look for in Performance Management
Technologies
There are many performance management systems on the market today. Every vendor touts their
solution as the most powerful, most comprehensive, and most feature rich. How does a company
know which one is really best-equipped to meet all their needs?
A true best-of-breed performance management solution will:
■ Offer a single, fully integrated platform to meet the broadest range of performance
management needs across vertical and horizontal industries and business areas
■ Be independent of any and all back-end transactional applications, providing a holistic,
unbiased, and balanced view of performance across the business
■ Address performance management from both a financial and operational perspective to meet
the needs of financial and line-of-business professionals as well as executives
■ Be flexible and scalable enough to quickly adapt to evolving strategies, dynamic business
conditions, and growth
■ Allow for the monitoring and analysis of any performance data regardless of its source, format, or
location
■ Provide customization capabilities, so individual users in different roles can view performance
data in the way that is most meaningful and relevant to them
9 Information Builders
13. Information Builders’ Performance Management Framework
Information Builders’ Performance Management Framework (PMF) offers best-of-breed
performance management technologies for companies of all types and sizes. PMF is a powerful,
comprehensive, fully integrated solution that allows organizations to effectively manage
performance across their entire enterprise. With PMF, businesses can create a culture that
promotes performance optimization and accountability, from both a financial and an operational
perspective.
This complete, end-to-end platform supports performance management across all levels of a
business by delivering a full suite of robust, innovative features, such as:
■ Unparalleled data-access capabilities. PMF allows for the retrieval and analysis of any data, in
any source or format. This ensures that the performance-related information being tracked is
complete and timely, providing the most accurate and up-to-the-minute view of performance
possible. It also allows companies to consolidate and view both financial and operational data,
so performance can be monitored, measured, and managed from both perspectives. Because it
isn’t tied specifically to any single system or set of systems, PMF delivers a view of performance
that is comprehensive, yet balanced and unbiased.
■ Fully personalized dashboards allow users to adjust their interface, and the presentation of
information, based on their role in the organization. As a result, both financial and operational
professionals can instantly access the performance information they need, when and how they
need it.
■ Exploitation and integration between the different domains of finance, operations, and
management is made possible by delivering best-of-breed capabilities to finance professionals,
front-line workers, and strategy-management executives.
■ Financial reporting and XBRL compatibility provides a single, unified view of financial
performance across a business. Companies can benefit from real-time access and analysis of
any financial data in any system, rapid generation of financial statements and reports, and
instant delivery of that information to investors, creditors, regulatory organizations, and other
stakeholders.
■ Balanced scorecard capabilities improve the way all facets of a business are monitored and
controlled. All stakeholders – from executives to front-line workers – can be involved in the
planning and performance management process, participating in the tracking and attainment
of mission-critical goals and objectives.
■ PMF enables strategy authoring and dissemination, rapid input and publishing of corporate
objectives, and the ability to assign owners to KPIs. Plans, goals, and metrics can be easily
created and communicated to all stakeholders across the business.
■ A variety of advanced business intelligence capabilities, including in-depth analytics, graphics,
visualization, mapping, and geographic features, allow for highly intuitive and visual real-time
tracking and measurement of progress towards mission-critical goals and objectives.
■ A variety of features, such as dynamic alerts, intelligent information delivery, and mobile
capabilities ensure that important performance-related data is always available to the right
people at the right time.
10 Performance Management Without Biases
14. ■ Unmatched scalability, reaching any number of users or user types, anywhere around the world
allows companies to extend their performance management strategies to include external
stakeholders, such as customers, suppliers, and other business partners.
■ The ability to update performance information on the fly allows true, closed-loop performance
management.
■ Integration and balancing of risk and performance is possible through a single system.
Best of all, the Performance Management Framework offers full support for any type of
management methodology. From Six Sigma and activity-based costing, to just-in-time production
and vendor-managed inventory, PMF is powerful and flexible enough to enhance related
performance management activities from start to finish.
Use any portal
Independent Layers Without Bias
or media
delivery device
Independent Layer
Metrics are all
treated equal.
Methodology
flexibility
Independent Performance Management Layer PMF
PMF
M
Analysis with
data from any
source
Independent Analytic Applications Layer
Holistic
integration
framework
Independent Integration Layer
ERP CPM CRM HRM ERM Legacy Excel
Source Source Source Source Source Source Source
11 Information Builders
15. Conclusion
To ensure performance management success, companies must choose a best-of-breed
technology architecture that provides all the needed functionality in a single, fully integrated,
unified framework. Piecing together a multi-vendor environment or purchasing a one-size-fits-all
solution from a mega vendor will fail to deliver the desired results.
A performance management solution must operate independent of any underlying system so
it can collect, aggregate, and analyze performance-related information from any source, in the
most unbiased and balanced way possible. Most importantly, it must deliver performance from
both a financial and operational perspective, to address the needs of all users and facilitate true,
enterprise-wide performance optimization.
Information Builders’ Performance Management Framework is the best-of-breed solution for
companies looking to implement an innovative and comprehensive infrastructure to support their
performance management requirements. From unparalleled data access, dynamic information
delivery, and cutting-edge analytics, to financial reporting, balanced scorecard, and advanced
forecasting, the Performance Management Framework provides organizations with all the features
and capabilities they need to effectively manage financial and operational performance across
their entire business.
12 Performance Management Without Biases
