The document discusses Salesforce's corporate performance, highlighting a significant net income decline and operating loss, alongside mounting operational expenses that affect profit margins. It emphasizes the need for improved metrics and analytics to accurately measure corporate strategy and execution, suggesting that current methods fail to provide consistent visibility at the C-level. Additionally, the document outlines Simmethod's approach to creating industry-agnostic performance indices to help businesses better understand their competitive landscape and identify potential risks and opportunities.

1. SIMMETHOD
A new way to measure and predict
your corporate risk and
performance
Was Salesforce Performance
Predictable?
3/3/2014
WWW.SIMMETHOD.COM
1

2. SIMMETHOD Strategy & Execution
Performance Predictive Index
On February 28, Seeking Alpha Trefis
Notes of the Day published the
following observations:
• “Steep Net Income Decline Despite Tax
Benefit Underlies Salesforce's Lopsided
Growth Strategy”
3/3/2014
WWW.SIMMETHOD.COM
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3. SIMMETHOD Strategy & Execution
Performance Predictive Index
• “Margins for the company continued to
tread a downward trajectory as
operating expense grew even faster
than revenue for the third successive
year. Salesforce posted an GAAP
operating loss of $286 million for FY14,
which translates into a staggering -7%
operating profit margin”.
3/3/2014
WWW.SIMMETHOD.COM
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4. SIMMETHOD Strategy & Execution
Performance Predictive Index
• “We expect to see continued erosion in
margins for Salesforce in the near term,
as competition intensifies within the
cloud enterprise software industry and
Salesforce’s increases its investments to
increase its lead over competitors”.
3/3/2014
WWW.SIMMETHOD.COM
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5. SIMMETHOD Strategy & Execution
Performance Predictive Index
• “What’s more worrying is that
Salesforce’s loss before tax deductions
nearly tripled, increasing from a loss of
$128 million in the previous year to
$358 million in fiscal 2014”.
3/3/2014
WWW.SIMMETHOD.COM
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6. SIMMETHOD
•
3/3/2014
Was Salesforce performance
predictable based on the
SIMMETHOD Strategy and
Execution Performance
Predictive Indices?
WWW.SIMMETHOD.COM
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7. SIMMETHOD
Risk and Opportunity Alerts
3/3/2014
WWW.SIMMETHOD.COM
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8. The Way We Measure Corporate
Performance Is Broken
Mervyns
Circuit City
Wachovia
Washington
Mutual
Borders
Blockbuster
3/3/2014
Why do
Businesses
fail?
WWW.SIMMETHOD.COM
Linen n’
Things
8

9. The CEO Lament in the Business
Analytics Market
• We did not see it coming. All my
Divisions and Product’s Analytics
pointed North while my Business
as a whole (in comparison to
new competitors and the BestIn-Class in multiple industries)
went South.
3/3/2014
WWW.SIMMETHOD.COM
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10. Disrupting the Way We Measure
Corporate Risk and Performance
There are three main problems:
• The lack of a single industry-agnostic
scale to measure and predict corporate
strategy & execution (competitive
advantage) leads to erroneous and
inconsistent C-level visibility and
decision-making
3/3/2014
WWW.SIMMETHOD.COM
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11. Disrupting the Way We Measure
Corporate Risk and Performance
• Silos-analytics and leading indicators
that lead to erroneous C-level decisions
based on many versions of the truth
unintegrated to business strategy and
objectives
3/3/2014
WWW.SIMMETHOD.COM
11

12. Disrupting the Way We Measure
Corporate Risk and Performance
• C-level risk and performance metrics
and ratios based on industrial-era
analytics that were not designed to
capture intangible values or the
dynamic relationships between
businesses and their value chains
3/3/2014
WWW.SIMMETHOD.COM
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13. Silos Analytics Lead to Many Versions
of the Truth and Erroneous Decisions
3/3/2014
WWW.SIMMETHOD.COM
13

14. Lack of Business and Value-Chain
Leading Indicators and Risk Alerts
Maximum
Risk,
Minimum
Visibility
Company
view
InwardLooking
Analytics
3/3/2014
Value-Chain and Market
Leading Indicators and Risk
Alerts
SIMMETHOD™
industry view
indicators &
alerts
SIMMETHOD™
value-chain
view, leading
performance
indicators &
alerts
SIMMETHOD™
global market
view leading
risk/
performance
indicators &
alerts database
Minimum Risk and Maximum
Visibility
WWW.SIMMETHOD.COM
14

15. The Leading Indicators and Risk Alerts
of the Best-In-Class
Why do you need Industry Agnostic Leading
indicators and Risk/Opportunities Alerts?
• In an interdependent Market (like the Planets
in the solar system) your current and future
risk and performance are impacted by an
ecosystem of constantly changing
competitors coming from inside
and outside your Industry.
3/3/2014
WWW.SIMMETHOD.COM
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16. Your Gap to SIMMETHOD’s Best-In-Class
Determines Your Risk and Performance
Gap to B-I-C in
your industry
Your original
targets against
SIMMETHOD
Database
Your current
position against
the B-I-C and
competitors
Gap to
Competitors in
a range of
industries
Gap to B-I-C in a
range of
industries
3/3/2014
WWW.SIMMETHOD.COM
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17. SIMMETHOD’s Disclaimer
• The purpose of the SIMMETHOD
Strategy/Execution Performance Predictive
Index, Reports and Risk/Opportunities Alerts
is not to make a Business right or wrong but
rather contribute towards the understanding
of management actions in comparison to
industry peers and the SIMMETHOD Best-InClass.
3/3/2014
WWW.SIMMETHOD.COM
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18. SIMMETHOD’s Disclaimer
• SIMMETHOD’s Strategy/Execution
Performance Predictive indices, metrics and
risk/opportunities alerts do not seek to be
exact but rather serve as a conduit to ask
better questions and seek better answers in
the performance improvement, risk
minimization and value creation journey.
3/3/2014
WWW.SIMMETHOD.COM
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19. SIMMETHOD’s Disclaimer
• Sometimes, the value of a metric in itself
does not provide the greatest of insights, but
valuable actionable knowledge is gained
from its ability to provide a trend or a
common comparison yardstick with other
Businesses across a range of industries.
3/3/2014
WWW.SIMMETHOD.COM
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20. SIMMETHOD’s Disclaimer
• This report is for informational purpose only
and SIMMETHOD shall not be liable for the
contents of the report or risk/opportunities
alerts or for any damage incurred or alleged
to be incurred to any of the Businesses
included in the Report as a result of its
content
3/3/2014
WWW.SIMMETHOD.COM
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21. SIMMETHOD
•
3/3/2014
Was Salesforce performance
predictable based on the
SIMMETHOD Strategy and
Execution Performance
Predictive Indices?
WWW.SIMMETHOD.COM
21

22. SIMMETHOD’s C-Level Indices Business
Trends 2012-2013
Salesforce and the Best-In-Class
The following C-Level indices show Salesforce
ability to:
• Strategize and execute against the
SIMMETHOD Best-In-Class
• Compete against the Best-In-Class and
current and future competitors
and are leading indicators of future
performance and business risk
3/3/2014
WWW.SIMMETHOD.COM
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23. SIMMETHOD’s C-Level Indices Business
Trends 2012-2013
Salesforce and the Best-In-Class
• When the Best-In-Class and your
SIMMETHOD C-Level indices are
moving in opposite directions your
ability to compete weakens in
proportion to your widening gap to
the Best-In-Class
3/3/2014
WWW.SIMMETHOD.COM
23

24. 25
20
15
SIMMETHOD’s C-Level Indices Business
Trends 2012-2013
Salesforce and the Best-In-Class
Although Salesforce Value Creation Index is pointing North,
its Management Controllable Resources and Business
Model Indices against the Best-In-Class are pointing South
negatively impacting the Performance Predictive Index
10
salesforce
2012
Salesforce
2013
Average
2013 BIC
5
0
-5
-10
SIMMETHOD SIMMETHOD Value SIMMETHOD
Management
Creation Index
Minimum
Controllable
Company Business
Resources index
Model index
-15
SIMMETHOD
Strategy/
Execution
Performance
Predictive index
-20
3/3/2014
WWW.SIMMETHOD.COM
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25. SIMMETHOD’s Business Trends Across the
Major Indices – 2012 to 2013
15
10
Areas where competitive advantage against the
Best-In-Class is being gained or lost
salesforce
2012
5
Salesforce
2013
0
-5
-10
-15
-20
3/3/2014
WWW.SIMMETHOD.COM
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26. SIMMETHOD Industry and Business Trends
Sales and Marketing contribution to Business Value
2012 to 2013
25
Salesforce Sales Index negative
score highlights a reduced
contribution to business value
creation reflected on a below
Best-In-Class score for the
Strategy/Execution
Performance Predictive Index
20
15
10
2012
2013
5
0
-5
Salesforce Strategy
/Execution
Performance
Predictive index
B-I-C Strategy
/Execution
Performance
Predictive Index
Salesforce Sales
Index
B-I-C Sales Index
-10
3/3/2014
WWW.SIMMETHOD.COM
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27. SIMMETHOD Competitive Intelligence
Sales and Marketing View
25
20
Salesforce underperforms the BestIn-Class in the Sales and
Strategy/Execution Performance
Predictive Index
SIMMETHOD
Sales Index
15
10
SIMMETHOD
Strategy
/Execution
Performance
Predictive Index
5
0
Vmware
Salesforce
Intuit
2013 B-I-C
-5
3/3/2014
WWW.SIMMETHOD.COM
27

28. SIMMETHOD™ Industry and Business Trends
HR contribution to Business Value 2012 to 2013
25
Although improved, Salesforce HR
Index is negative and was not
sufficient to drive its
Strategy/Execution Performance
Predictive Index above
SIMMETHOD’s Best-In-Class
20
15
2012
10
2013
5
0
-5
Salesforce Strategy
/Execution
Performance
Predictive index
3/3/2014
B-I-C Strategy
/Execution
Performance
Predictive Index
Salesforce HR Index
WWW.SIMMETHOD.COM
B-I-C HR Index
28

29. SIMMETHOD Competitive Intelligence
HR View 2013
25
20
Salesforce HR Index is negative and
below Best-In-Class level dragging
down its Strategy/Execution
Performance Predictive Index below
the Best-In-Class
SIMMETHOD HR
Index
15
10
SIMMETHOD
Strategy
/Execution
Performance
Predictive Index
5
0
Vmware
Salesforce
Intuit
2013 B-I-C
-5
3/3/2014
WWW.SIMMETHOD.COM
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30. SIMMETHOD
Risk and Opportunities Alerts
• The SIMMETHOD algorithms review business
data and stockholders valuation-decisions
across business sectors and build industryagnostic indices in order to identify, measure,
correlate and predict your strengths,
weaknesses, risks and opportunities against
your current and potential future
competitors from inside or outside your
industry.
3/3/2014
WWW.SIMMETHOD.COM
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31. SIMMETHOD
2014 Industry and Business Trends
• SIMMETHOD’s Strategy & Execution
Performance Predictive Indices and trends
are not deterministic. Businesses that act on
their leading indicators and risk alerts will
improve their 2014 performance as will be
shown in the forthcoming update of the
SIMMETHOD database, performance
predictive indices and correlations.
WWW.SIMMETHOD.COM
3/3/2014
31

32. SIMMETHOD
Risk and Opportunities Alerts
SIMMETHOD is in the top 1% of most
viewed in Slideshare and has been
“Hot” on LinkedIn, Twitter and
Facebook 46 times.
3/3/2014
WWW.SIMMETHOD.COM
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33. Jorge Oscar Tabacman
jtabacman@gmail.com
Twitter ID: SIMMETHOD
SIMMETHOD
A New Way to Measure and Predict
the Risk and Performance of Your
Business and Alert You of New
Threats and Opportunities
3/3/2014
WWW.SIMMETHOD.COM
33