In looking through various blogs and magazine articles, you’ve heard that corporate performance solutions are the ‘in-thing’ and that everyone seems to be implementing them. So after doing some research you shortlist three suppliers who are now all going to tell you why their system is unique, the best and how much better off you would be if you choose them.
The ‘standard’ demo
Each vendor comes in looking smart and well versed in a mixture of old and new buzz words – business intelligence, cloud computing, Saas, Olap, CPM, EPM … Their “raison d’etre” why you should choose them starts out with an impressive set of slides followed by a demo that features a dashboard showing a problem. With the skill of a trained actor, the person conducting the demonstration drills down to underlying detail which shows that one product hasn’t achieved its intended target. With a few deft key strokes the data is re-planned and submitted for approval. We now change roll to that of an executive who sees the revised forecast, views the attached explanation, approves it so that everything in ‘demo-world’ is fine once again. With that, the final sales pitch is made, prices explained, reasons given why the competition is not as good, and your signature on the contract requested.
The only trouble is that your left wondering whether the scenario you’ve just seen is realistic, whether or not you’ll ever be able to perform the same feat inside your own organisation, and a feeling that all the products you’ve seen are pretty much the same.
What should you evaluate?
So what exactly have you seen and is it enough to make an informed choice? The first thing to remember is that software vendors are only going to show you what they want to show – and even then you can’t be sure that what you’ve seen is what the product can actually do. The second thing, is that the world is not straightforward and just because a number is over or under target, doesn’t mean it’s bad, or that it can form the basis of an intelligent decision.
To properly evaluate any software solution you first have to identify the real business need it should support and the value it should add. For example, if the purpose of the budget is to financially represent the initiatives required to achieve strategic goals, then the software will need to support the development and assessment of various projects, either singly or in combination, as to how they impact strategic goals and whether the costs involved are worth the effort.
Similarly, if the business reason for having a dashboard is to show whether the organisation’s KPIs are on track, then to be of real value, the system should also be tracking whether the initiatives supporting the KPIs are being implemented, whether they have enough resources, and if the business assumptions behind the initiatives, such as market growth, still hold true.
Don’t forget the processes!
As well as determining the business value and that the capabilities to deliver that value are present, the other major factor to consider when evaluating a solution, is what changes will be required to the organisations day-to-day management activities. The value of ERP is only realised if organisations take time out to re-design the management processes that the software supports. And the same is true of most, if not all, systems. Gartner predict that most organisations will not realise the true benefits of CPM because they fail to change their underlying management processes.
As a result any evaluation should include the changes to management practices the vendor would recommend, and, just as important, whether the software solution includes workflow support and escalation procedures when actions are not carried out.
Too often software evaluations are restricted to features and functions. It’s like evaluating a car by looking at individual components such as the wheels, the engine, the seats …. but without seeing if they all work together to meet your needs for your circumstances. A small electric car may be fine for some people but no good if you need to travel to the arctic or move heavy equipment.
So next time you are tempted to view a demonstration, make sure you’re prepared with questions that will help you to assess the true business value of the solution in your ‘real world’.
By Michael Coveney, EPM Contributor
Michael Coveney has more than 35 years of experience in the financial analytic software industry, helping enterprises combine ‘best management practices’ with technology to improve the efficiency and effectiveness of their performance management processes.His energetic style and insightful views has led him to become a regular speaker at international events, a course leader with the Antwerp Management School, and the author of many articles and books including his latest ‘Strategy to the Max’ – a down to earth look at all you need to know in setting up systems that support the implementation of corporate strategy.