BPM’s New Vendor Certification: Clearing the Waters in Performance Management?

Vena CEO Don Mal weighs in on the value of BPM’s new certification for next generation performance management vendors

Vena CEO: Next generation certification should help buyers separate the best from the rest

This week BPM Partners launched a new certification program to identify select vendors that represent the next generation of corporate performance management (CPM). The research firm named Vena one of only nine certified vendors in its inaugural list, based on four criteria to be considered next generation solutions:

• Comprehensive
• Collaborative
• Connected
• Cloud

The program is a smart move on BPM’s part. A much-needed resource for companies considering a new or replacement solution for budgeting, financial close management, reporting and other processes that fall under the ever-widening umbrella of CPM (or EPM or BPM, depending on your source).

The Table Stakes are Set…and Just Got Higher

Between the constantly evolving definition of CPM – some analysts are even doing away with the term entirely – and the number of vendors emerging in the space, navigating the sea of competing solutions is a huge challenge for the companies that need CPM software the most. As we enter the next generation of CPM, these waters aren’t going to get any clearer.

BPM's certification program goes a long way in clearing these muddy waters. Its criteria provide customers with clear, up-to-date table stakes customers should expect from any CPM vendor. Quite simply, vendors not meeting these criteria don't have the minimum stakes to compete for most customers’ CPM business.

Table stakes in CPM used to mean automating a core set of financial processes – from budgeting to regulatory reporting – with a similarly core set of enterprise-grade features. Workflow automation, audit trails, basic systems integration and business rules come to mind.

Today those stakes are higher, and that’s only going to continue as the market matures.

With the overall value of the certification program clear, let’s explore its criteria and their importance to current and future CPM customers.

Comprehensive

In Vena’s earlier days, a comprehensive solution largely meant offering software to automate the full gamut of core financial processes – mostly budgeting, planning, financial close management and reporting – not just one or two. BPM’s own research shows the value in this approach, with 72% of clients surveyed preferring CPM offered (in part or in whole) as a platform, not point solutions for budgeting or account reconciliation, for example.

For Vena and other next generation CPM vendors today, a comprehensive solution doesn't stop at finance the way traditional ones did. Managing performance with operational and non-financial KPIs has quickly evolved from useful feature to essential capability.

Integrated strategic planning requires a team effort and – also seen in BPM’s research – data from across sales, marketing, customer care and other departments. Vena's revenue performance management product is a prime (and standard- setting if you ask me) example of this concept in action.

Connected  

Offering a single source of the truth by automatically consolidating data from different financial systems has been a mainstay of CPM for years. Any CPM solution should be able to pull real-time data from your budgeting software, actuals from your GL or sub ledgers, and additional metrics from your ERP system.

Consistent with the move to more collaboration and integrated planning, connected with today's CPM software means integrating with tools, metrics and data sources well outside of finance, including:

• Non-GAAP financials like Annual Recurring Revenue (ARR), Customer Lifetime Value (CLV) and Customer Acquisition Cost (CAC)
• Marketing data like lead generation and sales conversion for every channel and campaign
• Sales metrics including regional targets, sales rep performance and average time to close
• Customer insights, from satisfaction scores like NPS, to which customers are costing you more to support than the revenue they bring in

Where BPM hits on a topic close to my heart is integrating directly with Microsoft Office and other productivity software. Management needs familiar software to analyze and present their numbers, without having to learn an entirely new interface or proprietary syntax.

More than anything else (spoiler alert: shameless plug) I put Excel integration atthe top of the must-have connectivity list. When we started Vena six years ago, we went against the grain by embracing Excel in our product. Instead of trying to get customers to throw away their spreadsheets, we built our software from the ground up around full-featured Excel as its main end-user interface. As I’ll touch on in a second, this decision is still paying off.

While we’re definitely seeing more integrated, cross-departmental planning, it's still finance that needs to lead much of the process and bring the right numbers together. And it's in finance more than anywhere that Excel remains the most flexible, powerful and beloved software. Try asking an accountant or FP&A director to give up Excel for a month and see what happens.

I'm on a Vena plug again here, but it's only to highlight the value of using real, native Excel – not a plugin or 'Excel-like' grid – as our primary, most noticeable competitive advantage. Even more telling, Excel is the number one reason more than 75% of our customers chose Vena for their CPM needs. Add a centralized database, workflow and audit trail, and you've got a magic formula: the security and control you need with the software you already know and love…the best of both worlds.

I digress. Vena's 'embrace Excel' approach is vital to our success, but I'd be naive if I thought we could hold onto that advantage for ever. Others are catching on, which is why it's so important to keep investing in product innovations, like those highlighted by BPM's certification criteria.

Collaborative

As annual budgeting and isolated planning processes give way to rolling forecasts and integrated planning, one thing is clear. Finance is a team sport.

The days of planning and budgeting in silos is (thankfully) behind us…at least for leading finance departments. Those leaders need to know which vendors are keeping up with advances in collaboration functionality. From automated workflow to a marketplace for sharing customer-reviewed templates, collaboration is as much a requirement for CPM solutions as user permissions and version control.

Vena isn't the only one to have a marketplace, workflow or other collaboration features, but our early investments in these areas put us among the handful of next generation vendors who do. For vendors who don't have such capabilities already, BPM's certification should be a wakeup call to invest in what’s become a must-have for CPM solutions.

BPM made another smart move by including ease of use in its definition of collaborative solutions. To this end, I have to bring up Excel one last time.