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

November 16, 2017 Don Mal

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:

  • ComprehensiveBPM Certified Performance Management Vendor
  • 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 process – 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.

 

BPM - Operational Analysis PrioritiesFor 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.

 

The first print ad for Excel (circa 1987) courtesy of Going Concern author Adrienne Gonzalez

More than anything else (spoiler alert: shameless plug) I put Excel integration at the 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.

 

BPM Excel Use with CPM SystemsBPM’s research tells us that 84% of CPM customers continue to hit the 'Export to Excel' button to analyze, model and report on data with the software they know best. This single figure – 3 points up from a year ago – neatly sums up:

  • What ease of use really means, and how it’s inextricably linked to Excel in CPM
  • The futility of trying to replace Excel with CPM software
  • Why we focused on Excel as a defining feature of Vena

I know Vena's lead in this regard won't last forever. We're already seeing competitors incorporate Excel more and more into their solutions. But in the meantime it remains the top reason customers buy Vena, and a big reason why they love using it. To be sure, Vena has been the leading CPM vendor (or tied for first) in customer satisfaction studies from BPM, Forrester, Nucleus Research, TrustRadius and more.

 

Cloud

The benefits of cloud delivery in CPM should be self-explanatory by now, but recent months have shown a slight resurgence in the adoption of on-premise solutions. Clearly some customers remain unconvinced of the cloud’s superior scalability, performance, reliability and – yes – even security. 

 

That said, I see BPM’s inclusion of cloud-first delivery as one more leak in the dam holding enterprise cloud software back from its full adoption potential. With a growing chorus of supporting voices – including BPM and other industry analysts – I’m confident that next year will see the lion’s share of enterprise customers recognizing that cloud providers are better at security than their own IT departments.

 

In recent months at Vena, we’ve helped some of the world’s largest, most recognized financial institutions migrate to full cloud solutions. If conservative Wall Street giants can make the move, mainstream adoption can’t be far behind.

 

What's Next?

What's next for CPM evolution or vendor certification? BPM surely has its own ideas – see the conclusion section in their certification report – and other research firms may well follow with their own certification models.

 

After 10 years in the CPM space, I suspect future iterations will put more emphasis on:

  • Easy to use and self-serve dashboard, management and regulatory reporting
  • Ready to use BI for (and owned by) the finance user, especially with readily available tools like Tableau, PowerPivot and PowerBI
  • Not just integration with other systems, but with simple drag and drop tools that let finance users do it themselves
  • Complete finance ownership of CPM solutions, compared to some that still require vendor consultants or IT to make simple template or report changes
  • Modeling and accurately forecasting future revenues as equally important (maybe more so) to performance management as tracking and analyzing past expenses…the untold story behind your top line, as I like to put it

In the meantime, I'm not only proud to be among BPM’s first round of certified vendors. I'm happy to be part of an innovative program that does a valuable service to companies seeking new or replacement CPM solutions. BPM’s certification gives customers a quick, simple but objective way to focus on the vendors who are doing CPM right.

 

For more information please see:

Report: Performance Management: The Next Generation

 

Report: BPM 2017 Pulse of Performance Management Survey

 

Press Release: BPM Partners Certifies “Next Generation Ready” Performance Management Vendors

 

 

About the Author

Don Mal

As Chief Executive Officer, Don executes Vena’s global growth strategy, manages customer relationships and secures long-term revenue. Prior to co-founding Vena, Don led the North American sales teams for Clarity Systems, an IBM Company. He then led global sales for Cognos FSR at IBM before co-founding Vena. Don holds an MBA from the Rotman School of Management and a Master’s Certificate in Project Management from the Schulich School of Business.

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