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Look Beyond Financial Performance: Q&A With Forrester's Paul Hammerman

What's the next performance management (PM) challenge? Forrester's vice president of enterprise applications discusses operational PM and offerings from the likes of Oracle, SAP and Microsoft.
Paul Hamerman

Why does financial PM get so much more attention than operational PM?

The CFO's organization has been a key buyer of the software, and lately they've had healthy budgets to enhance the information systems that supporting financial reporting and budgeting because of the Sarbanes-Oxley imperative. SOX exposed a lot of weaknesses in financial systems.

In many cases the performance measures started in finance, but now they're reaching out throughout the organization. Companies are going to an enterprise focus and looking at this more holistically. The vendors talking about operational PM see an opportunity to provide a more comprehensive solution.

That describes many BI/PM vendors, but what about the applications vendors?

The ERP vendors have done some good work engineering reporting systems that take data out of their own transactional systems. Oracle, for example, has something called Daily Business Intelligence that really has some good design concepts, though it hasn't been widely adopted by the customer base. I think it's a good model of a consolidated reporting system that looks at various performance measures across the entire business, and it has a lot of potential.

Can apps vendors handle the depth and breadth of analyses needed for operational PM?

I think they can. Oracle has broad capabilities around information with its platforms and their tools. There's also the fact that a lot of the data that's being analyzed is housed within its ERP systems. Oracle understand its systems and where the data comes from, so it can engineer things into its application and into its database that support the prebuilt approach to surfacing a lot of that data.

What about SAP and Microsoft?

Applications are a small part of Microsoft's business, and some of the things it's developing with the PerformancePoint server initiative go well beyond its [Dynamics] applications customer base. I think Microsoft can engineer usability around Office that will be compelling.

SAP has a warehouse platform and lot of capabilities in the realm of analytics, but it hasn't been so successful with its [SCM] PM applications in terms of adoption.

Where should customers turn if they have both ERP and BI vendors and they're getting into PM?

That depends on where the data is coming from. If it's a wall-to-wall SAP environment, you would look to SAP for some of the reporting technology and PM applications, but you would supplement that with best-of-breed solutions in areas where those tools are better for their needs.

Most big ERP shops use a lot of the BI reporting tools, and that's not going to change. ERP reporting tools [are] notoriously hard to use and tend to be inferior to those provided by leading BI vendors. The ERP vendors have come to the realization that they can't do everything, and that's why you see lots of partnerships.

Outtakes

Favorite travel destination? My last two trips were out of the country, to Quebec and Portugal. I always enjoy experiencing different cultures, learning about their history and especially sampling the food and wines. What do you miss? I miss the simpler times, when we had fewer phone numbers and secret passwords to keep track of.