Actuate Scores Performancesoft

VentanaMonitor™

Summary
Actuate will buy Performancesoft, a Toronto, Ontario-based performance management software company with 2005 revenues of US$10 million. Performancesoft, while not well-known in the market, has built a solid base of enterprise customers and met the needs of finance and operational management. It offers a scorecard application for management throughout the organization to use to enable performance management. Ventana Research sees the combination as complementary and one that will extend Actuate’s business decision-focused software offerings into actionable performance scorecards for use across finance, operations and IT management.
 
Assessment
Actuate will purchase Performancesoft, whose pbviews software enables managing by objectives and linking individual performance to organizational goals. The acquired company’s scorecard application helps manage performance through strategy, goal definition and mapping to key performance indicators. This type of application goes beyond providing access to lots of data to aligning it to the organization’s business goals and objectives.

Users of pbviews (once named Panorama Business Views) can pull together performance reviews that combine detailed operational information and financial metrics. Designed to do more than an executive dashboard, it can support management initiatives by enabling executives to mediate among diverse goals, objectives and linked metrics and help implement business decisions in a dynamic environment. It is not just for the executive suite but for managers throughout the organization. Pbviews complements Actuate's focus on providing timely, actionable information to enable people to make better decisions. The scorecards accommodate methodologies such as Balanced Scorecard, Baldrige quality excellence criteria, Six Sigma as well as any custom framework.

Managers using pbviews have a range of interface options to help extend their understanding of the information. There are visual interfaces, such as strategy maps, business flow-charts, cause-and-effect mapping and geographical measurements, as well as spreadsheets, a briefing book and performance views.

By offering these capabilities in a package that is relatively easy to deploy, Performancesoft has built a base of about 500 large enterprise customers mainly in manufacturing, financial services and government. Through the acquisition Actuate intends to extend its business-focused offering with capabilities that complement its executive dashboards, query and reports, analytics and server-managed spreadsheets.

Ventana Research thinks the acquisition complements Actuate’s business-focused market approach. We see financial performance management (FPM) as a way to structure financial systems and processes to promote efficient, accurate and timely execution of finance and accounting functions. Finance organizations play a strategic role in managing the performance of a company; having reliable information and analysis can enhance that performance. Actuate has embraced FPM, offering a software suite that streamlines execution of core processes in finance organizations and provides actionable information to business units. The scorecard approach of pbviews extends its capabilities and fills a hole in its product lineup.

Market Impact
The market for scorecard software is fragmented. Actuate faces competition from enterprise resource planning (ERP) vendors (such as Oracle and SAP) and scorecard offerings from software companies such as Business Objects, Cognos, Geac, Hyperion and Pilot Software. Ventana Research thinks the combination of Actuate and Performancesoft will benefit both organizations. Actuate says it intends to keep the acquired company largely intact and to grow it through sales and marketing efforts. Performancesoft added about 100 customers in 2005, and being part of a larger company should help it mitigate vendor viability risk issues for them. We think Actuate’s success in this market going forward will depend on how well it maintains focus on the practical elements of using scorecards to manage performance in organizations and not as an enabler for a balanced scorecard methodology.

Recommendation
Scorecard applications are becoming enablers of performance management in large organizations. Historically, these applications have been used almost exclusively by executives and senior management, but recently they have been deployed more broadly. We find success is likely when finance and operations executives take a leadership role in aligning people, process and information. Ventana Research believes that management has to guide the use and direction of any IT effort, including software that facilitates the alignment of operational and strategic goals. We recommend that companies that need software to support a new or restarted scorecard or performance management initiative consider Actuate and pbviews.

About Ventana Research
Ventana Research is the leading Performance Management research and advisory services firm.  By providing expert insight and detailed guidance, Ventana Research helps clients operate their companies more efficiently and effectively. These business improvements are delivered through a top-down approach that connects people, process, information and technology. What makes Ventana Research different from other analyst firms is a focus on Performance Management for finance, operations and IT. This focus, plus research as a foundation and reach into a community of over two million corporate executives through extensive media partnerships, allows Ventana Research to deliver a high-value, low-risk method for achieving optimal business performance. To learn how Ventana Research Performance Management workshops, assessments and advisory services can impact your bottom line, visit www.ventanaresearch.com.

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