Predictions for Performance Management in 2020

Craig Schiff , President and CEO, BPM Partners

Analytics Will Become a Standard Component of Performance Management Solutions: Planning has become a company-wide initiative, which in turn has created the need for the right tools to help understand and derive value from this ever-increasing pool of data. The solution is powerful, yet business-friendly analytic capabilities. Today, many performance management vendors provide a generic capability to share data with analytics solutions already in use, or offer basic integration with a handful of third parties. We believe what’s next is for each vendor to offer their own robust analytic solution (in-house developed or acquired), or offer seamless integration with a chosen third-party partner.

Vendors Leading the Way: Axiom Software, Board, IBM, Jedox, Longview, Oracle, SAP, Unit4 Prevero


More Vendors Will Introduce Vertical Solutions: We have always believed in the value of industry-specific solutions. Out of the box content and vendor expertise leads to a faster time to payback, lower implementation costs, a shorter learning curve, and lower risk. So why doesn’t every vendor offer vertical solutions? Two reasons – hiring industry experts to develop the content and support the sales and implementation processes can be costly, and most vendors are afraid of losing the ability to sell to industries outside of their chosen verticals. However, they may no longer have a choice when it comes to certain industries. Financial Services companies for example focus their vendor search almost entirely on those who specialize in their industry. Most companies, regardless of industry, prefer vendors with demonstrated expertise in their vertical. We believe it’s time for more vendors to start down this path.

Vendors Leading the Way:  Axiom Software (financial services, healthcare, higher education), Questica (government/public services, education, healthcare, not for profit), Unit4 Prevero (professional services, government/public services, higher education, not for profit)


Demand for Comprehensive Midmarket Solutions Will Continue to Grow: While companies of all sizes pursue performance management initiatives, every year we see increasing demand in the midmarket. In particular, there is a need for robust and comprehensive solutions. Midmarket organizations may be resource constrained, but their solution requirements are very similar to their larger peers. The fact that many of these companies are in rapid growth mode also adds a level of complexity. However, any solution needs to be cost-effective in addition to being very capable. As some former midmarket vendors have moved upstream (through acquisition, marketing focus, or pricing) there is a need/opportunity for more vendors in this market segment.

Vendors Leading the Way:   Host Analytics, Jedox, Prophix, Vena Solutions


The Need for High Performance Engines Will Increase: As companies expand their use of performance management to more departments and more users the amount of data will increase dramatically. In addition, even those organizations that remain Finance focused are doing more detailed analysis of product and service profitability as well as bringing more transaction level data into the system. All of this requires a more powerful and scalable database engine to provide acceptable performance. Performance testing has become a final proof step for many organizations today. We believe those vendors that have not yet upgraded their systems to provide a high-performance, scalable, elastic, memory-driven engine will need to do so to stay competitive.

Vendors Leading the Way:   Adaptive Insights, CCH Tagetik, deFacto Global, Longview, OneStream Software, Questica, Vena Solutions, SAP


Several trends previously identified by us will continue to accelerate in 2020:

The Expansion of AI

Vendors Leading the Way:   Board, deFacto Global, Jedox, OneStream Software, Unit4 Prevero


Focus on Ease of Use

Vendors Leading the Way:  CCH Tagetik, Jedox, OneStream Software, Vena Solutions, XLerant


Need for Robust Consolidation Capabilities

Vendors Leading the Way:   Board, CCH Tagetik, deFacto Global, Host Analytics, Longview, OneStream Software, Oracle


To see some of the underlying data these predictions are based on request a copy of the 2019 BPM Pulse Survey results.

For more information on any of the vendors listed visit PerformancePlace.

The Best Analyst Reports for Performance Management 2019

Craig Schiff , President and CEO, BPM Partners


It seems every year there are more and more reports covering the business performance management space of budgeting, planning, forecasting, consolidation, reporting, and analytics. None of these reports (even the ones from BPM Partners) tell you everything you need to know to make the right purchase decision. However, they are useful as a starting point, a way to get educated and begin to identify your short list. As you would expect, some reports are more useful than others. It all depends on what you are looking for.  Let’s briefly look at each of the major reports and show you where you can get a free copy.

Available Reports

There are a number of reports available today that focus on various aspects of performance management. Here is a key to the major reports:

BARC Planning Survey – Presentation of survey results with analyst commentary for planning in general and 22 products in particular, from a European-based research firm. Also offers Business Intelligence focused reports.

BPM Partners Vendor Landscape Matrix – Analyst overviews, feature checkboxes, ‘best fit’ analysis, pricing, and customer satisfaction scores for 17 budgeting, planning, reporting, and consolidation vendors.

Dresner Advisory Wisdom of Crowds EPM Market Study – Presents survey results with a focus on enterprise planning and rankings of 13 vendors. Also offers similar reports focused on Business Intelligence.

Gartner Magic Quadrant for Cloud FP&A Solutions– Analyst review of strengths and cautions for 15 vendors. Similar report available for 10 Cloud Financial Close vendors.

Nucleus Research CPM Technology Value Matrix – Analyzes usability and functionality of 18 performance management vendors. Also offer ROI case studies.

While the reports listed above are typically updated on an annual basis, there are also several analyst reports that are either specialized one-shots or infrequently updated. They include Aberdeen – ROI of Sales Planning Analytics, Bloor – From Insight to Action, Forrester – Total Economic Impact, and IDC – MarketScape: Worldwide EPM Market.

Free Copies of Analyst Reports

Now that you have an idea of what reports are available, here is how to get your own copies of the ones that are most relevant to you, all at no cost.

BPM Partners offers a free subset of its Vendor Landscape Matrix report comparing two vendors of your choosing, available here: Vendor Snapshots

For all other analyst reports the links provided below will take you to each vendor’s PerformancePlace page on this site. The free report links for the listed analysts are in the ‘Industry View’ section of each page.

Axiom Software (Kaufman Hall) (Gartner), Board (BARC, Bloor, Dresner Advisory, IDC, Nucleus Research), CCH Tagetik (Wolters Kluwer) (BARC, Gartner), Host Analytics (Dresner Advisory, Forrester, Gartner, IDC, Nucleus Research), IBM (Aberdeen, BARC, Gartner), Jedox (BARC, Dresner, Gartner), Longview (BARC), OneStream (BARC, Dresner Advisory, Gartner, Nucleus Research), Oracle (Gartner), Prophix (BARC, Dresner Advisory), SAP (BARC, Gartner), Vena (Nucleus Research)

Note on free copies: As you’re well aware, nothing is ever totally free. In most cases the vendor you request the report from will probably follow up with some marketing outreach. It’s only fair since each of these reports would normally cost hundreds of dollars or more. Therefore, it makes sense to request the report from a vendor that you wouldn’t mind hearing from and potentially learning more about.

Findings from the 2019 BPM Pulse Survey

Craig Schiff , President and CEO, BPM Partners

While most people focus on the individual vendor customer satisfaction ratings that are part of our annual BPM Pulse survey, they tend to gloss over the other useful information that makes up the bulk of the survey. Let’s highlight some of those key findings that would otherwise be overlooked.

The Three Main Reasons Products are Selected Over Alternatives

When asked why they purchased the performance management vendor they did, one answer rose to the top, regardless of which vendor they actually selected: Product Flexibility. This of course assumes that the product also met their business requirements. All other things being equal  though flexibility was a key selection criteria. In second and third place respectively were Ease of Use and Scalability/Complexity Handling. If a product is flexible, easy to use, and can handle large, complex problems it should come out on top more often than not. The problem is some easy to use products are not very flexible, nor can they handle big challenges. On the other hand, some very flexible products that can handle anything thrown their way are not as easy to use as they should be.

Dashboards Are Not Meeting Expectations

Survey respondents were asked to rate their own vendor’s functionality in several areas: budgeting, reporting, consolidation, analytics, and dashboards. One clear trend emerged – regardless of the vendor, dashboards received comparatively low ratings across the board. Why is that? The survey data didn’t provide much additional insight, but we know from our field work what the general complaints have been. Customers are looking for more interactive dashboard solutions (as opposed to the static Executive Information Systems of days gone by). They want to be able to drill down as many levels as it takes to understand why a particular metric fell short of the target. They want to be able to insert commentary to explain variances. They want the dashboards to be even more visual and intuitive. Based on the survey results there is clearly work to be done here.

Performance Management Solutions are Sticky

When asked how much longer they were planning to keep their current performance management solution 80% of respondents said they had no plans to change. This is consistent with another question which asked ‘what is the useful life of a performance management solution?’ and a third of respondents said 9 years or more (and another third said 6-8 years).  A couple of takeaways a) these systems must be doing something right to have so few purchasers expecting to change any time soon (or it is so painful to change that  it may just be easier to stick with a sub-optimal solution), and b) you better make sure you get the right solution because whether it is for good reasons or bad, you will be living with it for years to come.

Want to see more results? Get your own copy of the 80-page 2019 BPM Pulse Survey Results whitepaper.

Top Rated Performance Management Vendors 2019

Craig Schiff , President and CEO, BPM Partners


We have been running the BPM Pulse survey for 16 years now. What I find most amazing is the consistency of results from year to year. When we ask questions such as ‘which components of performance management are you focused on?’, the number one answer year in year out has been ‘budgeting’. Similarly, questions about the key drivers of the initiative always end up with ‘improve management reporting’ somewhere near the top. There are of course questions that have seen dramatic changes in responses over the years such as ‘would you consider a cloud-based performance management system?’. The ‘no’ answers have virtually disappeared.

Vendor Ratings

While the survey contains many questions about performance management itself, the section where customers rate their vendors garners the most attention. It too has been largely consistent over the years. Highly rated vendors tend to remain highly rated vendors, mid-rated vendors tend to stay mid-rated, and low-rated vendors mostly continue to be low-rated, although some have moved up into the mid-rated category (perhaps after taking corrective action upon seeing their lower ratings). To make things interesting this year we have added some new rating categories. What used to be just a single rating for ‘product functionality’ has been broken into five ratings: ‘budgeting functionality’, ‘consolidation functionality’, ‘reporting functionality’, ‘dashboard functionality’, and ‘analytics functionality’. We are already seeing meaningful results. Even the most highly-rated vendors are not getting high marks across the board. This new level of detail will enable buyers to select vendors based specifically on the satisfaction ratings in the areas most important to their business requirements. In addition, we have been surprised by the fact that in one of these functional areas none of the vendors received high scores.

Top Rated vendors received a customer rating of 4.5 or better out of 5.0 in the category listed.

Top Rated Vendors for 2019 in Key Categories

Overall: XLerant, OneStream, Vena, Jedox, Longview, Host Analytics, Prophix

Budgeting/Planning Functionality: XLerant, Vena, Jedox, Adaptive Insights, Centage, IBM, Prophix, OneStream

Financial Consolidation Functionality: OneStream, Vena, CCH Tagetik, Host Analytics, BOARD, Axiom Software, Jedox, Prophix

Ease of Use: XLerant, OneStream, Vena, Jedox, CCH Tagetik

Finance Self-Sufficiency: Vena, Host Analytics, OneStream, XLerant

To see additional customer ratings for these vendors and others watch the on demand Pulse 2019 webcast, read the 2019 Vendor Landscape Matrix report, or request free Vendor Snapshots.

Performance Management’s Hot Streak

Craig Schiff , President and CEO, BPM Partners


Over the past 5 months the performance management market has seen significant interest and investment. Not just from customers, but from venture capital firms and other software companies looking to gain a foothold in this market. Here is a timeline of the major announcements:

October 2018 – Adaptive Insights is acquired by Workday

November 2018 – Anaplan goes public

December 2018 – Host Analytics is acquired by Vector Capital

January 2019 – Vena Solutions receives a $115 million investment from JMI Equity and Centana Growth Partners

February 2019 – OneStream Software receives a significant investment from KKR (rumored to be approximately $500 million)


The performance management market hasn’t seen this much activity since 2007 when Cognos was acquired by IBM, Hyperion was acquired by Oracle, and OutlookSoft was acquired by SAP (they also acquired Business Objects which had just acquired Cartesis that same year). However, that series of acquisitions was focused on enabling the acquiring companies to replace their existing (and mediocre) performance management offerings with market-leading ones. In effect, it was a market consolidation since the smaller, independent vendors were absorbed into the larger vendors and the existing solutions they replaced were phased out.

What is happening today is the opposite of what happened in 2007: this round of activity is all about expanding the performance management market. All of the companies identified above continue to sell their product lines with varying degrees of independence, but with significant new capital behind them. The goal is to enable them to grow faster than they could have on their own.

What does this mean from a customer/prospect perspective?

The Good: All of these companies are now more viable than they were prior to this activity. Concerns about relatively small, independent vendors not being around for ongoing support are greatly reduced. New product development can be accelerated, support staffs increased. Of course sales and marketing investments will also increase creating a larger community of customers to be a part of. All of the investments will keep these vendors active and growing.

The (Potential) Bad: New owners/board members can take the vendor in a new direction that doesn’t align with existing customer needs. An influx of capital and rapid expansion can lead to distraction and unmanageable growth with leadership being stretched thin. Key team members can cash out and leave the company. There is also the risk that the remaining smaller performance management vendors are no longer able to compete with these vendors who are flush with cash. This can lead to some of them becoming niche players or disappearing entirely, unless they find their own suitors.

The net however is that it is a great time to be a performance management customer. This is a thriving, competitive market with a wide selection of proven solutions available for companies of all sizes. This new investment will help expand the footprint of performance management within companies as well as across the globe.

Learn More about these Vendors

Host Analytics to be Acquired by Vector Capital

Craig Schiff , President and CEO, BPM Partners

Note: Includes updated information (1/2/19)


Host Analytics has announced a definitive agreement to be acquired by Vector Capital,  a leading private equity firm specializing in transformational investments in established technology businesses. The deal has now officially closed. The terms of the deal have not been disclosed.

Why This Deal?

Demand for performance management solutions is growing but at the same time the vendor landscape is undergoing significant changes. Adaptive Insights was acquired by Workday earlier this year, Anaplan has become a public company, the larger vendors are in the midst of a multi-year transition from their legacy on premise solutions to brand new cloud offerings. Vendors that had been targeting the midmarket are looking to move upstream. Even long established performance management implementation firms such as TopDown Consulting and Edgewater Ranzal are being acquired. There is an opportunity here to take advantage of the uncertainty all of  these changes create, particularly in the $ 250 million to $ 2 billion slice of the market.

What’s needed to fully exploit this opening? A capable management team, a competitive product set, and deep pockets. Host Analytics already has the right team and product, Vector Capital brings the deep pockets (as well as operational resources and expertise).

Working with a company like Vector Capital has unique benefits and avoids the pitfalls of merging with a larger software company. Let’s start with the pitfalls. Whenever two software companies merge there are a number of inherent challenges – overlap in management, overlap in products, years of product integration work. The management overlap often leads to key team member departures, the product overlap leads to some products being killed or refocused, and the years of integration work often detract from product innovation and expansion of functionality. All of this negatively impacts sales, customer satisfaction, and morale. A key benefit of a venture firm owner is the enhanced ability to find and acquire complementary solutions. The acquisition of performance management vendor Longview Solutions by Marlin Equity several years back illustrates this fairly well. Soon after their acquisition by Marlin, Longview acquired arcplan for BI/analytics and Tidemark for cloud-based planning. Host Analytics may now be able to accelerate its ability to deliver on its vision for the Office of the CFO.

Why Now?

While the timing of this deal certainly reflects the desire to take advantage of  the opportunity in the market today, I’m sure there are other motivations as well. Perhaps some of the original investors/board members are ready for a change. This is a straightforward way to enable them to cash out and pursue other challenges. Board member rotation also benefits Host Analytics with new ideas being brought to the table. It is worth noting though that the largest shareholder, StarVest Partners, will remain a significant investor.

Final Thoughts

In spite of this deal, Host Analytics remains a picture of stability in a rapidly changing market. It will continue to be run as an independent business. Dave Kellogg, long-term CEO at Host, is being replaced on an interim basis by the current Chief Revenue Officer, and the interim CFO role will be filled by a Vector Capital VP. There are no other announced or anticipated management changes at this time. Host is following its existing product roadmap and continuing to roll out new updates and partnerships. Of course we need to see how this all plays out once the transition is complete, but on the surface it seems like a good deal for all concerned.

More about Host Analytics

Predictions for Performance Management in 2019

Craig Schiff , President and CEO, BPM Partners

Artificial Intelligence Will Begin to Provide Real Value

Vendors have been touting Machine Learning and AI for years now, but while it helped them to be seen as innovative and leading edge, it hasn’t really impacted sales. No FP&A groups looking for a new budgeting and forecasting system were saying ‘it has to have AI/ML’. That is changing. There are two main reasons for this. First of all, the implementation of AI by the vendors has become more focused and nuanced. Instead of just tacking on the technology so they could say they have it, they are really using it to provide benefits to performance management users. This includes everything from making their systems easier to use to improving data quality and forecast accuracy. The second element leading to increased interest is the marketing itself. While hardcore technologists are interested in deep learning and natural language processing, the buyers in Finance are more interested in what it can do for them. Vendors are getting the message and talk about predictive analytics and forecast probabilities (machine learning), ease of information access (natural language queries), and more accurate information (anomaly detection).The implementation of AI in the latest performance management products does in fact provide real value to customers which will generate demand, and this in turn provides real value to vendors who successfully package and market this functionality. For more information on this topic see: The Value AI Brings to Performance Management.

Many More Companies Will be Upgrading from Legacy Systems

We have seen a recent surge of companies looking to replace their legacy on-premise performance management systems with a more modern version and this will continue and grow. In most cases their current vendor does offer a modern, cloud-based offering but it is a brand new product that bears little resemblance to what they currently own. This in turn has these companies considering alternatives. The thinking goes that if it is a major project to convert to the new offering (which it will be), why limit the search to just the current vendor? These companies are now following a process that is similar to companies that are moving forward with performance management for the first time: evaluating 3-4 vendors to see which one can best meet their current needs. Everyone benefits from this – vendors have a new group of prospects to sell to, and the companies have a wider range of options to choose from instead of just limiting themselves to their current vendor. Now of course their current vendor can offer them some incentives such as a low upgrade fee and a set of conversion tools to try to keep them in the fold. The reality is that we have not seen much of this. In some cases it is nearly impossible to provide automated conversion tools based on how different the products are. It is our belief that regardless it is worth taking this opportunity to look at alternatives since the entrenched vendor who was leading edge in the last generation may be behind in the current generation. Requirements may have changed dramatically as well since the last system was purchased. One other point, if companies haven’t yet considered upgrading from their legacy on premise offerings they should for two reasons. First of all, performance management has come a long way since on premise ruled the day and they may be missing out on great new capabilities. Secondly, they may be investing time and resources in a ‘dead’ product (and taking a risk by relying on a product with greatly reduced support), even if the vendor claims reports of the product’s death are premature. For related information on this topic see: Frozen in Time.

Financial Consolidation Capabilities Will be Included in More Projects

Budgeting and planning are currently the most in demand performance management components and have been for many years. However, the majority of our customers in the past year have included some aspects of financial consolidation in their requirements, even when they were not specifically looking for a consolidation system. While we always see a sizable  number of companies that are focused on full-blown financial consolidation, many budgeting focused organizations are adding aspects of financial consolidation to their vendor selection criteria as well (see charts below). Candidates for a robust financial consolidation solution are typically large organizations that have one or more of the following challenges:  several different ERP systems, numerous reporting currencies, extensive intercompany transactions, complex local statutory reporting needs, many alternate roll-ups, and/or minority ownership/joint ventures. Some of that functionality and more can also benefit budgeting and planning systems. Currency translation and alternate roll-ups are common requirements of budgeting systems and budgeting vendors accommodate these needs with basic functionality. However, vendors that provide consolidation solutions alongside budgeting and planning can offer more pre-built capabilities and usually deliver better performance. Beyond that, there is functionality that some budgeting and planning purchasers ask for that is typically only included as part of a consolidation feature set. This list includes detailed audit logs, intercompany matching and elimination, account reconciliation, trial balance, ability to see data pre and post adjustments and in some cases even being able to post journal entries. We expect this trend to continue and apparently the vendors do as well as many of them have a renewed focus on enhancing their consolidation capabilities. For more information on this topic see: How to Leverage Consolidation Functionality in Budgeting and Planning.

Source: BPM Partners 2018 BPM Pulse Survey

Company-wide Planning Will Gain Traction

Integrated business planning has been a goal for many years. Most organizations have fallen short when it comes to achieving this goal because of two issues:  difficulty in coordinating major cross-functional initiatives and lack of technology support. Both of these problems have begun to sort themselves out. On the technology front several of the larger performance management vendors have started to deliver on the promise of an integrated, collaborative planning platform. Whether they call it connected planning or collaborative enterprise planning or something else entirely, the vision is the same: a single unified planning platform with specific solutions for each area of the business. Some of the smaller vendors that have focused almost exclusively on financial planning have seen the light as well and are beginning to think of themselves as more of a platform and are utilizing an app store model to deliver solutions to meet the needs of a broader audience. Organizations that are looking for solutions that address operational as well financial planning now have a wider range of options to choose from than in the past when they essentially had to build their own operational solutions using business intelligence tools. With the technology side being addressed there is still the organizational challenge of each department focusing narrowly on their own needs. Who drives and oversees this cross-functional initiative and makes sure that the company doesn’t end up with a collection of disconnected point solutions? The answer to this question has grown clearer over time. While the CIO and department heads have a role to play, the consensus seems to be that it is the CFO who should oversee coordinated and connected company-wide planning (see chart below). With these two key pieces of the puzzle falling into place we expect to see more companies undertake enterprise-wide planning projects. For related information on this topic see: Performance Management: The Next Generation.

Source: BPM Partners 2018 BPM Pulse Survey

As you can see, in 2019 there will be more reasons than ever for those that have remained on the sidelines to get on board with performance management. For those that already have, it may be worthwhile to evaluate their current system against more modern products and determine if an upgrade makes sense.

Do Requirements Really Matter?

Note: This is a re-post of a blog entry we wrote several years ago, but recent experience has confirmed that it is still as relevant as ever.

Do Requirements Really Matter?

Craig Schiff , President and CEO, BPM Partners

Of course they do, but you wouldn’t know it by looking at many of the companies we meet with while they are in the process of selecting a performance management solution. A company we worked with a few months ago illustrates this point perfectly.

When we walked in the door they were far down the path with a particular vendor and they just wanted us to ‘validate’ their decision. In other words, did we believe their assessment was right that this vendor could meet their requirements. Well, we’d have to see those requirements first. The good news is that on the technology side they had a decent set of requirements outlining required interfaces, supported databases, desired performance/responsiveness, remote access needs, security, etc. It was a 12 page document and also included a project timeline.

On the business side, it was a paragraph someone had sent as an email. It went something like ‘need to implement a system to replace Excel-based planning and reporting’. Now of course the finance team and business unit leaders involved had a lot more thoughts on what they wanted, but it was all in their heads. It was not clear that they had even discussed it with each other. There was no way this was going to end well. So, we recommended they step back for a moment and let us help them develop detailed requirements.

They put together a team of 40 key stakeholders and we interviewed all of them (some in departmental groups, others individually). The end product was a nearly 60-page document reviewing the current status of their systems, related challenges, and required functionality of the new system. While the raw interview data was maintained, the requirements were summarized by product functionality area and prioritized by frequency of request. One of the first things that became apparent was that they were looking at capabilities that went far beyond just planning and reporting.

The end result of all of this was that the vendor they were about to purchase was now obviously not a fit. Using these new detailed requirements we helped them identify several vendors that could potentially meet their needs. They went on to evaluate four of them against their specific requirements. They then scored them according to their ability to meet each requirement and went into contract discussions with the top two scoring vendors.

Without detailed business requirements you could easily select the wrong solution, as almost happened here. In addition how can you compare vendors without knowing what specific criteria you are using for the evaluation and scoring? There is also a hidden benefit to this requirements process. Those 40 people that were interviewed now feel that their voices were heard and their input was taken into account. While it is unlikely that 100% of their requests will be met by the new solution, because they were part of the process they will help support a successful rollout and accelerate user buy-in and adoption.

Requirements gathering is of course an integral part of our vendor selection services. Learn more here.

What’s the Value of a Performance Management ‘App Store’?

What’s the Value of a Performance Management ‘App Store’?

Craig Schiff , President and CEO, BPM Partners


Most vendors today offer something they refer to as a library, exchange, hub, or marketplace of solutions. These offerings are designed to augment the vendor’s standard products and services. The solutions themselves are developed by the vendor, their partners, or in some cases other users. The main goals, according to the vendors, are to expand the ways a user can benefit from their products and accelerate time to value. In most cases, the main beneficiary of the value offered by these solutions is the vendor, although there are some notable exceptions.

Let’s take a closer look at what these marketplaces really offer. They are modeled after the app stores offered by Apple, Google, and Microsoft. The intent is to enable users to instantly download free or fee-based apps to extend the value of their existing products. User familiarity with this approach is a double-edged sword: they immediately understand how it works and the value proposition, unfortunately their expectations as to what they will be getting are often not met.

Continue reading our Guest Blog entry on the OneStream Software site.

The Value AI Brings to Performance Management

The Value AI Brings to Performance Management

Craig Schiff , President and CEO, BPM Partners


For several years now performance management software vendors have been talking about AI (artificial intelligence) and more specifically machine learning. While of interest to technologists, it hasn’t been obvious why those in Finance, often the primary users of performance management, should care. It has now become obvious. Whether it is due to the vendors improving their implementation of the technology to deliver real value, or simply cleaning up their messaging, Finance is now sitting up and taking notice.

Predictive Analytics

The first AI-based capability gaining traction is predictive analytics. Put simply this capability improves the accuracy of forecasts, a key element of most performance management implementations. By utilizing machine learning (specifically deep learning) the system can generate a forecast based on historical data. Users can then tweak the forecast based on their own read of where the business is headed. Those reluctant to give up that much control of forecast creation can still benefit from predictive analytics. They can generate their own forecast and then have the system assess the probability of their forecast coming to pass. Some may say that predictive capabilities pre-date modern AI technologies. That is true, but what has changed is the accuracy. Earlier versions of predictive analytics used straightforward statistical analysis of the data to produce predicted outcomes. While the results may have been reasonable at a high level, they missed some of the details. For example in a business where the numbers go up and down on a seasonal basis older predictive capabilities might have been able to predict where the business would end up, but might have smoothed over the period to period fluctuations (see illustration below). While purchasers of performance management systems today aren’t saying ‘We need AI’ they are adding predictive analytics to their key requirements list perhaps without realizing that it is often powered by AI.

The next group of AI capabilities are at an earlier stage both in terms of market demand/acceptance and performance management product delivery. They include NLP (natural language processing), AD (anomaly detection), and RPA (robotic process automation).

Natural Language Processing

Natural language processing is gaining acceptance in the consumer market with devices such as the Amazon Echo, but what about in business applications? We are not there yet. Numerous vendors however are moving forward with support for natural language queries.  The ability to say to your performance management system ‘Show me the sales numbers for Europe for July’ should be quite compelling. After all, the current alternative is to select options from multiple pull-down menus or in some systems to create a scripted query to retrieve the values. The reluctance seems to be to sitting there and talking to your computer at work. Perhaps the new Surface headphones will make that process easier. What people are missing though is that  instead of saying it you can type your request in to a search-like box using business terms as opposed to writing a technical query. In terms of making performance data readily available to a larger group of employees natural-language queries have huge potential. Natural-language generation is another important element of NLP that can provide value. In particular, for the creation of narrative summaries that usually accompany the numbers (‘Sales this month of $ 1,360,000 were down 10% from last year at this time’) much time can be saved. Today creating these narratives is often a manual process with the potential for errors. With AI the system can automatically retrieve the sales data, calculate the variance from a prior period, and determine that sales are ‘down’ and not ‘up’.

Anomaly Detection

Anomaly detection may be less visible than predictive analytics and NLP, but it may be more valuable. This capability should be able to dramatically improve the quality of the data, which is key to a performance management system designed to provide one version of the truth that management can rely on. As the name implies this functionality spots data that is outside the expected normal range. In performance management where a significant amount of transactional source data is bulk-loaded into the system for reporting purposes this capability can both speed the process and improve the quality of the result. For example, if a particular cost center’s data for a certain account has been around 1,000 per month for many months and all of a sudden this month it comes over as 1,000,000 it will be flagged as an anomaly. More than likely someone incorrectly set the scaling factor in the mapping table. If this wasn’t detected and the error got buried in a consolidated roll-up the company could very easily be reporting inaccurate numbers. The same kind of anomaly detection can also work on numbers being keyed in directly. This capability is obviously critical. While some vendors do offer data quality functionality today, this AI feature will make it easier for others to join in while adding an additional layer of checks to existing solutions.

Robotic Process Automation

Robotic process automation seems to be lower on the delivery list for performance management vendors. Yet it would seem to be a big win in terms of making a system more intuitive, easier to use, and therefore ready to be rolled out to larger groups of users. What RPA does is automate  the steps in a repetitive multi-step process. So, for example if every month you need to load data, consolidate, run some reports, and notify a list of people that the reports are ready the system can do this all for you. It saves time but it also prevents you from inadvertently missing a step (for example forgetting to re-consolidate after loading the data and therefore producing reports with old data). More simply, a modified version of RPA can help you navigate through the system.  If you are a casual user of the system who only enters a budget once a year you may forget the steps the next time the budget rolls around. With this functionality the system can prompt you to proceed to appropriate next steps based on your prior usage pattern. So, after finishing your budget it can suggest you lock and submit your data, print a copy for your records, and notify your manager it is waiting for approval. Again, some systems do a version of this today but with AI it will become more accurate, more adaptable to your particular needs, and more widely available throughout the system.


Every key vendor that we follow in the performance management space has either delivered AI capabilities or has them under development with plans for an initial release in the near future. To see which vendors have delivered AI, and more specifically which of the particular features described above, check out our Vendor Snapshots and Vendor Landscape Matrix.