How to turn on world-class performance management using SaaS

• Addressing IT resource constraints
• Stretching an already limited budget for Performance Management
• Demonstrating immediate results to management
• Proving that the effort is moving the organization forward

“Businesses thrive or fail based on their ability to identify, define, track, and act upon Key Performance Indicators (KPIs). Executives and line of business management are increasingly feeling the pressure to establish the right KPIs to enable timelier and more accurate decisions. The faster and more accurately KPIs can be accessed, reviewed, analyzed, and acted upon, the better the chance an organization has for success.” (Hatch, David, The Role of Key Performance Indicators, Aberdeen Group, Page 3, 2007)

Leading organizations that actively engage Performance Management enjoy a distinct advantage over organizations that have not begun the process. These organizations are pro-active and can take corrective action before issues turn into real problems. They invest where they have the best chance of success, and run as efficiently as possible at full momentum.

And Performance Management initiatives are challenging. Organizations have come to believe they need an on-staff guru, mastery of various PM frameworks, a sizable budget, teams of analysts to collect, assess and report on performance information, and a dedicated IT staff to keep information stores armed and ready for the next fire drill. This seems a high price, with the payout being the knowledge that your organization is not flying blind, and that you are making informed decisions that keep you ahead of the curve.

Defining World Class Performance Management

According to a recent study by Aberdeen Research entitled The Role of Key Performance Indicators, Best-in-Class Performance, to be performance management leaders, organizations must:

• Institutionalize a KPI strategy – Best-in-Class companies are instituting a KPI culture for alignment of business strategy and company goals
• Continuously revise KPI definitions – business changes, and as it does, so must the KPI’s used to measure it
• Provide access to KPI information to all decision makers – dashboards, scorecards and auto-alert

In an environment where IT resources are already stretched to capacity, and where there is limited budget for activities like Performance Management, how can business leaders begin the process of making performance management a dynamic and pervasive business practice? In the past these kinds of initiatives came with tremendous cost and effort, with delayed returns. In some instances, projects would begin – and end as soon as the champion left the organization.

Why use a SaaS offering for Performance Management?
Why is the Performance Management market ready for SaaS?

Increasingly businesses are outsourcing the tasks that are not their core competency. This trend is reflected in the explosion of off-shoring, and also underscores the growth of the SaaS market as an avenue for IT to reliably offload the applications that, while mission-critical, do not have to be kept in house to provide competitive differentiation.

There are commonalities in the types of applications that work well within a SaaS model. They include:

• There is a need to deploy information to several different types or profiles of user, who are dispersed geographically
• The number of users is not fixed – the application may grow or shrink depending on organizational dynamics
• Subscribing organizations do not have access to, or wish to assume the cost of, in-house expertise on the application or the business processes behind it
• The application does not have massive data storage requirements
• The application will support a limited number of operating systems
• The application does not require extensive integration with other software systems

Additionally, Performance Management itself is not limited to large-scale CPM systems, but can be deployed and managed at a workgroup level, empowering smaller teams to autonomously deploy systems and manage their own throughput. If they do not have their own dedicated IT resources, a SaaS offering is an attractive option for business users who want to be up and running quickly.

How it works

SaaS clients pay a hosting fee on a regular basis as opposed to paying a one-time, upfront software licensing fee. The application is delivered over a web browser or other thin client. The SaaS vendor assumes all the support, training, infrastructure and security risks in exchange for the recurring subscription fees. The SaaS service model is designed to deliver business applications anywhere, anytime which in turn requires the SaaS vendor to employ dedicated support teams and staff that make themselves available to customer on short notice.

Key benefit: rapid time to value

A SaaS PM offering allows companies to get started quickly without relying on any internal organizational resources. And a SaaS application grows with the client, eliminating the need to have every aspect of Performance Management mapped out for the entire organization before launching an initial pilot.

Independence and autonomy

A SaaS offering provides you with Corporate Performance Management independence. Your future decisions are yours alone; you are not locked in to one vendor’s CPM “platform” strategy.

Reduced risk

SaaS allows your application to grow with you; you don’t need to have everything figured out up front, nor do you have to worry about investing in shelf ware. Typically, you only pay for what you need and your vendors should guarantees high performance and scalability, 24x7 availability and total security.

IT wins too

SaaS solutions allow your IT organization to focus on innovation rather than infrastructure, on creating real business value rather than the care and feeding of data silos, and on developing new solutions rather than maintaining and upgrading old ones. Strategic use of business-centric on-demand services enables IT to confidently outsource important but labor-intensive tasks in favor of more strategic projects.

Committed to customer success

Finally, the SaaS Vendor is ultimately more engaged in a client’s success than an on-premise vendor, because they typically are accountable to stringent Service Level Agreements, and because a dissatisfied client can deactivate, shutting off a valuable recurring revenue stream. It is therefore in the vendor’s best interest to frequently and diligently work to ensure a client’s satisfaction and application usage.

Customer freedom: don’t get trapped by large CPM vendor lock-in or consolidation lag

CPM vendor consolidation

The race among major application vendors to see which company can deliver a complete solution stack is well underway, and it is largely being driven by acquisitions, which could spell trouble for the customers of these organizations. There is the potential risk associated with deploying incompatible technologies that were not designed to work together. There is the risk of uncertain product futures – will the parent company support and grow all of its acquired technologies? Customers need to pay special attention to these factors as well as others such as time to value, technical infrastructure compatibility, product roadmap, commitment to support, and integration plans.

CPM vendor lock-in

Vendor lock-in is where a customer is dependent on a vendor for products and services and cannot move to another vendor without incurring substantial switching costs. Traditional vendors of Corporate Performance Management solutions offered a rich menu for organizations that were looking for a “strategic weapon” that would help them align organizational goals and objectives, but as consolidation started to change the landscape for these vendors, customers were pushed to add components they may or may not need, or were marginalized if they were only using a piece of what was now a much larger BI or CPM platform. Companies who opted for a “future-proof” broader platform vs. a PM point solution increased the time-to-value as implementations would stretch into multiple months and rack up substantial Professional Services fees.

Industry dynamics aside, the key considerations for any organization looking to implement a Corporate Performance Management solution haven’t changed much, and should include:

• Vendor Expertise: how well does this vendor understand Performance Management?
• Time-to-value: large implementations (by large vendors) are extremely costly and will take longer than anticipated. How long can your organization wait to get their Performance Management initiative underway and functional?
• Add-ons, Modules and extra consulting costs: the demo was great, it was seamless and everything ran smoothly, but how closely did the sales process match the vendor’s real-world implementation process? What are the associated consulting costs? How much customization and technical re-programming will be needed in order to get your organization up and running?
• The bake-off: if there is a preference to use a particular vendor, your organization should temper the preference with a bake-off to prove out what will work. In many cases, smaller niche players offer technology agnostic solutions that can be up and running in a much shorter time-frame at a fraction of the cost of some of the larger vendors, offering almost immediate benefits to management and the organization.

How to select a SaaS performance management solution

Look beyond industry references

It’s vital with any large software implementation that the vendor selected is dedicated to your success and can provide references to happy customers. Don’t get bogged down by asking for references to customers just in your industry, look beyond those references and ask to speak to customers that have implementations that are similar in scope or objective. If you are planning to implement a divisional or departmental scorecard – ask to speak to a customer in the same functional area with a similar deployment – regardless of their industry.

Ensure the implementation is about performance management, not technology

Many companies who deliver Software-as-a-Service still place the emphasis on the software that belies their on-premise roots. Regardless of the vendor selected, ensure they are committed first and foremost to service delivery, and that their Professional Services offering is designed to ensure your Performance Management initiative reaches its full potential.

Hold your vendor to fast and frequent milestones

All too often Performance Management projects take months to show progress, which can give project sponsors serious pause about continuing funding and support. Ensure that your team of expert Performance Architects will guide you to reap value from your Performance Management system quickly, whether you are just beginning to identify departmental key metrics, or have a mature vision of orchestrating pervasive Performance Management throughout your organization.

Performance Management solutions: key considerations & benefits

So far we have examined why Software-as-a-Service is a good fit for Performance Management solution delivery. This section will discuss the application attributes that make for a solid and successful project.

Ease of use

The ability to easily understand the functionalities of your Performance Management solution encourages it to be implemented throughout your organization. It should be user-friendly enough for executives and managers alike to quickly hone in on areas of performance, areas for improvement, and trends to enhance decision-making and planning.

Ability to customize strategic framework

Your Performance Management solution should be a tailored system that deals with relevant organizational information. Tracking and evaluating information in appropriate timeframes, customizing the way you see information, and choosing from reports to be produced are all important factors that will maximize the potential of your Performance Management solution.

Enhanced data visualization

Performance Management systems succeed when they provide relevant facts and data about current performance and show what needs to be improved, either immediately or in the future.

A proven solution

There are solutions designed specifically for this purpose, with numerous successful customer implementations in a variety of industries.
What are some of the questions to ask yourself in order to determine if a SaaS Performance Management offering is right for your organization?

Do these statements accurately describe your perspective on Performance Management?

• I do not want the burden and constraints of managing and servicing a software deployment√ I want to have a dedicated resource I can call on to ensure my performance management initiative is delivering the results I require
• I need assurance that my performance data is completely secure and private
• I want a system where I can add users as my needs evolve
• I do not have or am not prepared to dedicate IT staff to implementing and maintaining my Performance Management system
• I do not wish to commit a large amount of upfront capital for software and hardware
• I do not have, nor do I wish to hire, an in-house Performance Management guru
• I do not want to invest time and resources in training users on a Performance Management system

Introducing Actuate OnPerformance

Actuate Corporation recently debuted Actuate OnPerformance, the first Software-as-a-Service (SaaS) solution from Actuate’s Performance Management portfolio. For many years, organizations across industries have taken advantage of Actuate’s Performance Management expertise and reputation for delivering easy to use applications to improve corporate performance. Today, Actuate is leveraging its experience to address a growing segment of organizations that are reluctant to purchase on-premise Performance Management software because of the prohibitive up front cost, enterprise-wide commitment and traditionally low adoption rates such deployments entail. Actuate OnPerformance delivers an easy-to-use, web-based solution that provides a flexible approach to address specific needs and allows organizations to control the expenses typically associated with traditional Corporate Performance Management deployments.

Turn OnPerformance! To speak to a Performance Architect, contact the nearest Actuate Performance Management Center of Excellence or call:
Direct: +1 800 449 3804
Outside North America: +1 416 537 9336
Email: onperformance@actuate.com

Actuate Corporation
2207 Bridgepointe Parkway
Suite 500
San Mateo, CA 94404
Tel: (888) 422 8828
www.actuate.com
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Actuate Performance Management Center of Excellence
150 John St.
Suite 600
Toronto, Ontario, M5V3E3, Canada
Tel: (800) 449 3804