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June 17, 2003

Lest History Repeat Itself ...

To achieve the promise of business performance management and other new solutions, we need to be mindful of past hopes dashed

by Cynthia Holladay

Continued from Page 1

Since the current key drivers relate to finance and profitability, CEOs and CFOs who haven't previously spearheaded major IT implementations are now intimately involved in figuring out how to buy and use technology. And the vendors, which typically tackle business issues with a technology-driven approach, don't really understand what it takes to apply the applications effectively in the real world. Combine that with a market full of confusing be-all solution descriptions, and we end up with unrealistic expectations built on top of generic technical platforms. Sound familiar? What better recipe is there for breeding FUD in all its glory?

Ironically, the BPM applications are reportedly designed to include metrics for measuring their own ROI, which forces both user and vendor communities to think through such implications!

Case in Point

To illustrate perhaps the biggest issue in complex enterprise endeavors, consider the outcome of Outcome Software. Clint Korver, cofounder of Outcome Software and Decision-Quality LLC, started his career as president and principal consultant of The Decision Company. After receiving his masters and doctorate in decision sciences from Stanford University, Korver focused on applying basic analytic principals to teach companies how to improve strategic decision-making skills. During this time, he and his Decision Company team developed a software product that could be used for modeling and predicting decision outcomes, which led to the forming of Outcome Software.

Korver reflects, "The most salient experiences we had at Outcome was selling three large six-figure systems to Fortune 500 customers that helped them figure out which products to launch in which countries, how to bid multimillion dollar deals, and how to apply relationship pricing models." In all three cases, Outcome had very senior-level champions, who were all the things you'd want in a perfect customer: analytically oriented, mandated the use of the application, and paid them big bucks. However, in Outcome's eyes, the results were less than optimal due to the customers' people and process challenges.

Korver explains: "The broad plans called for hundreds of users, but in the end, the only users were the technically oriented people who brought us in. The customers are happy and will be using the system for a number of years. But from a business standpoint, they aren't deriving as much ROI as they could be, and we aren't getting the repeat business."

Morris concurs. "In almost every successful case in our survey, visionary leaders said that business and people issues came first. People didn't all of a sudden say, 'Hey, there's this great digital dashboard or Balanced Scorecard software that we need.' Instead, they first defined their business process and management structure, and then administered the appropriate training and interfaces that were needed before selecting and implementing the software."

"There's unquestionably a huge need out there," Korver reports. "Some of our original Outcome Software prospects are now coming to us for decision-quality projects, and we've already surpassed our annual revenue goals for the year. Now we're making plans for expansion."

Let's Not Repeat

I believe that there are lessons for both technology users and providers:

For corporate users:

Be brutally realistic; consider people and process above all else.
Start with one application for one function before attacking cross-functional goals.
Remember that the technology is a tool; no out-of-the-box solution can enforce your business strategy.

For technology vendors:

When positioning and selling products, think about long-term business goals that serve both your organization and your customers' requirements.
Analyze the total requirements so that platforms and suites are placed in the proper context and not oversold.

For everyone:

Don't lose sight of your customers and human intelligence resources, which are critical to sustainable business growth.
Even if you meet your project goals by lowering costs, gaining financial visibility, or selling applications, are you ultimately profitable?

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Always apply technology to the need, not the reverse. To build a sustainable business, you must develop a business and marketing strategy that has a true customer focus. Even BPM requires BPM!

Cynthia Holladay [cholladay@uprightmarketing.com] is president of UpRight Marketing, a Palo Alto, Calif.-based consultancy that works with CEOs of high-tech software companies who are building long-term value for their customers and stakeholders.