As a follow up to my article - Corporate Performance Management Exposed, this article presents a systematic way to help your organization select a tool for its performance management needs. This article leverages Data Management Group's Transform Methodology™ to highlight the value of standardized selection criteria to select the optimal Corporate Performance Management (CPM) tool. This methodology is flexible enough for use by a range of verticals, and supports any size of product purchase budgets. Before it can successfully evaluate CPM tools, however, your organization will need to commit to a strategic plan and critical business objectives. A strong strategic plan with specific objectives creates an optimal environment for leveraging this four-phased methodology. Each of the four phases in this methodology is critical to the tool evaluation process, as it allows your organization to peel layers of hype off each product. This methodology assumes that each phase is completed before moving to the next phase. These phases are:
Identify
At this point, the organization has identified its key processes and key strategic objectives for the CPM application to support. As a result, the strategic objectives are captured in a project scope and shared with the software vendors in the form of a request for proposal (RFP). This RFP sets expectations at a high level with the vested parties, and will involve brainstorming sessions from all the involved vendors on how to go about solving the pains identified for them in the RFP. For instance, if your corporate objective is to raise revenue by 50%, therefore all vendors party to the sales cycle need to have a strategy to help you achieve this specific goal.
Assess
This phase is the heart of the evaluation process and is the most resource intensive; thereby commanding the largest amount of time and effort from all departments in your organization. In this phase, requirements are broken down into three separate areas; organizational, functional, and technical. Requirements for each area are captured in a matrix with a list of requirements along with a weight (importance to your organization) attached to each requirement. In addition, a list of vendors going across the top of the spreadsheet, with relevant scores under each vendor to indicates how well each vendor supports that requirement.
Each of the three areas (organizational, functional and technical) are broken out in separate tabs to come together to form a worksheet with all three areas in spreadsheet. The legend below offers a suggestion as to how to proceed with setting up the weight system:
Nice to have
Important but not essential requirement
Fairly important
Very important
The second piece of each matrix is assigning a grade to each vendor. An ideal starting point is a range of scores between 1 and 4. The legend below offers a starting point, and can be customized to suit your organization's needs.
Does not fulfill requirements
Will be included in future release of the product
Satisfies requirement with code modification
Satisfies requirements out of the box
The organizational requirements tab will include selection factors like cost, local training facilities for the tool, technical support cost, expected increase in support cost, and other selection factors. This tab will help isolate vendors that are out of your organization's price range, or open the door for price negations when multiple tools are running neck-to-neck in the later phases.
The functional requirements tab includes operational areas of your business. For instance, your organization may operate in several countries so it is therefore reasonable to expect any tool you select to support multiple currencies. As foreign currency exchange is clearly a very important business function that needs to be supported in the software you select, it would most likely have a weight of 4.
The final tab is a list of your technical requirements with weights next to them and the list of vendors going across. For instance, if your organization has loyalties to specific operating systems, supporting that platform will be a high importance requirement.
After completing this matrix, it is critical to obtain sign-off from all departments to ensure their concerns are captured in a tangible document. This will make certain that their interests will be included in the evaluation process. Then your organization will have to rate each of the vendors based on market research, discussions with sales representatives from each of the vendors, product demo reviews, and discussions with other customers on how each of your requirements is met by the vendors and then rate each vendor per the legend discussed above.
Develop
This is where your organization develops the installation checklist and plans. This phase requires increased participation of the IT department as they define the technical architecture and the paradigm under which the tool must subsequently fit, and set-up the environment for the proof of concept (POC) in the upcoming phase. Since the top tier applications have made the cut based on the scores received in the previous phase, the key reports and functions for the POC are identified in this phase. In addition, servers are set up for each of the applications. This segues into to the POC/bake off to identify the one application that best fits your organizations needs.
Implement
At this point, all products that have made the cut are invited to the dog-and-pony show to show-off their product capabilities. The key here is to open the POC to become an iterative process if there is a tie between two or more of the vendors. Factors such as price, training and maintenance cost increases all come into play in this phase as the core technologies have been evaluated on merit alone. This is where each tool has its tires kicked and is evaluated on look-and-feel factors. Moreover, this is where negotiations on price can be opened up also. This phase allows the fruits of your hard work and tough negotiations to shine with an optimal CPM application.
Selecting a suitable performance management application is an extensive process and should not be rushed. This process must be deliberate and methodical, thereby allowing your organization to maintain control of the sales cycle. The Transform Methodology, as discussed herein, ensures the best product with the appropriate level of support, relevant training for your support team, professional services to assist in times of need, and technology, is purchased and put to good use at your organization.
Written by Sanjeev Vohra, Data Management Group Senior Consultant
Call 888.394.1664 to find out how Data Management Group can help you with all your business intelligence needs.
To find out how we can help you solve your information challenges, visit our professional services pages:
