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Oracle, SAP and IBM top Forrester's corporate performance management rankings

The corporate performance management market is thriving despite, or perhaps because of the down economy, according to Forrester Research, with Oracle leading the pack.

Software vendors like to claim that business intelligence (BI) is recession-proof. As the economy worsens, goes the argument, businesses must make the most of their corporate data to streamline operations and retain customers.

The same could be said about corporate performance management (CPM) software, according to Forrester Research, CPM itself being a subset of BI.

In a new report entitled "The Forrester Wave: Business Performance Solutions, Q4 2009" the Cambridge, Mass.-based research firm predicted that the CPM market will grow at an annual compound rate of 12.7% between now and 2012. That would bring total revenues for CPM, which Forrester calls business performance solutions (BPS), to $3.2 billion in 2012, an increase of more than 50% from $2 billion in 2008.

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"With the economic uncertainty we've had, these tools are pretty heavily used," said Forrester analyst Paul Hamerman, who authored the report. "We're seeing forecasting in particular being a pretty big driver [of CPM sales]."

The more popular CPM tools are planning, budgeting and forecasting software, which helps companies manage their financial operations. Companies also use CPM software for financial reporting to meet government and industry regulations, for strategy and performance measurement against predefined goals, and for cost and profitability management to improve profit margins, according to the report.

CPM software typically uses scorecards, dashboards and other visualization tools to let end users monitor corporate data and financial operations.

"BPS has strong long-term growth prospects, and this software category has held up reasonably well in the current recession," Hamerman wrote in his report. "Planning, forecasting, financial reporting, and performance measurement solutions have proven to be essential business tools to deal with economic uncertainty."

As part of his report, Hamerman ranked the leading CPM vendors based on the capabilities of their current offerings, the strength of their strategic visions for future enhancements, and market presence.

Topping the rankings, not surprisingly, are the mega-vendors that also dominate the BI market: SAP, Oracle and IBM.

All three have improved their CPM offerings in recent years through the same acquisitions that bolstered their BI capabilities, Hamerman said. Oracle acquired Hyperion in 2007, while SAP picked up Business Objects and IBM bought Cognos in 2008.

Of the three, Oracle has the best combination of product capabilities and vision, according to Hamerman. "Oracle's broad product set includes the market-leading financial consolidations solution, Oracle Hyperion Financial Management, as well as other strong product offerings within the Oracle Hyperion Enterprise Performance Management family," Hamerman wrote.

SAP has the strongest CPM portfolio in terms of capabilities but trails Oracle in its vision. IBM, on the other hand, scored the highest in terms of vision as it continues to integrate TM1, acquired from Applix in 2007, into its CPM platform.

"This architectural refresh, along with improvements to the application user experience, configuration tooling, and data integration, should help IBM Cognos reassert itself among the upper echelon of BPS," the report states.

SAS Institute and a number of smaller CPM pure-plays, including Clarity Systems, Infor and Tagetik, were also among the highest-ranked vendors.

Visualization, versatility to support multiple lines of business among key criteria

Companies evaluating CPM software should concentrate on a number of key criteria, according to Hamerman. Among them, be sure to select tools that give users the ability to personalize the way information is presented.

"People have different preferences in the way that they consume information," he said. "What they find intuitive in terms of graphical interpretations will vary."

Some users may find fuel gauges and dials the most useful way to visualize corporate performance-related data, while others may prefer drill-down charts and mouse-over features, he said. Luckily, most of the top CPM vendors have improved their visualization options in recent years.

"That's been a relatively recent evolution, in that the solutions have more graphical content," Hamerman said.

Companies should also look for CPM software with the ability to support multiple lines of business, not just finance departments that traditionally use such tools. Sales and HR, for example, can also benefit from performance management software, Hamerman said.

"[CPM software] should also enable organizations to compare certain KPIs to industry metrics via connections to external content publishers," he wrote, as well as be able to connect to multiple data sources within the enterprise.

Finally, companies should consider both smaller CPM vendors as well as the leading mega-vendors SAP, Oracle and IBM. In some cases, Hamerman said, small and medium-sized companies might "find mega-vendors more difficult in terms of manageability," as well as too expensive.

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