Summer is over and it's time to get back to work.

Well, it’s the end of the summer here in the Northern Hemisphere and time to get back to business. Summer and vacation are always a nice change, but it’s good to be back working – writing, and talking about Business Intelligence (BI) and Enterprise Performance Management (EPM)!

So, now that we’re back, I’ve been pondering: what will business look like at the end of 2008 and going into 2009?

I don’t want to appear like the harbinger of doom, but businesses continue to be profoundly affected by a declining economy. Overall spending is down and RIFs abound. Although many have not officially cut budgets, they aren’t being allowed to spend them either. One client of mine referred to their spending plans as "fluid". Of course "fluid" implies "flowing", which is certainly not what she meant.

In a recent study that I participated in, almost all organizations are hoping to use EPM solutions to reduce costs. For small enterprises, this means operating more efficiently and better leveraging existing resources. For larger enterprises, it means being able to reduce the workforce and continue to function.

On the brighter side, a slow economy represents an ideal opportunity to focus upon implementing performance management solutions, which will help right now by delivering greater efficiency, but also better position companies when the economy begins to improve.

Still on the brighter side, EPM is enabling new kinds of organizations to emerge and thrive. In a case study that I presented last week at TDWI, I spoke of a young company that outsourced nearly every function – using EPM as the “glue” to hold it together. In Tom Malone’s The Future of Work, he talks about new organizational structures becoming possible as the cost of communications decreases. Well, the cost of communications these days (i.e., The Internet) is practically free. A dividend of this phenomenon is that EPM is now available to any organization – using the Internet.

Accordingly, innumerable Software-as-a-service (SaaS) vendors have emerged, offering less expensive EPM solutions that are relatively easy to buy and implement. Now, I don’t want to seem like a cheerleader for SaaS, but that same study indicated huge interest and openness to SaaS solutions across the board: small and large organizations, IT Departments and business users. So, what does this mean, exactly? Well, at least two big things that I can think of:

1) Smaller, innovative organizations can emerge – anywhere – and rapidly become serious competitors in most any market and

2) The very notion of software is going to change for everyone.

On the supply side, I expect to see a growing number of SaaS-based solutions appear on the scene. Back in 2000, you had to be a dotcom to get funding. Today you have to be a SaaS solution. The large enterprise software vendors will also offer SaaS solutions, but only half-heartedly.

You see, SaaS competes with the dominant enterprise software model (e.g., higher margins). So, for a time, it’ll be like the “wild, wild west” with a myriad of offerings from many smaller suppliers. This is a good thing. There will be amazing innovation until consolidation begins. If you're interested in hearing more about the subject, I recently participated in a webcast with DMReview: http://www.dmreview.com/dmradio/10001661-1.html

So, in spite of a difficult economy, there are some hopeful signs – with EPM as a key enabler of whatever the emerging business and software paradigms turn out to be.

Next month I'll be a keynote at Palladium's Business Performance Conference 2008, in Boston, September 9th - 12th:

http://www.thepalladiumgroup.com/events/exec/Performance/Pages/Keynotes.aspx

Hope to see you there!

All the best,

Howard

Check out my website for details on where I'll be speaking, presentation abstracts, articles, my book and more!