By Chris Alliegro [bio]
Posted: Aug. 18, 2008

The following an excerpt of a Research Report published by Directions on Microsoft, an independent research firm focused exclusively on Microsoft strategy & technology. More samples of our content, as well as a list of upcoming articles and reports are also available.

PerformancePoint Server 2007, a collection of three business intelligence (BI) applications released in Sept. 2007, could help large organizations streamline financial reporting and budgeting, visualize business data, and analyze and report details about business performance. PerformancePoint Server could also strengthen Microsoft's hand in the increasingly hot BI applications market. However, PerformancePoint Server's complexity could challenge early adopters that jump in without the assistance of a knowledgeable partner.

PerformancePoint Server 2007 is a collection of server and client applications and database components that together support corporate performance management. This loosely defined term refers to the processes that organizations use to track and report important business measures, which can range from individual and team goals to companywide financial results, and to improve overall business health and performance. Typically, performance management products such as PerformancePoint Server aid these processes by extracting, consolidating, and summarizing information from strategic business data sources, such as enterprise resource planning (ERP) systems, and presenting that information to users in a form that makes important goals and progress toward them easily discernable.

PerformancePoint Server 2007 bundles three distinct performance management applications:

PerformancePoint Planning is a set of tools and services for financial planning and reporting processes such as budgeting and year-end financial consolidation. PerformancePoint Planning supports centralized control of financial data using SQL Server Analysis Services databases, which could reduce the data consistency problems that are common in ad hoc processes based on manual reconciliation of Excel spreadsheets. Furthermore, PerformancePoint provides tools that allow business analysts to define and manage financial data with minimal assistance from IT workers or database experts, and an add-in for Excel lets others work with financial data (entering detailed budget requests or generating financial reports, for instance) using Microsoft's familiar spreadsheet application.

PerformancePoint Monitoring is based on the previous Business Scorecard Manager (BSM) 2005. It includes design tools and a Web application for creating and distributing scorecards, which aim to help organizations track business performance and health and flag potential problems by providing workers with concise summaries of critical business metrics (such as average revenue per user, subscriber churn, or employee retention rates). With PerformancePoint Monitoring tools, business analysts can design scorecards, choose from a wide variety of data sources (including SQL Server databases) for compiling the data used in scorecards, and publish scorecards to internal Web sites hosted by Microsoft's SharePoint products. The goal is to provide consistent, high-quality information to decision-makers on an ongoing basis with minimal IT involvement.

ProClarity Analytics Server includes client tools and a Web server application that workers use to view and analyze data stored in SQL Server Analysis Services. Microsoft obtained the ProClarity line in an Apr. 2006 acquisition and planned to incorporate its data visualization capabilities into PerformancePoint Server. Although some features have been included, other features will likely wait until subsequent PerformancePoint releases. In the meanwhile, bundling ProClarity with PerformancePoint could prove helpful to organizations looking for advanced tools to analyze data in SQL Server Analysis, whether from PerformancePoint Server or other sources. The bundle will also help ease the transition to the PerformancePoint product for existing ProClarity customers.

Although the products are largely unrelated technically, each of the three performance management applications can use data stored in SQL Server Analysis Services and relies on familiar Microsoft technologies, such as Windows, SharePoint Server, and Office (particularly Excel). Consequently, Microsoft and its resellers will find PerformancePoint Server makes a natural add-on sale to these technologies, or that PerformancePoint Server sales can "pull through" sales of these supporting technologies. PerformancePoint Server projects will also require considerable expertise in the customer's area of business and existing applications, as well as with Microsoft technology, making them an interesting business opportunity for systems integrators and other Microsoft service partners.

PerformancePoint Server faces some early challenges. It is entering a market that includes more mature competitors, it poses tricky migration issues for customers of Microsoft's earlier business intelligence applications, and its complexity will challenge both potential users and IT staff. Business performance management in general might not fit some organizations. However, for organizations that have Microsoft infrastructure and want to make wider use of performance management, the PerformancePoint Server applications provide a relatively low-cost alternative that deserves serious consideration.

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