Bruce Richardson - AMR Research: What is Business Execution Software and why is it important?

Steve

Hi, this is Steve Hunt, and you're listening to "Business Execution Radio", which until recently was "People Performance Radio", and we've been going through a lot of changes here at People Performance Radio in terms of changing our new format, which is Business Execution Radio, and this reflects SuccessFactors' real focus on what our software here at SuccessFactors is really about, we're dedicated to the mission of increasing workforce productivity, and I've realized what that really is about is about executing our company strategies. If you look at successful companies, it really requires two things: one, figuring out what you need people to do, that is sort of setting your strategy; but then, what is probably the harder part, and more critical, is actually getting people to do it, and SuccessFactors is really dedicated to building systems and helping organizations execute on the strategies and objectives required to effectively deliver their business.

So that's really where our format's going to be, same basic interview format, but just slightly different topic area, and today we're going to be listening to Bruce Richardson, who is the Chief Research Officer for AMR Research, and he's going to share his thoughts around, what is business execution software? - and why is it so important? Why is this an area that has really been neglected in organizations in the software industry in general, and why is the time ripe to really have this field of business execution software?

But before we talk about Bruce, I thought I'd take a few minutes just to share the perspective from a psychological perspective, those of you who listen to this show know I'm an industrial organizational psychologist, and at the end of the day increasing workforce productivity requires getting people to do stuff they weren't doing before, that's really what it's about, it's getting people to increase their effectiveness by acting differently in a way that's going to make the organization more successful, and this is what business execution software's about, so what does it actually, at the heart, of it do, when you get past the marketing? What it really is about, it's about getting really good at setting effective goals, and actually I am just finishing up a white paper that we'll post hopefully fairly soon, that really talks about this whole issue of effective goal setting, which, if there's one of the few truths of psychology, and this is going to sound stupid, but it's often forgotten, is, people are more likely to do what you want them to do if you get really good about telling them what it is exactly you want them to do, yet most organizations really struggle with communicating, what is our strategy? - and how does this strategy relate to what you, as an individual employee or manager, should be doing, trying to accomplish in your day-to-day job? And business execution software, at the core of it, it really is giving companies tools that are very effective for rapidly communicating what people in the company need to do to support the company's strategy, and then tracking that over time, and providing tools to help companies, if people are struggling to achieve those goals - what sort of feedback and guidance can you give them? What can you think about development that'll allow people to successfully achieve the goals that have been set for them? I mean, it's one thing to set goals, it's another thing for people to actually accomplish them, and you need software that does both - that's what business execution software is really about, from a psychological, employee behavior perspective, and there's a lot more we'll be getting into on the topic of effective goal setting, because it's not just telling people what to do. If you look at employees, one of the most complaints you hear on one hand is they say, "We don't know what I'm supposed to do in my job", it's a very common complaint - "Nobody really clearly clarifies what success looks like in my job", but another common complaint is, that's the opposite of that is, "I'm micro-managed, people always tell me exactly what to do, I have no authority or autonomy".

The key to effective business execution is getting very good at goal setting and communication, so people have a clear sense of what they're supposed to do, but they also feel a sense of ownership over those goals, and those goals are both well-defined and also meaningful and motivational, so we'll be talking a lot about that topic in the coming Business Execution Radio software, we'll be talking to a lot of experts in that area as well, as well as people that are both from the applied side and the theoretical side - what does it take to get people to do what you need them to do to drive a company's success?

So that's sort of a high level view of our shift to Business Execution Radio from People Performance Radio, and with that said, why don't we listen to Bruce Richardson, who's the Chief Research Officer for AMR Research give a high level perspective of this whole area of business execution technology in general, so that you can have a better sense of, what is this thing that we've moved onto.

Bruce

How often does your company come up with a top line goal, say increase revenues by x amount, or increase profitability or margins by a certain amount? Maybe launch a new product on time, or early, or maybe it's something else on the number of new customers you'd like to acquire this year? And you sit, and you listen to the goals, and say two things: one, how are we going to do that? Two, how does this apply to me? If I look at the category of business execution software, I want to be able to answer both of those questions. I want to take a goal, let's say it's grow revenues 15% next year - I want to be able to drill that all the way down on sales, on marketing, on engineering if appropriate, I want to know how many new customers that translates into, I want to know the size of the pipeline and the activities to build it and make sure that, as we go down and cascade all of those goals and items, that one, we're going down to the lowest level we have to to ensure that we're doing all of the steps, and then I want to be able to measure that in real time, I want a dashboard where I look at this, and say, "There's no way we're going to meet that goal", or, "We're way ahead of that goal". At the same time, the question of "What's my role" becomes very clear - I'm signing up for a set of objectives, or maybe they're being assigned to me, and I'm going to know instantly whether or not I'm helping us to reach that goal of revenue or profit growth or getting the new product out on time, because this data's all being captured there.

You know, we've never really had systems for really marrying people and corporate performance, we've had people performance systems and we've had financial applications, but what was missing was a way to tie all of these pieces together, not just from software from one vendor, but for all of the transaction systems we have. Now we've got a way to be able to weld those different information streams, but making it personal - "What's my role here?", "Have I accomplished the goals that I promised as help us making our overall goals here?" And I think that's what's the beauty of business execution software - if you think about it, this has been the pieces that we've needed, we've been trying to manage this stuff through phone calls or spreadsheets or project management software or tons of email - now we've automated all of that, so it's going to be clear how well we're doing, how well I'm doing, all in real time, zero latency.

Well, I think that even when the economy turns around, and we're starting to see some positive signs of life, that sadly we're not going to be hiring a lot of people in 2010, so I think the goal is to try and drive higher productivity out of the people you have, and to turn your C players into B players, your Bs into As, and to make sure you retain the As. So one of the things that everybody wants to know is, "What's my responsibility? - how can I contribute to the success of this company?" With the new business execution software that you're rolling out, everyone is clearly aligned with a set of objectives, everything's measured, everything's done in real time, so when you get to the end of the quarter, and you say, "What happened?" - here you've got everything captured within the new SuccessFactors' applications, you know exactly who's supposed to be doing what.

What I like most about SuccessFactors' new products is that we're not talking about doing a total rip and replace of all the software that you've invested in, instead what we're doing is providing a layer that unites all of those different sources of data, but what we're doing is we're making it clear in terms of real time performance management of people and processes, and this is something that's been missing in a lot of the execution software that we've had. We've been able to develop high level goals, but it doesn't always make its way down through the whole organization, so everyone knows what's expected of them. Here you have the software with the ability to track, say, a new product launch, knowing all of the action items that have to be done, the hundreds that went into the planning of the launch of business execution software, to be able to automate that and know in an instant what processes are on target, what activity is being completed, who's doing what, rather than doing the post mortem at the end that says, "Why was this a success?", or, "Why didn't we reach our goals?", you're capturing all this data in real time, so it's a layer that's sitting on top of your existing transaction systems.

This is something the market's been looking for for the whole time I've been in the tech industry, which is now 30 years. The new business execution software brings together many of the technologies that we as analysts are very excited about, you've got the cloud platform, which his going to be the integration platform for tying all of these systems together, and then extending the reach out globally, any time, anywhere, access, so there's the cloud capabilities, there's the new benchmarking, KPIs, dashboards, that are showing you in real time the status of all your various efforts. There's a whole new set of analytic tools, a new workflow engine, that we've had some of these pieces, but never anything that's been so beautifully orchestrated around aligning people, process, with new technologies.

When I first learned about the business execution software, I had a million and one ideas for new ways that this product could be used. One of the most important probably is the launch of a new product, just like we're doing here with the launch of business execution software. What you want to be able to do is not rely on Excel spreadsheets, to make sure that - or worse, yellow pads of paper with little items that you check off - what you want to do is to be able to automate all of that data, you want the tasks and the activities and the people that are assigned to them, and you want to know the status of all of that, preferably in an easy to look at dashboard, where you can just sort of drill down, and find out the real time status, so a new product launch would be great, I think new sales campaigns, new geographic expansion - anything where you're making a big bat and you can't afford to be wrong, you want to be able to focus on that and understand exactly where things are, you don't want reports, you don't want more Excel, you as the CEO want to be able to just look at it, drill down, and get real time data on how well everything is going. This is all about defining true execution - we've always had strategy, we've never had a way to ensure that we're executing against that plan. Now with business execution software, we have that.

And for those of you that are in HR, I hope you're excited about this - what we're seeing is a transformation, or the continuing transformation, of your role of being even more strategic as we go forward. It's clear what many of us have to do to ensure that our firms are successful, what hasn't been clear is, how HR can influence that. By looking at the new systems that are coming in today, you could be the catalyst for help driving the alignment of people and performance to ensure those goals are being met. I think this is a very exciting time for HR people, that there's going to be a whole new wave of tools to help you be an effective change agent. I think it's a very exciting time.

Speaker

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