PerformancePoint 2007, a new performance management, financial reporting, and budgeting application, will ship mid-2007 and add one more weapon to Microsoft's business intelligence (BI) arsenal, supplementing the company's widely adopted SQL Server BI platform with a variety of BI applications for end users. While the new product will further squeeze traditional BI players, such as Business Objects and Cognos, it presents opportunities for systems integrators to help customers deploy the product and integrate it with their data sources.

What Does Performance Management Mean?

Performance management refers generically to the processes used by companies to measure and track business performance against goals or objectives. Typically, this involves extracting information from core business systems, such as enterprise resource planning (ERP) databases, and presenting that information to users in such a way that metrics, success criteria, and progress toward them are easily discernable. Whether formally implemented or not, all modern businesses practice some form of performance management—at a minimum, all companies track financial results, for instance.

Many businesses also use more sophisticated tools and techniques to gauge corporate performance. For example, key performance indicators (KPIs) provide running numerical and visual representation of specific business metrics (sales of a particular product in a specific region, for instance) against predetermined goals, and are widely used; business scorecards (at least in Microsoft parlance) are consolidated reports that display collections of relevant KPIs, among other business data or measures.

Supports Scorecards, Financial Analysis, Budgeting

PerformancePoint 2007, a new product slated for delivery in mid-2007, will help companies more effectively track and measure business performance. It will include server components, client applications, and utilities for viewing and working with key business data and measures (such as KPIs) and facilitate financial reporting and budgeting. The product builds on familiar and popular Microsoft technologies, such as Windows SharePoint Server, SQL Server, and Office (particularly Excel).

Although Microsoft has not publicly detailed the product's architecture, it will include the following features:

Scorecard capabilities based on Business Scorecard Manager (BSM), released Nov. 2005. BSM provides components that help companies gather and summarize business data from a variety of sources (including SQL Server databases), define and track KPIs based on those data, and present users with scorecards that display KPIs in reports and charts. Scorecards are accessed through intranet sites built on Windows SharePoint Services, the document- and data-sharing service of Windows Server 2003.

Advanced data analysis and visualization features based on tools and technologies Microsoft acquired when it purchased ProClarity in the first half of 2006. ProClarity ships a Web server application that allows users to work with SQL Server Analysis Services data using either a browser or a more full-featured thick client application.

Financial analysis and reporting, budgeting, and forecasting processes will be supported by server and client components in PerformancePoint 2007. Among these components will be a new utility, called Business Modeler, for building financial reporting or budgeting models from underlying data sources (such as a company's general ledger), defining business rules (how revenue is attributed, for instance), and specifying process workflow (such as the review and approval steps for a budgeting process). Business Modeler is designed to allow business users to create models, rules, and workflow with minimal involvement of developers or IT staff.

Unanswered Questions

BSM and ProClarity are currently available as stand-alone products from Microsoft and the company says it will continue to ship both products separately for some time. Eventually, however, these separate products will be available only as features of the PerformancePoint product, which will probably carry a higher price tag. The company says that ProClarity customers with maintenance contracts, and BSM customers with Software Assurance, will receive the equivalent functionality in PerformancePoint at no additional charge, suggesting that those customers will effectively be credited for their existing licenses if they upgrade. How difficult or easy it will be to upgrade existing BSM or ProClarity installations (and associated data and custom extensions) to PerformancePoint is unknown, and will probably remain so until Microsoft releases a public PerformancePoint beta in late 2006.

Microsoft also says that PerformancePoint will eventually become an integral part of the Dynamics line of ERP applications, a logical step for the company to take and one that could make the Dynamics line more appealing to prospective customers. Moreover, the company has said that PerformancePoint will eventually subsume the functionality of the FRx and Forecaster products, which provide financial reporting and budgeting capabilities for the Dynamics line and many other vendors' accounting products. This suggests that FRx and Forecaster may be retired as stand-alone products, which would also likely spell the end of Microsoft's reporting and budgeting support for non-Microsoft accounting products.

Availability and Resources

A public beta of PerformancePoint 2007 is planned for the fourth quarter of 2006. The product will be generally available in mid-2007. Microsoft has not disclosed pricing.

The PerformancePoint home page is office.microsoft.com/en-us/FX101550371033.aspx.

For detail on Business Scorecard Manager, see "Maestro to Direct Business Scorecards" on page 27 of the June 2005 Update.

The ProClarity acquisition is summarized in "ProClarity Acquisition Nets OLAP Client" on page 11 of the May 2006 Update.

Microsoft's SQL Server BI platform is outlined in the Sept. 2005 Research Report, "SQL Server 2005: Microsoft's Business Intelligence Platform."