• Illustration: PerformancePoint Planning Architecture
• Illustration: PerformancePoint Business Modeler
• Illustration: PerformancePoint Monitoring Architecture
• Illustration: PerformancePoint Dashboard Designer
• Illustration: PerformancePoint Monitoring Dashboard

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 could also strengthen Microsoft's hand in the increasingly hot BI applications market, which has seen major acquisitions in 2007 by Oracle and SAP. However, the combination of incomplete documentation and PerformancePoint's complexity could challenge early adopters that jump in without the assistance of a knowledgeable partner.

Collection of Applications for Performance Management

PerformancePoint Server 2007 is a collection of server and client applications, database components, and business user utilities that support corporate performance management, a loosely defined bit of corporate jargon that 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 improve overall business health and performance. Typically, performance management applications such as PerformancePoint 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 was developed under the code name Biz# (pronounced "biz-sharp") and includes tools for financial reporting, budgeting, and forecasting.

PerformancePoint Monitoring is based on the previous Business Scorecard Manager (BSM) 2005. It includes design tools and a Web application for creating and displaying business performance metrics and reports.

ProClarity Analytics Server includes client tools and a Web server application used mainly for viewing and analyzing data stored in SQL Server Analysis Services, Microsoft's online analytic processing (OLAP) engine. ProClarity also includes several other tools that largely overlap with PerformancePoint Monitoring (ProClarity Dashboard, for instance). These tools will probably not be developed further, although they continue to be supported.

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).

PerformancePoint Planning Adds Financial Tools

PerformancePoint Server 2007 introduces a component called Planning, a set of tools and services intended to solve many of the problems large organizations face with 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. 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 (inputting detailed budget requests or generating financial reports, for instance) using Microsoft's familiar spreadsheet application.

(For an overview of PerformancePoint Planning's architecture, see the illustration "PerformancePoint Planning Architecture".)

Design Tool for Business Users

PerformancePoint Planning's main design tool is called Business Modeler, which is a Windows client application that helps business analysts specify and manage financial processes while minimizing the assistance they require from database administrators (DBAs) and other IT workers. (For a graphic of the Business Modeler tool, see the illustration "PerformancePoint Business Modeler".)

Business analysts use Business Modeler to do the following:

Define models for financial processes. Analysts use Business Modeler to create multidimensional models that represent the accounting structures used in financial processes. For example, for the purposes of forecasting, an organization could create a model that characterizes revenue from its product sales along several dimensions, such as product type, business unit or subsidiary, geography, currency, and time, and defines how revenue rolls up or is attributed in the organization. Models can also be used for supplemental information. For example, a separate model could contain assumptions about exchange rates used for consolidating forecasts across multiple geographies. PerformancePoint ships several predefined model types with associated dimensions; analysts can modify and extend these models to suit their needs.

Create back-end structures for data storage. PerformancePoint Server automatically creates SQL Server 2005 Analysis Services cubes (a special type of database designed to house multidimensional data) that correspond to models created with the Business Modeler tool. Thus, business analysts don't need to learn and use SQL Server's more complex development tools or rely on database developers to create the structures needed to store PerformancePoint models. However, as created, PerformancePoint's cubes contain no actual business data—organizations must populate them with data (from an external system such as a general ledger, for instance), which typically will require the help of database experts or developers.

Define calculations and accounting logic (business rules in PerformancePoint parlance) associated with financial processes. PerformancePoint uses a proprietary language called PerformancePoint Expression Language (PEL) to express rules; PEL is similar to Multidimensional Expressions (MDX), a language for querying multidimensional data sources, such as SQL Server Analysis Services cubes. To help analysts quickly construct rules, the product comes with an assortment of built-in rule templates, including aggregations (such as year-to-date summaries and moving averages) and variances, which could be used to calculate the difference between planned or forecasted product sales with actual product sales, for instance. Rule templates contain the basic structure and PEL syntax for a calculation, with placeholders that analysts use to plug in data fields for the actual calculation. Although the built-in templates simplify rule creation, analysts will need to understand PEL to use the templates or create custom rules.

Specify process workflows and work assignments. Analysts can use Business Modeler to specify the series of tasks (or workflow) in a financial process and assign those tasks to the workers in the organization responsible for completing them. For a forecasting process, for example, an analyst could assign sales representatives the task of contributing quarterly sales forecasts and specify a workflow that dictates forecasts be reviewed and approved by a regional sales manager before being written to the database. PerformancePoint Server uses a proprietary engine for managing process workflow, rather than the NET Framework 3.0's embedded Windows Workflow Foundation workflow engine, but will probably move to that technology in future releases.

Excel for Users, Centrally Managed Data

In large organizations, financial processes such as budgeting and forecasting typically involve the participation of a broad range of workers outside of the organization's finance team. For example, semiannual budgeting processes are an opportunity for managers to request incremental headcount increases and establish capital budgets. Many organizations manage such processes today in an ad hoc manner—finance professionals or business analysts construct budgeting or reporting spreadsheets using Excel, e-mail them to other workers for input, and then consolidate the results by hand.

PerformancePoint Server builds on the popularity of Excel as a financial planning tool, providing an add-in that allows workers to contribute to its financial processes using Excel 2003 or 2007. In Excel 2007, the add-in appears as a new ribbon that gives workers (such as the sales representatives assigned with contributing sales forecasts) access to PerformancePoint models and underlying data and lists the outstanding workflow tasks assigned to those workers.

The add-in accesses model data stored in Analysis Services cubes via a mid-tier Web application called the Planning Server, which tracks and enforces workflow, manages cube updates, maintains an audit trail of those updates, and tracks version information. In this way, PerformancePoint Server eliminates the manual labor of consolidating spreadsheets in ad hoc processes and the problems with data integrity and consistency that often result from those manual steps.

Import Wizard for Dynamics AX

Microsoft has made available a tool that helps organizations import data from databases in Dynamics AX, Microsoft's high-end ERP application, to PerformancePoint business models. For example, the tool could help analysts populate PerformancePoint financial reporting models or establish budget baselines using actual AX data. A wizard helps workers map data elements in AX to those in PerformancePoint models and populate those models once mapping is complete, without imposing data integration projects on IT.

Microsoft has said that PerformancePoint will eventually become the main financial reporting tool for all of its Dynamics ERP applications—in fact, the company has already folded the team responsible for the FRx line of financial reporting and budgeting applications into the PerformancePoint team. (FRx was acquired by Microsoft in its purchase of Great Plains in 2001, and the FRx products had become the standard financial reporting tools for the Dynamics line of accounting and business management applications.) However, Microsoft has not said when it will provide similar data import tools for its other ERP products.

Furthermore, Microsoft will not provide tools that import data from non-Microsoft accounting products—unlike FRx, which provided automatic import for over 50 general ledger products. Although this will inconvenience customers who do not use Microsoft's accounting products, it presents an opportunity for ISVs to build tools to integrate PerformancePoint with other vendors' accounting products.

PerformancePoint Monitoring Extends Scorecards

PerformancePoint Monitoring extends the capabilities delivered in BSM 2005, which was released in Nov. 2005. Like its predecessor, PerformancePoint Monitoring focuses on the creation and distribution of the following:

• Key performance indicators (KPIs), which provide numerical representation of specific business metrics (sales of a particular clothing line in a specific region and reporting period, for instance), goals for those metrics, and typically some kind of visual indicator to represent the state of the metric compared to its goal
• Scorecards, tabular collections of related KPIs—for example, a scorecard might list the individual sales KPIs for all clothing lines
• Dashboards, complex reports that display scorecards along with supplemental information, such as a chart displaying year-over-year sales trends.

Business analysts use PerformancePoint Server's design tools to define KPIs, scorecards, and dashboards and publish them to intranet Web sites built on Windows SharePoint Services (WSS), the document- and data-sharing service of Windows Server 2003, or SharePoint Server 2007. A number of PerformancePoint Server Web Parts let other workers view and interact with published KPIs, scorecards, and dashboards, and KPIs can be based on a variety of data sources, including SQL Server Analysis Services cubes.

(For an overview of the PerformancePoint Monitoring architecture, see the illustration "PerformancePoint Monitoring Architecture".)

Updates in PerformancePoint Monitoring, compared with BSM 2005, include the following:

Improved design tool. PerformancePoint Monitoring gets an overhauled designer called Dashboard Designer. This graphical tool is used for defining KPIs and scorecards and designing and publishing dashboards to SharePoint sites. The tool is a more complete design environment than the BSM 2005 tool it replaces (Scorecard Builder), allowing workers to design and preview KPIs, scorecards, and dashboards before publishing them; Scorecard Builder users constructed KPIs and scorecards, but needed to use SharePoint tools to construct dashboards. Dashboard Designer looks similar to Office 2007 applications. For example, it employs a context-sensitive ribbon, similar to the Office 2007 ribbon, which could help workers more easily find relevant menu options and commands than they could with Scorecard Builder. (For a screen shot of the Dashboard Designer, see the illustration "PerformancePoint Dashboard Designer".)

New dashboard elements and Web Parts. PerformancePoint dashboards are made up of interactive, modular page components called elements—users of the Dashboard Designer construct dashboards by dragging and dropping elements onto a design surface in the tool. For example, one such element supports display of scorecards in a dashboard. Dashboards (and their constituent elements) are rendered on SharePoint sites by a PerformancePoint Web Part called the Dashboard Viewer, which allows users to interact with the dashboard's data (filtering and sorting scorecards, for instance). Among others, PerformancePoint includes new elements based on features previously available in ProClarity. For example, the Analytic Grid can display tabular data from a variety of sources and the Analytic Chart is used for interactive charting. (For a screen shot of a PerformancePoint Monitoring dashboard in a SharePoint Web site, see the illustration "PerformancePoint Monitoring Dashboard".)

Support for additional data sources. PerformancePoint can build KPIs from data stored in Excel Services, the server-based spreadsheet calculation and rendering engine included in some editions of SharePoint Server 2007. In addition, PerformancePoint scorecards can include SQL Server 2005 KPIs. (SQL Server 2005 introduced a feature that allowed developers to construct KPIs based on data stored in SQL Server cubes.) As was true of BSM 2005, PerformancePoint Server 2007 KPIs can also be based on SQL Server or Oracle databases and data stored in SQL Server Analysis Services cubes. (Although early previews of PerformancePoint could connect to SAP's Business Information Warehouse, this feature was cut from the product's final release.)

Visio 2007 Strategy Maps. A tool called the Strategy Map Editor helps business analysts create Visio 2007 diagrams (called Strategy Maps) that display the relationships among the KPIs in a scorecard. For example, a Strategy Map could be used to show how KPIs for department-level cost control projects relate to the KPIs for an organization's overall profitability goals. In general, such diagrams could help workers understand how individual or departmental goals contribute to larger, corporate goals.

Bundles ProClarity Analytics

The Apr. 2006 acquisition of ProClarity addressed a longstanding gap in Microsoft's BI strategy, giving the company a sophisticated set of client tools for visualizing and analyzing data stored in SQL Server Analysis Services cubes. ProClarity includes a thick client called ProClarity Desktop Professional and a Web client called ProClarity Web Professional that let users browse, navigate, and create analytic views (such as charts, graphs, or reports) of cube data, and publish those views to a Web server application called the ProClarity Analytics Server. Once published, other workers can access these views using a Web browser.

Microsoft initially planned to incorporate ProClarity's advanced data visualization capabilities into PerformancePoint Server. Although some of ProClarity's features have been integrated in PerformancePoint—the Analytic Grid and Analytic Chart Web Parts are based on ProClarity features, for instance—integration of other important features has been delayed. Most notably, ProClarity's decomposition trees and heat maps are not integrated. Decomposition trees provide a graphical representation of a cube's complex multilevel, multidimensional structure. Heat maps group data of like value in a color-coded, two-dimensional graphic and could help a user view a large set of KPIs and quickly identify those at risk of not meeting their defined goals, for instance.

Microsoft has said that PerformancePoint Server 2007 will include a complete copy of ProClarity, which gives customers access to that product's data visualization features. However, integration between ProClarity and other PerformancePoint features is limited. For example, PerformancePoint dashboards can link to ProClarity data views (such as heat maps), but those views must be created using ProClarity's client tools and stored in ProClarity's Web server application. In fact, as of Oct. 2007 ProClarity is not even included in the PerformancePoint installation package available to MSDN subscribers. (ProClarity requires a separate download and is installed separately from PerformancePoint's Planning and Monitoring features.)

Future releases of PerformancePoint will likely directly incorporate ProClarity's features and not require installation and maintenance of separate ProClarity tools and infrastructure.

Early Challenges

PerformancePoint Server's promised ease of use, integration with Excel, and low cost could make it a compelling buy among companies that have not yet made major investments in performance management applications.

However, the product enters a relatively crowded field that includes BI specialists such as Cognos and SAS, and broad rivals such as SAP, which acquired BI vendors OutlookSoft in May 2007 and Business Objects in Oct. 2007; and Oracle, which bought Hyperion in Mar. 2007. Although PerformancePoint Server is priced aggressively compared with these products, it shows signs of a version 1.0 product, and Microsoft could initially find it difficult to compete with its more experienced rivals, especially among large customers with advanced IT skills and deep pockets.

Other considerations that existing and prospective customers should weigh include the following:

Migrations could be tricky. With the release of PerformancePoint Server, Microsoft no longer offers BSM and ProClarity Analytics Server as stand-alone products (although customers can still purchase ProClarity Desktop Professional as a stand alone product). Although the company will continue to support both products for some time, most customers will eventually need to move to PerformancePoint Server, which implies data migration projects for IT workers and retraining for end users. For now, customers of ProClarity are safe from such concerns, since Microsoft bundles ProClarity with PerformancePoint Server 2007. However, BSM 2005 customers moving to PerformancePoint Server will face migration hurdles. For example, BSM 2005 KPIs, scorecards, and dashboards are not compatible with PerformancePoint Server 2007; although Microsoft provides tools to help move these items to PerformancePoint, some features will need to be re-created manually.

Business users face learning curve. Design tools such as the Business Modeler and Dashboard Designer allow business analysts to work largely independently of developers or other database experts. Nonetheless, the tools themselves are complex, introduce new concepts (such as the PEL query language), and to be used effectively will require significant knowledge of complex concepts such as corporate accounting methodologies, multidimensional data modeling, and KPI and scorecard design. Compounding these challenges, the company shipped PerformancePoint with major holes in its documentation—for example, the product provides little in the way of "how-to" guidance for designing large-scale financial or scorecard processes. Prospective customers looking at PerformancePoint to support business critical functions, such as year-end financial reporting, should give analysts plenty of time to get up to speed.

Complexity, incomplete documentation could challenge IT. PerformancePoint Server contains three distinct applications, each with a distinct set of software requirements and dependencies, and each requiring multiple physical servers to support deployments of any scale. Organizations could find that deploying and managing any one of these applications adds a measurable burden to its data center operations and DBA staff. Complicating matters, as of Oct. 2007, Microsoft has not documented the product's architecture, how to monitor the overall health of a PerformancePoint Server installation and its constituent services, or how to integrate the product with key external data sources, such as an organization's general ledger. (Available operations documentation focuses mainly on maintaining and backing up PerformancePoint Server's databases.) Finally, the company has not yet produced any monitoring tools (such as a management pack for Operations Manager) for PerformancePoint Server. Although the company will likely fill in the documentation and tools gaps over time, these omissions will probably frustrate and discourage all but the most dedicated, or those working with a knowledgeable systems integrator.

Eliminating overlaps could strand customers, partners. PerformancePoint Monitoring capabilities overlap with other strategic Microsoft products. Perhaps most notably, the recently released SharePoint Server 2007 includes highly touted features for defining KPIs, scorecards, and dashboards and publishing those items to SharePoint sites. Although Microsoft has attempted to distinguish between the two products' target audiences, it seems likely that they were developed in isolation rather than with that distinction in mind. At some point, Microsoft will undoubtedly reduce the overlap, which could strand ISVs, customers, and SI partners that bet on the wrong technology. Although Microsoft appears committed to both products and will probably retain some scorecard and dashboard features in SharePoint, customers planning large-scale, corporatewide scorecard efforts are probably safer building on PerformancePoint Server.

Do the masses need BI? PerformancePoint is one arm of a larger Microsoft strategy aimed at bringing BI data to a wider audience. (Microsoft refers to this strategy as "BI for the masses.") Although PerformancePoint Planning's audience will probably be limited to financial experts and analysts that run financial operations (and the managers that periodically contribute to them) in an organization, the product's monitoring features could see much wider deployment: for example, to support a companywide scorecard program that formally links the performance objectives of all employees and groups to the organization's overall strategic goals. Microsoft itself has begun to implement companywide scorecard programs using PerformancePoint. Nonetheless, while the performance of some types of businesses (a global retailer such as Wal-Mart, for instance) and jobs can likely be reduced to clearly identified, objective measures, others may not be so easily quantified. Furthermore, it has not been demonstrated that the benefit of implementing such a program outweighs the cost of maintaining it and ensuring the data it is based on is accurate and meaningful, and remains so over time. For the time being, companies will probably remain conservative about BI implementations until companywide programs can be carefully considered and planned. Organizations that proceed haphazardly will likely find their efforts not only distracting and misleading to the masses, but an expensive waste of time for IT.

Availability, Pricing, Requirements, and Resources

Microsoft released PerformancePoint Server 2007 to manufacturing in Sept. 2007. As of Oct. 2007, customers can download evaluation versions, and the product is also available for download to MSDN subscribers. General availability is planned for Nov. 2007.

Microsoft has adopted a server plus Client Access License (CAL) model for PerformancePoint, the same model used for BSM 2005 and ProClarity, and PerformancePoint Server 2007 pricing is almost identical to that of ProClarity. The server license for PerformancePoint Server 2007 costs US$20,000 and CALs weigh in at US$195. (BSM 2005 server licenses cost US$5,000 and CALs are US$175.) In addition, PerformancePoint Server 2007 offers a US$30,000 External Connector license that allows organizations to give an unlimited number of nonemployees access to PerformancePoint. For example, a large manufacturer could use an External Connector to allow its suppliers and distributors to input data to aid PerformancePoint budgeting and forecasting, without the manufacturer having to purchase CALs for those suppliers and distributors.

PerformancePoint Server also requires a host of other Microsoft products that will increase the complexity and overall cost of deployment. Minimally, PerformancePoint Server Planning and Monitoring require Windows Server 2003 running SQL Server 2005 Standard Edition for general data storage. (ProClarity can run on Windows 2000 Server or Windows Server 2003, and requires SQL Server 2000 or SQL Server 2005 Standard Edition.) The Monitoring component also minimally requires Windows SharePoint Services 3.0 to give users access to KPIs, scorecards, and dashboards, and the Planning component requires SQL Server 2005 Enterprise (likely running on a dedicated server) for cube and model storage. Furthermore, building KPIs from data stored in Excel Services will require deployment of (or at least access to) SharePoint Server 2007 and purchase of its Standard and Enterprise CALs.

The PerformancePoint home page is www.microsoft.com/business/performancepoint/default.aspx.

Download a trial edition of PerformancePoint Server at www.microsoft.com/business/performancepoint/howtobuy/trial-software.aspx.

Detailed PerformancePoint Server system requirements are at www.microsoft.com/business/performancepoint/productinfo/systemrequirements.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."

The SharePoint portal and collaboration platform is detailed in the Apr. 2007 Research Report, "SharePoint Platform Matures, Expands Role."