Published on March 3, 2014
SIMMETHOD A new way to measure and predict your corporate risk and performance Was Salesforce Performance Predictable? 3/3/2014 WWW.SIMMETHOD.COM 1
SIMMETHOD Strategy & Execution Performance Predictive Index On February 28, Seeking Alpha Trefis Notes of the Day published the following observations: • “Steep Net Income Decline Despite Tax Benefit Underlies Salesforce's Lopsided Growth Strategy” 3/3/2014 WWW.SIMMETHOD.COM 2
SIMMETHOD Strategy & Execution Performance Predictive Index • “Margins for the company continued to tread a downward trajectory as operating expense grew even faster than revenue for the third successive year. Salesforce posted an GAAP operating loss of $286 million for FY14, which translates into a staggering -7% operating profit margin”. 3/3/2014 WWW.SIMMETHOD.COM 3
SIMMETHOD Strategy & Execution Performance Predictive Index • “We expect to see continued erosion in margins for Salesforce in the near term, as competition intensifies within the cloud enterprise software industry and Salesforce’s increases its investments to increase its lead over competitors”. 3/3/2014 WWW.SIMMETHOD.COM 4
SIMMETHOD Strategy & Execution Performance Predictive Index • “What’s more worrying is that Salesforce’s loss before tax deductions nearly tripled, increasing from a loss of $128 million in the previous year to $358 million in fiscal 2014”. 3/3/2014 WWW.SIMMETHOD.COM 5
SIMMETHOD • 3/3/2014 Was Salesforce performance predictable based on the SIMMETHOD Strategy and Execution Performance Predictive Indices? WWW.SIMMETHOD.COM 6
SIMMETHOD Risk and Opportunity Alerts 3/3/2014 WWW.SIMMETHOD.COM 7
The Way We Measure Corporate Performance Is Broken Mervyns Circuit City Wachovia Washington Mutual Borders Blockbuster 3/3/2014 Why do Businesses fail? WWW.SIMMETHOD.COM Linen n’ Things 8
The CEO Lament in the Business Analytics Market • We did not see it coming. All my Divisions and Product’s Analytics pointed North while my Business as a whole (in comparison to new competitors and the BestIn-Class in multiple industries) went South. 3/3/2014 WWW.SIMMETHOD.COM 9
Disrupting the Way We Measure Corporate Risk and Performance There are three main problems: • The lack of a single industry-agnostic scale to measure and predict corporate strategy & execution (competitive advantage) leads to erroneous and inconsistent C-level visibility and decision-making 3/3/2014 WWW.SIMMETHOD.COM 10
Disrupting the Way We Measure Corporate Risk and Performance • Silos-analytics and leading indicators that lead to erroneous C-level decisions based on many versions of the truth unintegrated to business strategy and objectives 3/3/2014 WWW.SIMMETHOD.COM 11
Disrupting the Way We Measure Corporate Risk and Performance • C-level risk and performance metrics and ratios based on industrial-era analytics that were not designed to capture intangible values or the dynamic relationships between businesses and their value chains 3/3/2014 WWW.SIMMETHOD.COM 12
Silos Analytics Lead to Many Versions of the Truth and Erroneous Decisions 3/3/2014 WWW.SIMMETHOD.COM 13
Lack of Business and Value-Chain Leading Indicators and Risk Alerts Maximum Risk, Minimum Visibility Company view InwardLooking Analytics 3/3/2014 Value-Chain and Market Leading Indicators and Risk Alerts SIMMETHOD™ industry view indicators & alerts SIMMETHOD™ value-chain view, leading performance indicators & alerts SIMMETHOD™ global market view leading risk/ performance indicators & alerts database Minimum Risk and Maximum Visibility WWW.SIMMETHOD.COM 14
The Leading Indicators and Risk Alerts of the Best-In-Class Why do you need Industry Agnostic Leading indicators and Risk/Opportunities Alerts? • In an interdependent Market (like the Planets in the solar system) your current and future risk and performance are impacted by an ecosystem of constantly changing competitors coming from inside and outside your Industry. 3/3/2014 WWW.SIMMETHOD.COM 15
Your Gap to SIMMETHOD’s Best-In-Class Determines Your Risk and Performance Gap to B-I-C in your industry Your original targets against SIMMETHOD Database Your current position against the B-I-C and competitors Gap to Competitors in a range of industries Gap to B-I-C in a range of industries 3/3/2014 WWW.SIMMETHOD.COM 16
SIMMETHOD’s Disclaimer • The purpose of the SIMMETHOD Strategy/Execution Performance Predictive Index, Reports and Risk/Opportunities Alerts is not to make a Business right or wrong but rather contribute towards the understanding of management actions in comparison to industry peers and the SIMMETHOD Best-InClass. 3/3/2014 WWW.SIMMETHOD.COM 17
SIMMETHOD’s Disclaimer • SIMMETHOD’s Strategy/Execution Performance Predictive indices, metrics and risk/opportunities alerts do not seek to be exact but rather serve as a conduit to ask better questions and seek better answers in the performance improvement, risk minimization and value creation journey. 3/3/2014 WWW.SIMMETHOD.COM 18
SIMMETHOD’s Disclaimer • Sometimes, the value of a metric in itself does not provide the greatest of insights, but valuable actionable knowledge is gained from its ability to provide a trend or a common comparison yardstick with other Businesses across a range of industries. 3/3/2014 WWW.SIMMETHOD.COM 19
SIMMETHOD’s Disclaimer • This report is for informational purpose only and SIMMETHOD shall not be liable for the contents of the report or risk/opportunities alerts or for any damage incurred or alleged to be incurred to any of the Businesses included in the Report as a result of its content 3/3/2014 WWW.SIMMETHOD.COM 20
SIMMETHOD • 3/3/2014 Was Salesforce performance predictable based on the SIMMETHOD Strategy and Execution Performance Predictive Indices? WWW.SIMMETHOD.COM 21
SIMMETHOD’s C-Level Indices Business Trends 2012-2013 Salesforce and the Best-In-Class The following C-Level indices show Salesforce ability to: • Strategize and execute against the SIMMETHOD Best-In-Class • Compete against the Best-In-Class and current and future competitors and are leading indicators of future performance and business risk 3/3/2014 WWW.SIMMETHOD.COM 22
SIMMETHOD’s C-Level Indices Business Trends 2012-2013 Salesforce and the Best-In-Class • When the Best-In-Class and your SIMMETHOD C-Level indices are moving in opposite directions your ability to compete weakens in proportion to your widening gap to the Best-In-Class 3/3/2014 WWW.SIMMETHOD.COM 23
25 20 15 SIMMETHOD’s C-Level Indices Business Trends 2012-2013 Salesforce and the Best-In-Class Although Salesforce Value Creation Index is pointing North, its Management Controllable Resources and Business Model Indices against the Best-In-Class are pointing South negatively impacting the Performance Predictive Index 10 salesforce 2012 Salesforce 2013 Average 2013 BIC 5 0 -5 -10 SIMMETHOD SIMMETHOD Value SIMMETHOD Management Creation Index Minimum Controllable Company Business Resources index Model index -15 SIMMETHOD Strategy/ Execution Performance Predictive index -20 3/3/2014 WWW.SIMMETHOD.COM 24
SIMMETHOD’s Business Trends Across the Major Indices – 2012 to 2013 15 10 Areas where competitive advantage against the Best-In-Class is being gained or lost salesforce 2012 5 Salesforce 2013 0 -5 -10 -15 -20 3/3/2014 WWW.SIMMETHOD.COM 25
SIMMETHOD Industry and Business Trends Sales and Marketing contribution to Business Value 2012 to 2013 25 Salesforce Sales Index negative score highlights a reduced contribution to business value creation reflected on a below Best-In-Class score for the Strategy/Execution Performance Predictive Index 20 15 10 2012 2013 5 0 -5 Salesforce Strategy /Execution Performance Predictive index B-I-C Strategy /Execution Performance Predictive Index Salesforce Sales Index B-I-C Sales Index -10 3/3/2014 WWW.SIMMETHOD.COM 26
SIMMETHOD Competitive Intelligence Sales and Marketing View 25 20 Salesforce underperforms the BestIn-Class in the Sales and Strategy/Execution Performance Predictive Index SIMMETHOD Sales Index 15 10 SIMMETHOD Strategy /Execution Performance Predictive Index 5 0 Vmware Salesforce Intuit 2013 B-I-C -5 3/3/2014 WWW.SIMMETHOD.COM 27
SIMMETHOD™ Industry and Business Trends HR contribution to Business Value 2012 to 2013 25 Although improved, Salesforce HR Index is negative and was not sufficient to drive its Strategy/Execution Performance Predictive Index above SIMMETHOD’s Best-In-Class 20 15 2012 10 2013 5 0 -5 Salesforce Strategy /Execution Performance Predictive index 3/3/2014 B-I-C Strategy /Execution Performance Predictive Index Salesforce HR Index WWW.SIMMETHOD.COM B-I-C HR Index 28
SIMMETHOD Competitive Intelligence HR View 2013 25 20 Salesforce HR Index is negative and below Best-In-Class level dragging down its Strategy/Execution Performance Predictive Index below the Best-In-Class SIMMETHOD HR Index 15 10 SIMMETHOD Strategy /Execution Performance Predictive Index 5 0 Vmware Salesforce Intuit 2013 B-I-C -5 3/3/2014 WWW.SIMMETHOD.COM 29
SIMMETHOD Risk and Opportunities Alerts • The SIMMETHOD algorithms review business data and stockholders valuation-decisions across business sectors and build industryagnostic indices in order to identify, measure, correlate and predict your strengths, weaknesses, risks and opportunities against your current and potential future competitors from inside or outside your industry. 3/3/2014 WWW.SIMMETHOD.COM 30
SIMMETHOD 2014 Industry and Business Trends • SIMMETHOD’s Strategy & Execution Performance Predictive Indices and trends are not deterministic. Businesses that act on their leading indicators and risk alerts will improve their 2014 performance as will be shown in the forthcoming update of the SIMMETHOD database, performance predictive indices and correlations. WWW.SIMMETHOD.COM 3/3/2014 31
SIMMETHOD Risk and Opportunities Alerts SIMMETHOD is in the top 1% of most viewed in Slideshare and has been “Hot” on LinkedIn, Twitter and Facebook 46 times. 3/3/2014 WWW.SIMMETHOD.COM 32
Jorge Oscar Tabacman firstname.lastname@example.org Twitter ID: SIMMETHOD SIMMETHOD A New Way to Measure and Predict the Risk and Performance of Your Business and Alert You of New Threats and Opportunities 3/3/2014 WWW.SIMMETHOD.COM 33
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