Shared Performance requested my services to independently assess market opportunity and Go-To-Market (GTM) strategies for the company.  Enclosed are my research and findings.

Key Highlights

• Impressive Track Record: Shared Performance has an industry-leading 14 years of experience in the field of Enterprise Outcome Management (EOM), that the founder invented.
• Industry Agnostic with no Customization: SP has proven case studies in private, public, nonprofit and government with no customization.
• Valuable Patent Protections: SP has been awarded patents that have built a moat since 2010 and which last until 2030.
• Category Creation Potential: SP has the potential to create a new category similar in scale and success to that of Enterprise Resource Planning (ERP).
• Customer Executive Access: SP gains access to boards, CEOs, and profit and loss owners that most software companies crave opportunities to engage with.
• Market Size Opportunity: SP’s estimated market size for just public and private companies and nonprofit organizations is greater than $14.5B annually (without including the government market).
• Multiple Go-To-Market (GTM) Strategies: SP’s default GTM has been direct sales, but significant opportunities to partner with consulting companies, software companies, private equity companies and advisory companies now exist.
• Significant Growth, Licensing and Exit Opportunities: Shared Performance is well positioned for significant growth, partnerships, investment and/or strategic sale.
• Differentiated Artificial Intelligence (AI): SP’s data is not just where you have been, it is also where you are going. Predicting outcomes with AI will be a major differentiation over other AI models.

Vision

Shared Performance is a technology company transforming organizational impact by offering leaders real-time insights into critical outcomes that dictate the achievement of their organization’s strategy and purpose.

History

Over the past 14 years, the company has built an impressive track record validating its outcome-based management approach in combination with proprietary technology within private and public companies, government institutions, and nonprofit organizations.

Outcome management dictates that, for an organization to achieve its strategy, it must achieve a series of outcomes, which are inherently cross-departmental in nature. In the current world, many organizations do not know how many outcomes they must achieve to successfully execute a strategic plan, how various outcomes are related, nor the real-time status of various outcomes. Taking an organization’s strategy and building outcomes back from this starting point will provide organizations with insight on whether their strategies are achievable, and—if not—how to either modify, invest, or re-prioritize to have the greatest success.

SP has developed proprietary software, SP Attain, to enable real-time and ongoing management of outcomes. On a high level, this software allows organizations to 1) visualize the outcomes and activities that are important for them; 2) align, link, and track outcomes in a live, collaborative environment to ensure that progress is being made towards key outcomes; and 3) predict achievement by understanding the status of critical outcomes in real-time.

Why it Matters

Outcome management matters because we live in a world with more software systems/tools, Key Performance Indicators (KPIs), and Objectives and Key Results (OKRs) than ever before—and yet 90% of organizations report an inability to deliver on their strategic plan. What we have gained in granularity has provided interesting (and often rear-view) insights. While this granular information is important to digest and utilize to modify tactics on an individual action level basis, it rarely can provide insight into the likelihood of achieving an organization’s stated strategy.

Despite a general increase in data, there has and continues to be a lack of instant visibility into critical outcomes that tie back to a strategic plan, how these outcomes are interconnected, and where risks to achievement lie. If an organization can see this bird’s eye view, drill down into it, and use the resulting perspective to understand what will happen instead of what has happened, the significant risk of failed objectives can be averted while productivity can be bolstered.  The practical implication of this capability is that it will allow leaders to see where outcomes are at risk months in advance, giving teams the necessary time to make changes to ensure outcomes can be achieved.  In any given year this impact is meaningful, and, on a compounding basis, it can allow an organization to be far ahead of its competitors and ensure realization of mission and vision.

SP is the Game Changer

Shared Performance provides real-time insight into what matters, allowing organizations to align performance, operations, and strategy in one system for the first time. SP Attain features the “HUB” which unites an extensive array of third-party system data into its real-time outcome management platform. This allows SP to:

• Create entirely new datasets based on achievement of outcomes
• Link individuals, teams, and systems to achievement ratings
• Build an achievement network based on the above
• Use achievement data to predict the success of an organization’s strategy

In an age where “data” is the new oil, what could possibly be more valuable than understanding those team members and systems that are most highly linked to critical results and—by extension—realizing an organization’s strategic plan?  This data will revolutionize HR approaches to staffing and the justification or elimination of tools that have significant overhead, but which are often hard to link to impact.

With patent protection since 2010 (and extending to 2030), SP is uniquely positioned to deliver a new category to the market: Enterprise Outcome Management (EOM). The universality of its approach and impact across numerous types of organizations provides tremendous opportunity for partners and investors:

• Shared Performance is well positioned for early partnerships, investments, or strategic sale—as well as licensing opportunities—within the remaining 8 years of its patent window.
• SP is industry agnostic, with no customization required per industry (i.e. private, public, non-profit, and government).
• A direct Go-To Market (GTM) approach has already proven successful, and significant opportunities to partner with consulting companies, software companies and private equity firms offer additional short-term growth potential.
• SP’s outcome-based focus generates an audience with boards and high-level executives, to which partners of all types crave access.
• A market greater than US $13B in annual sales potential exists for SP just for public and private companies and nonprofit organizations —with significant market expansion as organizations include more employees, contractors, and partners in the process.

It is imperative to dive into category creation, as SP is truly bringing a new category to the market: Enterprise Outcome Management (EOM). While more siloed project management tools, highly specific Return On Investment (ROI) tools, and general management frameworks exist in the market, there is no other product which can deliver an outcome-based platform to ensure the delivery of strategic plans for organizations. Category creation of this nature is a challenging effort that is not just about selling a product; it is about selling a new perspective or way of doing things, and often involves a combination of both education and marketing. SP has been on this journey for several years, and we will explore it further in a dedicated section. We will also explore how Enterprise Resource Planning (ERP), a similarly ambitious category at the time, scaled to become one of the largest enterprise software markets globally—thus highlighting the potential for EOM.

To summarize, category creation in the business sphere can be likened to pioneering an uncharted territory. Rather than merely launching a novel product or service, it is about establishing and defining a completely new market category—one that is led and epitomized by an innovative offering. This process entails a departure from conventional norms and requires leading a consumer base towards a groundbreaking method of resolving issues, fulfilling needs, or satisfying desires.

The process of category creation commences with identification or invention of a unique solution that transcends the bounds of existing market categories. Following this, the challenge is to delineate this novel category in a manner that resonates with potential consumers, partners, and possibly competitors. Achieving this often necessitates a coherent and persuasive narrative that expounds what the category entails, its necessity, and how the novel product or service aptly fulfills these criteria.

Attracting consumers and partners to this nascent category is arguably the most formidable challenge. This is not merely about product promotion; it involves advocating a novel perspective or methodology. This typically necessitates a combination of education and marketing—akin to narrating a captivating story that envisages a superior future brought about by this new category. And in this narrative, the novel product or service emerges as the linchpin that makes this future attainable.

In conclusion, as a category creator, SP’s competition extends beyond features or price; its goal is to change the paradigm entirely. It involves persuading stakeholders to perceive a problem, need, or desire from a fresh perspective.

SP is taking the entire market on a journey from a non-unified world where strategic plans exist in an ivory tower and individual departments are managing discrete projects in siloes often disconnected from larger objectives to a place where real-time communication around the status and achievement of key outcomes needed to deliver on the strategy and vision of an organization are constantly aligned. This category is Enterprise Outcome Management.

An Analogous Transformative Management Tool

The Enterprise Resource Planning (ERP) market provides an interesting study on a transformative category that has gained adoption in a widespread manner across all verticals and organization types. Its origins began in a specific vertical, the manufacturing segment, where the need to manage inventory and materials was a critical component of the basic activities (or outcomes) in which these firms needed to be successful. While the use case was straightforward, the technology was anything but; systems were custom designed, expensive to create, required a team of experts to maintain, and took up a lot of space. Eventually, several large software providers, including SAP, Oracle, and JD Edwards, set out to make this software accessible to more businesses.¹ The initial Material Requirements Planning (MRP) revolution occurred in the 1970s.

In the 1980s, MRP II was an evolution of these critical yet complex systems that evolved beyond procurement-related concerns of inventory and raw material management to other departmental functions, unifying data into a broader operational context that increased company performance beyond just a few elements of the supply chain. Keen operators of companies in non-manufacturing verticals began to observe the benefit that integrating data from various operations had on the optimization of manufacturing businesses and began to explore how they may utilize a similar approach to increase performance. These companies collaborated with technology leaders like SAP to create a new category of software which linked data from various financial and operational systems to give a more complete lens into real-time performance than was available previously. This data could be used to improve planning decisions that used to require multiple years and reduce that timeline, enabling superior tactical performance and return on shareholder value. This collaborative effort between technology vendors, companies, and integrators/consultants spanned the better part of 10-20 years and fundamentally shifted what level of insight and data was acceptable for modern management of an organization.

By 1990, industry analysts (Gartner) launched coverage and named the category of Enterprise Resource Planning (“ERP”). These systems linked finance, accounting, sales, engineering, and human resources (HR), to serve as a single source of accurate data for the organization. Currently the ERP software market is one of the largest business software markets in existence, with annual sales of ERP software estimated between US $50-60 billion in 2022 and projected to grow to US $130 billion annually by 2030².

So, what is the reason for covering the ERP market evolution and creation of that category in this report? Well, MRP started because manufacturing firms realized that they couldn’t accurately (and cost effectively) fulfill a core outcome of delivering finished products to end markets if they did not have a clear picture of inventory and the material components of supply chains. Increased competition dictated that they do better. With capital markets evolving in the past 30-40 years—encouraging disruptors and increasing competition—this is no longer true just for physical goods producers but is now key for all companies. Hence, MRP transitioned to ERP and is ubiquitous across industry verticals. We are now at a crossroad where all companies that are seriously competitive in the market have access to data across their

operations—that is the new table stakes. These table stakes are also tactical in nature, even if the data feeds are used as input to strategic planning. Most companies can tell you what happened and have the numbers and figures to back it up. They can frequently tell you “where” success or failure emanated from (although this is frequently confused with “why”). When asked to pinpoint a driver that is connected beyond a KPI that reports past events, however, many executives can’t cogently explain why their strategy was not realized, or how to fix/improve it.

Enterprise Outcome Management (EOM), and SP’s associated software, will provide answers to these questions, much in the way that MRPs and then ERPs provided visibility into the data inside an organization. As 90% of organizations fail to achieve their strategic plans³, the market for this is universal, and we will explore different motivators for different market participants in subsequent sections after a brief review of the competitive landscape and market size.

With current focus and hype on Artificial Intelligence (AI), Shared Performance data may provide unique insights others can’t. Access to data about where an organization has been will help AI learn and recommend what that organization should consider moving forward. When AI can recommend how to increase outcome achievement, or even predict the best outcomes for achieving your strategy, those organizations will be ahead of the crowd.  EOM data through Shared Performance’s patent technology can enable this and will provide valuable context specific training for AI models.

The competitive landscape is full of adjacent technologies that tactically solve specific project management, strategic planning, or performance management concerns—but which are not unified at an organizational level. This statement is not to be meant as critical of such applications, as they do help organizations realize ROI or increase productivity. They are not, however, linked back to a holistic view of strategies and outcomes on a holistic organizational level.

One such tool, Celonis, engages in an activity called “process mining.” Celonis states the following⁴:

• The average company runs its processes over hundreds of systems that don’t play nice together.
• This leaves a lot of room for process inefficiencies.
• These process inefficiencies hurt your business performance.
• Celonis is the system of performance.

Admittedly, Celonis is an impressive tool that has garnered US $2.4 billion in funding from a credible roster of investors, including Accel and Qatar Investment Authority.⁵ They break their solutions into: Process Excellence, Supply Chain Transformation, Shared Services Transformation, Systems Transformation, Finance Transformation, and so on. Their solutions have driven hundreds of millions of dollars individually in return to numerous companies that have invested in their software (which is an outcome). Regardless, Celonis is all about efficiency; this software does not assist organizations with setting and monitoring achievement against strategic plans. Celonis would likely be an ideal partner to SP, and it is not focused on the “what” and the “why.” Rather, Celonis optimizes the “how.”

Project management and workflow tools are abundant, with Jira, Microsoft Planner, ServiceNow, Zoho Projects, and PlanView Enterprise Agile Planning as prevalent players in the market. Similar to Celonis, these tools are largely about execution of already defined plans and are about improving the “how” as opposed to iteratively defining and re-defining the “what” and the “why” through the design, tracking, and iteration of outcomes linked to a central organizational strategy. Modifying these platforms to take an outcome approach is certainly possible, and represents the largest competitive threat to SP. However, SP patents represent a protective moat here—such a move would likely result in infringement.

The focus of these platforms is also largely tactical, not strategic. For example, Planview talks about an agile approach for a whole company and touts “DRIVE AGILE TRANSFORMATION YOUR WAY⁶.” Like Celonis, this is about execution of discrete tasks only and is not linked to strategy. As such, certain of these players may again be favorable go-to-market partners for SP, as SP can elevate the tangible (yet tactical) focus of these platforms and connect their efforts directly to key organizational strategy.

Performance management and traditional HR solutions, from players such as ADP, Workday, etc., also exist in the market. Like many of the other software solutions highlighted above, these are more point-solution oriented in nature, and will be taking inputs from departmental KPIs/OKRs etc. Again, an outcome management approach that SP can bring may enrich such solutions.

Finally, and briefly, there are numerous organizational frameworks for managing an organization. As these are higher level management frameworks, one could call them more strategic or executive in nature. Examples would include The Table Group. Organizations will pay for Table Group consultants to help fix alignment and strategic focus, but there is no product, data linkage, or outcome linkage associated with The Table Group. Departing from the consulting lane, organizations may use frameworks like Balanced Scorecard or Hoshin Kanri to attempt to rank, link, and evaluate many objectives that tie back to organizational strategy—but, these methods even with software products do not provide live views of how various efforts are progressing across and down the entire organization. Again, these organizations and approaches provide a potential go-to-market path for SP. The Table Group is a consultancy whose relevance will increase should they be able to demonstrate outcomes, and firms using a Balanced Scorecard or similar approach represent potential customers that have already adopted an orientation towards strategic planning and thinking, and thus would be ideal early adopters of outcome management software.

Setting organizational strategy is a challenging endeavor, and while SP does not judge whether an organization’s strategy is sound at the outset, the ability to evaluate outcome achievement in the context of multi-year strategies helps to reveal where strategy may be sound or lacking.  This can enhance the utilization of other strategic frameworks such as the Three Horizons model of strategic planning that evaluates current, adjacent, and net new markets.

As the above illustrates, many entities are active in and around outcome management tied to company strategy, but no firms directly attack the linkage of outcomes to strategic objectives. SP is creating a new category, and we will briefly outline some key elements of category creation below before evaluating the drivers that will help SP motivate players in select categories to become co-creators of this game-changing approach to managing organizations and “systematizing achievement.”

The first place to start is a bottom-up analysis of companies that may seek to purchase and implement SP Attain. We will also look at the statistics of another category winner in the ERP software space to triangulate our market sizing.

We have begun with data from the US Census Bureau on companies of a size greater than 500 employees.

Based on information shared by David De Spong at SP, we are making the following assumptions:

• Average amount of seats purchased by a client has ranged from 18%-75% across the sampling of SP clients; for purposes of this report we will conservatively assume 10%, which leaves considerable Net Dollar Retention upside:
• Utilizing client data, average cost per seat per month does scale as organization sizes scale, and ranges from $200 per month to $50 per month; these are estimates as SP is not widely commercialized. Costs can include both products and services as organizations request
  assistance to become self-sufficient with this approach.
• The US market for public and private companiesrepresent, and is forecasted to represent, ~50% of the total market; we have good data from the US Census Bureau on firm counts by employee size, so we start with US market sizing and extrapolate from there ^7,8
• Europe and APAC currently represent about 20% each of the current ERP market, and APAC has higher growth potential ^9,10

As seen above, an estimate for the US public and private market size for SP attain is US $6.5 billion annually, based on firms above 500 employees as being the ideal target market. This is a market of 21,000 customers. Assuming that the US represents roughly half of the market, this would imply a Total Addressable Market of US $13 billion today for organizations globally. As complexity escalates, including multiple locations, time zones and remote workers, even companies of less that 500 employees will need some form of outcome management to remain competitive.

Again, this data applies to the public and private end user market only.

In the US, there are roughly 4,000 nonprofits with greater than 500 employees,¹¹ and, if we assume that the US is half of this market this would imply roughly 8,000 nonprofits of this size globally. While granularity in this data is not as complete as the US Census data, we can assume an Average Contract Value (ACV) of US $ 200,000 across this set. Adding the size of this market to the public and private market, this would imply a total market size globally between non-profits, public and private companies of greater than US $14.5 billion on a bottom-up basis.

It is important to note a few things:

• This does not contemplate the size of the federal and local government markets in the US and globally; these are likely to add several US $ billions to annual market size estimates.
• This is end-user count based; while this is good for understanding the potential market size, the path to market may be through partners in software or consulting arenas.
• This would imply a current market size of roughly 25% of the current global ERP market; this is not unreasonable given that this market is creating a new category, and, as such, we would not expect a Day 1 market sizing to show comparable spend. That being said, there is likely significant growth in this market size as adoption increases over time.

Triangulation

It would be reasonable to triangulate this market sizing against a few vectors. SAP is a market leader in ERP software, with roughly 30% market share¹². This market share is consistent with category winners, and SAP is the category winner in this market. SAP has over 24,000 business partners as clients and 71,350 direct and indirect customers^13,14. Assuming the US market size for public and private clients in our bottom-up estimate is 50%, that would imply a market size globally of 42,000 potential customers for Shared Performance. Adding the 8,000 non-profits, that implies a market size of 50,000. One-third of 50,000 comes out to 16,667. Given SAP’s market adoption and client counts, it would seem that our bottom-up market sizing is valid (and perhaps conservative). It is also interesting to note that SAP boasts 24,000 business partners, which is roughly 1/3 of their total direct and indirect client count.

Why is this Important for All Constituents?

At this stage, we are now ready to dive into the key motivators for constituents to adopt SP. Continuing in the vein of category creation, we will explore how SP is helping various constituents solve problems they didn’t even know that they had. This narrative creation will not be finished in this report alone, but this is a start. Telling the story of SP and why it is changing the world is critical to gather constituents that are more than just early adopters; they will become champions with megaphones. It is my belief that SP, through outcome management and its platform Attain, is doing more than just managing outcomes and unifying strategy, performance, and operations. SP is systematizing achievement, both its measurement and realization… for the first time.

Prior to drilling into each constituent, this report will present some factors that came up on a recurring basis in conversations with investors, operators of businesses, and consultants when discussing why outcome management and SP’s platform would matter to them. Factors that arising for key executives or professional services partners were a) accountability to results, b) urgency, c) ability to execute rapidly, d) the need for differentiation, and e) outcome obsession. While some of these factors are self-explanatory, certain merit a bit more explanation. For instance, urgency came up in the context of survival, evolving landscapes and competition. The need for differentiation came up in the context of how important it is as a part of their business success to look novel in the specific field of management methodologies/how they manage the business (this is different from differentiation of the brand and market in the marketplace, which could be considered part of strategy or an outcome in and of itself). Outcome obsession is not only about winning, but about how these constituents feel that they must prove achievement of strategy or quantitative results to earn the confidence of their stakeholders. Based on these conversations and research, I have summarized findings in the below table. Not shockingly, these matters were relatively important to all constituents, suggesting that there likely needs to be market development in each of the areas. That being said, some potential paths to market show almost universally high ratings. Of note, I will cover industry analysts, but did not have the opportunity to have sufficient conversations with this segment and have thus omitted them from the table.

In summary, Shared Performance is an innovative company (with strong IP defensibility) that is creating a new category which empowers organizations to realize strategic plans with a confidence and clarity that was not previously possible.

Shared Performance has the luxury of proven success in direct sales and is currently cultivating a robust partner network. A further dive into category creation with these partners will add critical ecosystem support to aid SP in the realization of its ambitious vision.

Suggested Next Steps

While there is tremendous opportunity, there continues to be considerable outcomes to achieve on top of what SP has already accomplished.   Risks will increase with growth, and continued diligence is required to progress.  Here are some additional recommendations to prioritize and pursue:

• A deeper dive into EOM category creation
  • I have previously run multi-day category creation team exercises and that will be useful here. This will provide the necessary details that underline my comments above.
• Specific GTM plans and resource strategies
  • Determine who and how each strategy will advance, in conjunction with the other strategies. Consider roadmap to outline path, SP’s progress and providing ongoing leadership.
• Risk mitigation strategies
  • Evaluate existing and new execution risks to continue the protections and diligence to date.
• Another Analogous Transformative Management Tool: Customer Relationship Management (CRM)
  • CRM is another triangulation that is relevant to EOM.
• Market sizing refinement
  • Create more detailed projections including alternatives to US Census data.
• Patent summation
  • Create an executive overview of the existing two patents, the third pending approval and remaining options.