Salesforce 2014, from best in class analytics and crm to best in class performance and risk management

SIMMETHOD
A New Way To Measure And Predict
Your Corporate Risk And
Performance
Are the SIMMETHOD Strategy & Execution
Performance Predictive Index and risk
alerts strong leading indicators of
Salesforce’s future risk and performance?
7/15/2014 1
WWW.SIMMETHOD.BLOGSPOT.COM

SIMMETHOD
Risk and Opportunity Alerts
7/15/2014 WWW.SIMMETHOD.BLOGSPOT.COM 2

SIMMETHOD Strategy & Execution
Performance Predictive Index and Risk Alerts
On June 2, Peter Eavis wrote on the New York
Times Corporate Governance Deal Book:
“Salesforce Bottom Line is Put at Risk by a Slide in
the Company’s Stock”.
“Over the last decade it has, in aggregate,
produced no net income – in fact, its losses were
larger than ever in its last two fiscal years”.
7/15/2014
3

“It is hard to think of another maturing
technology company that has managed to get
investors as comfortable with red ink as
Salesforce”.
“On recent weeks, however, a situation has
been brewing that could holt Salesforce’s
notable run”.
7/15/2014
4

“The trigger could be the recent decline in the
company’s shares that has wiped 20% off
their value”.
“Normally a decline in the price of a stock has
almost no effect on a company’s financial
result or the health of its core operations”.
7/15/2014
5

• “But analysts say that there are
unusual ways in which a falling
share price could expose
vulnerabilities at Salesforce and
directly affect its business
performance”.
7/15/2014
6

“Paying in stock works as long as the stock is performing,
says Jill Lehman, an analyst with CFRA, a forensic
accounting research firm. Once it stop working, the
downward spiral could have a snowball effect”.
“The risks can be seen when comparing Salesforce with
its rivals”.
7/15/2014
7

• “The stock compensation of Oracle for
instance, was equivalent to 4 percent of
its operating expenses in the 12 months
through the end of February. At
Salesforce, it was more than two times
higher, at 13 percent, in the 12 months
through April”.
7/15/2014
8

“Salesforce is competing with companies like
Oracle and SAP with very deep pockets, says
Daud Khan, an analyst with Berenberg Bank”.
“They are doing whatever they can to put up
impressive growth numbers to keep the shares
high, said Peter Goldmacher, a software
analyst with Cowan”.
7/15/2014
9

• “But you can see real signs of stress in
their business. One concern is that the
company is spending a lot in sales and
marketing expenses to bring in new
business. Where they should be getting
scale and leverage, they are not, Mr.
Goldmacher says”.
7/15/2014
10

• “Still, some analysts expect
Salesforce to produce strong
operating results over the coming
months, regardless of what its share
price does”.
7/15/2014
11

SIMMETHOD
• Is Salesforce performance
predictable based on the
SIMMETHOD Strategy and
Execution Performance
Predictive Index and risk
alerts?
7/15/2014 12WWW.SIMMETHOD.BLOGSPOT.COM

The Way We Measure Corporate
Risk and Performance Is Broken
Why do
Businesses fail
or fail to
perform?
Blockbuster
Borders
Circuit City
Mervyns
Wachovia
Washington
Mutual
Linen n’
Things

The CEO Lament in the Business
Analytics Market
• We did not see it coming. All my
products and data analytics
pointed North while my business
as a whole (in comparison to
new competitors and the Best In
Class in multiple
industries) pointed South.

Disrupting the Way You 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

Performance Predictive Index
How to holistically
measure strategy and
execution and
competitive advantage?

• 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 and the market forces that
will have a major impact on
your decisions

Silos Analytics Lead to Many Versions
of the Truth and Erroneous Decisions

• 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

Lack of Business and Value-Chain
Leading Indicators and Risk Alerts
Company
view
SIMMETHOD™
industry view
indicators &
alerts
SIMMETHOD™
value-chain
view, leading
performance
indicators &
alerts
SIMMETHOD™
global market
view leading
risk/
performance
indicators &
alerts database
Inward-
Looking
Analytics
Maximum
Risk,
Minimum
Visibility
Value-Chain and Market
Leading Indicators and Risk
Alerts
Minimum Risk and Maximum
Visibility

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.

The SIMMETHOD Algorithm
SIMMETHOD
Strategy &
Execution
Performance
Predictive Index
Stockholders
valuation and
management’s
rating
C-level strategy
& execution
Business model
Management’s ability
to strategize & execute
against competitors and
the Best In Class
Competitors’
strategy &
execution

SIMMETHOD
Strategy and Execution Performance Predictive Index
• What is Salesforce’s position
within the 2014 SIMMETHOD
Strategy & Execution
League Table?
7/15/2014 23

SIMMETHOD’s C-Level Trends 2012-2014
Salesforce and the Best-In-Class
The following C-Level indices show
Salesforce’s ability to:
• Strategize and execute against the
SIMMETHOD Best-In-Class,
• Compete against the Best-In-Class, current
and future competitors
and are leading indicators of future business
opportunities, risk and performance.

SIMMETHOD
Strategy & Execution Performance Predictive Index
0
10
20
30
40
50
60
70
80
SIMMETHOD
Management
Controllable
Resources Index
SIMMETHOD
Strategy &
Execution
Performance
Predictive Index
7/15/2014 25

SIMMETHOD
-10
-5
0
5
10
15
20
25
30
35
SIMMETHOD
Management
Controllable
Resources Index
SIMMETHOD
Strategy &
Execution
Performance
Predictive Index
7/15/2014 26

SIMMETHOD
-30
-25
-20
-15
-10
-5
0
SIMMETHOD
Management
Controllable Resources
Index
SIMMETHOD Strategy
& Execution
Performance Predictive
Index
7/15/2014 27
Salesforce negative Management
Controllable Resources Index is
having a negative impact on its
2014 Strategy & Execution

SIMMETHOD
-60
-50
-40
-30
-20
-10
0
AT&T
Atos
ThomasCook
Adecco
GrupoTelevisa
FidelityNational…
ComputerSciences
Sodexco
Verizoncomm
AmericanExpress
TimeWarnerCable
CompalElecronics
HP
Expedia
Capgemini
Comcast
Libertyinteractive
Telefonica
VeriskAnalytics
Cablevision
Centurylink
Innolux
SIMMETHOD Management
Controllable Resources Index
SIMMETHOD Strategy &
Predictive Index
7/15/2014 28

SIMMETHOD
Salesforce 2012 to 2014 trend across the
indices of the SIMMETHOD Best In Class
showing:
• Competitive strengths,
• Competitive weaknesses,
• Risk levels and
• Opportunities for improvement in order to
become Best In Class and fend off current
and future competitors
7/15/2014 29

SIMMETHOD
2012 to 2014 Business and Industry Trends
-20
-15
-10
-5
0
5
10
15
Salesforce
2012
Salesforce
2013
Salesforce
2014

SIMMETHOD
2012 to 2014 Business and Industry Trends
-20
-15
-10
-5
0
5
10
15
Salesforce
2012
Salesforce
2013
Salesforce
2014
What are Salesforce’s
2014 value creation
drivers?

SIMMETHOD
Trends against the SIMMETHOD Best In Class
Your level of risk increases when:
• Your data points North and the SIMMETHOD
indices point South,
• Your gap to your peers and the Best In Class is
widening or
• The score of your Strategy & Execution
Performance Predictive Index is not
supported by all the other indices
under management control
7/15/2014
32

SIMMETHOD’s C-Level Trends 2012-2014
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.

SIMMETHOD
-20
-10
0
10
20
30
40
2012 2013 2014
Average B-I-C
SIMMETHOD
Strategy/ Execution
Performance
Predictive Index
Salesforce
SIMMETHOD
Strategy/ Execution
Performance
Predictive Index

SIMMETHOD
-20
-10
0
10
20
30
40
2012 2013 2014
Average B-I-C SIMMETHOD
Strategy/ Execution
Index
Salesforce SIMMETHOD
Strategy/ Execution
Index
The gap between Salesforce and the
2014 SIMMETHOD Best In Class is
widening indicating an increased
level of competitive risk

SIMMETHOD
-20
-10
0
10
20
30
40
2011.5 2012 2012.5 2013 2013.5 2014 2014.5
AxisTitle
Axis Title
Average B-I-C SIMMETHOD
Strategy/ Execution
Index
Strategy/ Execution
Index
Linear (Average B-I-C
SIMMETHOD Strategy/
Predictive Index)

SIMMETHOD
-20
-15
-10
-5
0
5
10
15
20
2012 2013 2014
Avg. B-I-C SIMMETHOD
Management Controllable
Resources Index
Resources index

SIMMETHOD
-20
-15
-10
-5
0
5
10
15
20
2012 2013 2014
Management
Index
Management
index
Widening gap between
Salesforce and the 2014
SIMMETHOD Best In Class
Resources Index
An ever increasing level of
resources are necessary to compete
and create value vs. the B-I-C

SIMMETHOD
-6
-4
-2
0
2
4
6
8
10
2012 2013 2014
Cash/Debt Index
Cash/ Debt Index

SIMMETHOD
-6
-4
-2
0
2
4
6
8
10
2012 2013 2014
Cash/Debt Index
Cash/ Debt Index
When your SIMMETHOD Index points
South and the Best In Class Index
points North your competitive position
is weakened

Is there a disconnect between your raw
data and your SIMMETHOD indices?
• When your raw data (such as
your sales) is trending up and
your corresponding SIMMETHOD
Sales Index is trending down,
your level of risk is
increasing. Why?

Is there a disconnect between your raw data
and your SIMMETHOD indices?
Unlike raw data (e.g. sales), the SIMMETHOD
Sales Index holistically measures:
The resources necessary to deliver $1 of sales
in relation to the Best In Class and
The contribution of your sales to the health
and value of your business in relation to your
peers and the Best In Class
7/15/2014
42

SIMMETHOD
-5
-4
-3
-2
-1
0
1
2
3
2012 2013 2014
Avg. B-I-C
SIMMETHOD Sales
Index
Salesforce
SIMMETHOD Sales
Index

SIMMETHOD
-5
-4
-3
-2
-1
0
1
2
3
2012 2013 2014
Avg. B-I-C
SIMMETHOD Sales
Index
Salesforce
SIMMETHOD Sales
Index
Although Salesforce’s sales are growing, its Sales
Index is moving South and its gap to the Best in Class
is widening indicating an increased level of risk

SIMMETHOD
-10
-8
-6
-4
-2
0
2
4
2012 2013 2014
Avg. B-I-C Overheads
Index
Overheads Index

SIMMETHOD
-10
-8
-6
-4
-2
0
2
4
2012 2013 2014
Avg. B-I-C Overheads
Index
Overheads Index
Although the gap to the B-I-C
is widening, an improvement
on the Salesforce Overhead
Index is a positive sign
7/15/2014 46

SIMMETHOD
-3
-2
-1
0
1
2
3
4
2012 2013 2014
Avg. B-I-C
SIMMETHOD HR
Index
Salesforce
SIMMETHOD HR
Index
7/15/2014 47

SIMMETHOD
-3
-2
-1
0
1
2
3
4
2012 2013 2014
Avg. B-I-C
SIMMETHOD HR
Index
Salesforce
SIMMETHOD HR
Index
The widening gap shows a decreasing
contribution by HR to business value in
relation to the SIMMETHOD B-I-C
7/15/2014 48

SIMMETHOD
Competitive Intelligence
Competitive Intelligence showing:
• Strengths,
• Weaknesses and
• Ability to compete with existing
businesses and potential new
competitors with new business
models, cost structures, distribution
channels and products.
7/15/2014 49

SIMMETHOD
-20
-10
0
10
20
30
40
50
Average B-I-C
SIMMETHOD
Strategy/
Execution
Performance
Predictive Index
LinkedIn
SIMMETHOD
Strategy/
Execution
Performance
Predictive Index
Vmware
SIMMETHOD
Strategy/
Execution
Performance
Predictive Index
IBM SIMMETHOD
Strategy/
Execution
Performance
Predictive index
Salesforce
SIMMETHOD
Strategy/
Execution
Performance
Predictive Index
2012
2013
2014
Salesforce’s SIMMETHOD
Index vs. peers and the
SIMMETHOD B-I-C

SIMMETHOD
7/15/2014
51
-20
-10
0
10
20
30
40
Average B-I-C
SIMMETHOD
Strategy/
Execution
Performance
Predictive Index
SAP SIMMETHOD
Strategy/
Execution
Performance
Predictive index
Microsoft
SIMMETHOD
Strategy/
Execution
Performance
Predictive index
Oracle
SIMMETHOD
Strategy/
Execution
Performance
Predictive index
IBM SIMMETHOD
Strategy/
Execution
Performance
Predictive index
Salesforce
SIMMETHOD
Strategy/
Execution
Performance
Predictive Index
2012
2013
2014
Salesforce Strategy &
Predictive Index trend
vs. peers and
SIMMETHOD’s Best In
Class average

SIMMETHOD
7/15/2014
52
-20
-15
-10
-5
0
5
10
15
20
Avg. B-I-C
SIMMETHOD
Management
Controllable
Resources Index
SAP SIMMETHOD
Management
Controllable
Resources index
Microsoft
SIMMETHOD
Management
Controllable
Resources index
Oracle
SIMMETHOD
Management
Controllable
Resources Index
IBM SIMMETHOD
Management
Controllable
Resources Index
Salesforce
SIMMETHOD
Management
Controllable
Resources index
2012
2013
2014
The gap to the B-I-C indicates that
Salesforce could be vulnerable to
competitors with more efficient
management of resources

SIMMETHOD
7/15/2014
53
0
2
4
6
8
10
12
14
16
18
20
Avg. B-I-C
SIMMETHOD
Value Creation
Index
SAP SIMMETHOD
Value Creation
Index
Microsoft
SIMMETHOD
Value Creation
Index
Oracle
SIMMETHOD
Value Creation
Index
IBM SIMMETHOD
Value Creation
Index
Salesforce
SIMMETHOD
Value Creation
Index
2012
2013
2014
Although it is positive,
Salesforce Value Creation
Index is below peers and the
Best In Class average and its
trend is negative

SIMMETHOD
7/15/2014
54
-20 -10 0 10 20 30 40
2014 Aveg. B-I-C
SAP
Microsoft
Oracle
IBM
Salesforce
B-I-C SIMMETHOD
Minimum Company
Business Model Index
B-I-C SIMMETHOD Value
Creation Index
B-I-C SIMMETHOD
Resources Index
B-I-C SIMMETHOD Strategy/
Predictive Index
Salesforce’s discrepancy between
all the other indices and the
SIMMETHOD Value Creation Index
indicates an increased level of risk
vs. peers and the B-I-C

SIMMETHOD’s Disclaimer
• The purpose of the SIMMETHOD
Strategy/Execution Performance Predictive
Index 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’s peers and the SIMMETHOD
Best In Class.

• SIMMETHOD’s Strategy & Execution
Performance Predictive Index and Risk and
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.

• 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.

• This Presentation is for informational
purpose only and SIMMETHOD shall not be
liable for the contents of the Presentation or
for any damage incurred or alleged to be
incurred to any of the businesses included in
the Presentation as a result of its content.

In summary, are the:
• Strategy & Execution Performance
Predictive Indices,
• Risk and opportunity alerts and
• 7 Laws of Growth and Value Creation
good leading indicators of Salesforce
threats, opportunities, risk and
performance?

Salesforce’s 2014 SIMMETHOD Risk and
Performance Summary Table
Index Value Index trend Trend vs. B-I-C 7 Laws compliance
Sales - - - -
Assets + + - -
Overheads - + - -
HR - - - -
Cash/Debt - - - -
Management
- - - -
Minimum Company
Business Model
- - - -
Value Creation + - - -
- - - -
7/15/2014
60

The SIMMETHOD Algorithm and the 7
Laws of Growth and Value Creation
SIMMETHOD
7 Laws
Integration
/alignment
Benchmarking
inside/outside
your industry
Growth &
value
creation
Resource
contribution
to objectives
Predictive
performance
& risk
Averages &
positive
trends
Minimum
company
/business
model
7/15/2014
61

SIMMETHOD
2014 Industry and Business Trends
• SIMMETHOD’s Strategy & Execution
Performance Predictive Indices and trends
are not deterministic.
• Businesses that act on their SIMMETHOD
leading indicators and risk alerts can improve
their 2014 performance to
Best In Class levels.

SIMMETHOD
Risk and Opportunities Alerts
SIMMETHOD is in the top
1% of most viewed on
Slideshare and has been
“Hot” on LinkedIn,
Twitter and Facebook 50
times.

Jorge Oscar Tabacman
jtabacman@gmail.com
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

Salesforce 2014, from best in class analytics and crm to best in class performance and risk management

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Salesforce 2014, from best in class analytics and crm to best in class performance and risk management