News & Views

January 26, 2010 from Gartner via BOARD International – “…The market for corporate performance management (CPM) suites continues to grow rapidly. Previous years were marked by large-scale vendor consolidation and subsequent portfolio rationalization, while this year has seen a more stable market in which the vendors have focused on execution (particularly the large vendors selling into their existing customer bases). Demand continues despite the difficult economic conditions primarily because CPM has helped to manage costs optimization efforts and is now increasingly employed in supporting growth-based strategies. Vendor offerings from larger vendors and CPM specialists are rich in functionality, with many potential benefits.  However, the market is dominated, in terms of market share, by the three megavendors vendors ( Oracle, SAP and IBM); although they all have strong product portfolios, there is still some uncertainty among users about future product roadmaps.  Additionally specialist vendors continue to offer leading-edge functionality and licensing options that appeal to  organizations that do not want to choose from the megavendors…”

180 View – You will need to register with the BOARD but it’s worth the effort if your’re interested in CPM functionality and CPM vendors.

November 19, 2009 from Forrester – “Three of the largest technology vendors play prominently in this market – IBM, Oracle and SAP. These vendors have entered largely through acquisitions (i.e., Cognos, Hyperion, and BusinessObjects, respectively), but continue to evolve their offerings. Other large vendors in the market include SAS Institute, known primarily for its business analytics technology, and Infor, a large enterprise resource planning (ERP) software player. More specialized players in this Forrester Wave evaluation include vendors that focus on BPS exclusively – Clarity, Host Analytics, Longview Solutions (a subsidiary of Exact Software), and Tagetik. Board International focuses on both BI and BPS with its rapid development toolkit approach. There are also many other vendor playing in BPS space (not included in the Forrester Wave based on inclusion requirements) that offer specific components. These include planning and budgeting solutions (e.g., Adaptive Planning, Centage, Lawson Software, and PROPHIX Software…”

180 View – Forrester calls it Business Performance Solutions while most organizations call it Corporate Performance Management. In either case, it includes strategy management, budgeting and forecasting, financial reporting, consolidation and business intelligence. The article explains CPM and scores the vendors based on surveys, product demos and customer reference surveys. The article is a summary report but it is a good place to start in understanding CPM and some of the vendors.

December 2009 from CAmagazine and written by Michael Burns – “Welcome to this year’s survey on business intelligence and corporate performance management. We received 12 responses from BI/CPM vendors, up from 10 last year…”

September 2009 from CAmagazine – “…Many companies fail to include critical evaluation functionality that takes into consideration key business process requirements (for Corporate Performance Management systems:

• the ability to produce real-time reporting at select points in a business process while scaling the solution to a broad user base; this applies to operational reporting, management reporting and the budgeting process;
• the ability to handle large data volumes or data models in a cost-effective manner that meets both end user and IT needs;
• the ability to meet a planner’s real-time modelling cycle time (from input of drivers to output of key performance indicators and metrics);
• the ability to meet the data access security requirements of your organization’s end users in a cost-effective manner; and
• the ability to produce high-quality financial and management information through built-in preventive and detective data integrity controls…”

180 View – Business Intelligence must be a hot topic. There were two good articles about it in CAmagazine this month. This article agrees with Mark Cane’s article (“Business intelligence for the SME”) in that it’s a “struggle for companies to turn the huge amounts of data they produce into the sort of information that is useful at the right time.” This article also includes discussion of Corporate Performance Management (CPM) systems and the quote above adds some good points to consider in the selection of a CPM system that are often not considered.

December 2008 from CAmagazine and written by Michael Burns– “…According to research and advisory firm Gartner, “Megavendors are beginning to dominate the business intelligence market — in less than one year, Microsoft, Oracle, SAP and IBM will have gone from accounting for a quarter of the market to owning over two-thirds of it.”

The acquisitions represent a growing trend toward providing end-to-end solutions. Initially ERP was a back-office application (financials, distribution, etc.). Then it came to include the front office (CRM, eCommerce). Now it encompasses BI and corporate performance management. ERP systems contain a ton of data that needs to be turned into information. That is BI’s job. CPM includes BI as well as budgeting, forecasting and consolidation…”

July 1, 2008 from Business Finance – “Today’s Best-of-Breed software market offers more to dazzle CFOs than ever before. The pace of innovation is fierce, slackening only when vendors pause to digest their gains after the waves of consolidation that periodically sweep over each sector.

The governance, risk, and compliance (GRC) category, for example, continues to attract new entrants and to generate a bewildering variety of applications for mandates ranging from email retention management to enterprise risk management. John E. Van Decker, research vice president with Gartner Inc., points to a burst of innovation around reconciliations management: “Financial governance software is starting to bring together process-management-type solutions for all of the activities that you need to do before you close the books. These may or may not be managed in larger systems, but you need some type of process to line up these activities and ensure that these things are done…”

Plus, a best-of-breed package can be an attractive option for companies that don’t want to take on a mammoth project at this point. Many organizations are “looking for something that can provide incremental steps to value,” Van Decker notes. “We’re also starting to see more use of software-as-a-service, where companies may want to do something on a 3-year basis, but with the understanding that by the end of that period they will have implemented a much larger set of applications.”

180 View – You will also find lists of products in this article for Corporate Performance Management (they call it Business Performance Management), Business Process Management, Spend Management, Cash Management, Receivables and Collection Management, Fixed Assets Management, Tax Management, Expense Management, GRC (Governance, Risk Compliance) Management and Project Portfolio Management.

We have also seen that some companies try to save time and costs by taking a best of breed product. This is can be a good strategy as long as there is not excessive integration required.

ERP Portal

The objective for this site is to provide an unbiased portal to ERP (Enterprise Resource Planning) systems, ERP Value Added Resellers (VAR’s) and relevant ERP articles.

CPM/BI Portal

The objective for this site is to provide an unbiased portal to CPM (Corporate Performance Management) and BI (Business Intelligence) systems, CPM/BI Value Added Resellers (VAR’s) and relevant CPM/BI articles.

BPI Portal

The objective for this site is to provide an unbiased portal to BPI (Business Process Improvement) systems and relevant articles. BPI is about efficiency and effectiveness as well as about GRC (Governance Risk and Compliance).

November 13, 2007 from CBR – “The deal, valued at $5bn, or roughly $58 per share, would absorb the last-remaining top tier BI (Business Intelligence) pure play vendor still standing…

With the field’s top three vendors (Business Objects, Hyperion, and now Cognos) sold off, players in what’s left of the independent BI market are pointing to opportunities and omissions now that the usual suspects are off the map.”

180 View – ERP systems have been characterized as data rich and information poor. By including BI in ERP (which partly explains the acquisition of Hyperion by Oracle and Business Objects by SAP), organizations should not need to customize their systems to extract or slice and dice their ERP data. Although IBM does not sell ERP systems, they do have big opportunities with Cognos. A portion of IBM’s existing clients will be interested in Cognos, and IBM can also offer their services to Cognos customers. As well, Cognos will be used by some of the customers of the ERP vendors including SAP, Oracle and Microsoft. As IBM does not compete in the ERP space, IBM could be recommended by SAP, Oracle, Microsoft… for Cognos implementations as IBM is not an ERP competitor.

October 17, 2007 from Business Intelligence Network – “In the enterprise market, end users now have fewer choices. If you wish to purchase from your preferred database or ERP vendor, Oracle, SAP, Microsoft, Infor and mid-market focused Exact Software each have a value proposition and products worthy of consideration. The companies recently acquired by these vendors will each attempt to maintain their “open” status regarding connectivity to other transactional systems, but depending on the company, that may get more difficult over time. If you wish to buy your performance management and business intelligence applications from a source database independent vendor, Cognos, SAS, and Clarity Systems are the leaders left standing – for now. In addition, for mid-market to small businesses, there are still plenty of choices. Less well known, but still enterprise-strength KCI has successful clients in the upper end of mid-market to enterprise level. Budgeting upstart Adaptive Planning has stirred up the mid-market with their easy-to-use, hosted planning application, and have started to move up to larger enterprise clients. Centage, Prophix, Alight Planning, Host Analytics and Satori Group are all slugging it out in the mid-market and SMB category.”

180 View – The article refers to Business Performance Management, but we think it’s more often called Corporate Performance Management (CPM). CPM typically consists of strategic planning, scorecarding, budgeting and forecasting, consolidation and business intelligence functionality. It’s a logical progression for ERP vendors to extend ERP to include CPM. It’s happened with the Tier One ERP systems with SAP’s purchase of OutlookSoft and Business Objects, and with Oracle’s purchase of Hyperion. And it’s also happening with mid market ERP systems with Exact’s purchase of Longview. The trend will clearly continue.

September 2007 from CAmagazine and written by Michael Burns – “Our annual CAmagazine software survey is back and this year it’s bigger than ever. We combined all our surveys — accounting/ERP, customer relationship management, business intelligence/corporate performance management and professional services automation — into this issue…”

September 17, 2007 from Canada IT.com – “Exact Software, one of the world’s leading providers of business software solutions and Longview Solutions, a leading provider of Corporate Performance Management (CPM) software solutions, today jointly announced the signing of an agreement for Exact to acquire Longview.”

180 View – The trend continues as ERP vendors extend their system to include Corporate Performance Management. Oracle acquired Hyperion. SAP acquired OutlookSoft. I am waiting for Microsoft to acquire Cognos. In the meantime, Cognos continues to grow with the recent acquisition of Applix.

September 27, 2007 from CIO Today – “Cognos is acquiring analytics software provider Applix for approximately $339 million. Cognos CEO Rob Ashe said that within the context of the company’s overall strategy for serving large and midsize enterprises, the move will further extend the company’s capabilities to offer innovative financial performance management offerings…”

180 View – Co-incidentally, we were working with a client interested in acquiring a Corporate Performance Management system. Cognos declined to respond to our RFP and Applix did respond but before the Cognos acquisition. There is some overlap between the systems. We think the acquisition will not only increase Cognos market share, but will also favourably raise the price for an acquisition of Cognos.

2007 by PricewaterhouseCoopers – “The research was executed via 200 cross-industry web surveys and four in-depth interviews with organizations whose revenues are greater than $2 billion.

PricewaterhouseCoopers identified five key trends impacting budgeting and forecasting processes:

1. Budgeting and forecasting processes face significant transformation; linkage to strategy is top of mind.
2. Today’s process is too granular and not focused on value-added activities.
3. Underlying technologies and applications lack integration.
4. Finance and operations must be more closely aligned.
5. Standardizing processes and systems is a primary focus of improvement efforts.

Key indicators

1. Fifty-six percent of budgeting and forecasting effort is spent on low value activities including data collection and consolidation, reviews, approvals, and report preparation.
2. Seventy percent of respondents are dependent on spreadsheets for all or a portion of their financial planning activities
3. Management and employee dissatisfaction with the current planning process is high due to the level of granularity and lack of alignment with business strategy
4. Sixty five percent of respondents believe that the strategic relevance of budgeting and forecasting will increase over time, while only five percent expect a decrease
5. More than half of respondents reported that creating closer links between strategy and operations was one of the top two priorities

Conclusions

“To improve and refocus budgeting and forecasting, organizations need to standardize, streamline, and integrate these activities with the company’s short- and long-term goals. If done properly, budgeting and forecasting processes can play a leading role in an organization’s strategic direction by becoming a way to rapidly assess and adapt to a changing marketplace. Companies that take full advantage of an ongoing strategic budgeting and forecasting process will:

• Use budgeting and forecasting as a tool to integrate strategic planning and day-to-day operations.
• Reduce the budgeting cycle time (perhaps even by creating an ongoing rolling forecast process) and improve forecasting accuracy by standardizing data collection and consolidation across the organization.
• Deploy rolling forecast concepts, which extend forecasting beyond year¬end. This reduces the dependency on manufactured deadlines that are not aligned with a constantly changing marketplace.
• Shift the focus of the budgeting and forecasting process from data collection and reporting to target setting, analysis, and ongoing measurement.
• Break organizational silos by using the budgeting and forecasting function as a way to increase collaboration between finance and operations.
• Increase the organization’s understanding of creating value through the budgeting and forecasting process and supporting it with a robust performance-management function.
• Consider developing or using a methodology that provides a flexible approach to changing business processes, technology and systems, organizational structure, and data.”

180 View – The report is 50 pages long and worth a read. Too bad that only organizations with revenues exceeding $2 Billion were included in this study. We think that mid-sized organizations suffer the same problems as the large ones. Our guess is that the indicators would be even greater for the mid-sized organizations.

April 2007 from Deloitte – “In March and April 2004, the Economist Intelligence Unit surveyed 249 senior executives and board members around the world and interviewed a number of corporate directors in North America, Europe and Asia. The report concluded:“While the overwhelming majority of board members and senior executives say they need incisive non-financial information on their companies’ key drivers of success, they largely find such data to be lacking or, when available, of mediocre to poor value…

Almost three years later, Deloitte and the Economist Intelligence Unit worked together to see whether things had changed and conducted the research along much the same lines as before. A global survey fielded in December 2006 obtained responses from 175 senior executives and board members. Then, through January 2007, in-depth telephone interviews were conducted with senior executives and board members at large companies.

Some key findings include:
(1) Existing performance measurement frameworks are inadequate, and the majority of executives perceive a growing need to better understand the underlying drivers of their performance through non-financial measurements.
(2) Though companies are aware of the pitfalls of focusing exclusively on financial performance, the ability of executives to measure and monitor performance through non-financial measurements appears to be inadequate. Companies either do not have or are not sharing critical nonfinancial performance data with their boards.
(3) Despite the dissatisfaction with the quality of non-financial measurements of performance, current impediments to the broader use and greater sophistication of non-financial performance metrics include undeveloped tools, organizational skepticism relating to the value of these tools, unclear accountability for nonfinancial performance, time constraints and the concern that such metrics may convey too much information to competitors.

180 View – Every problem for someone is an opportunity for another. There are many consulting firms and software developers that are standing by to help.

The non-financial data is a key to the balanced scorecard. See our white paper
“Corporate Performance Management – It’s ready – Are You?” for a discussion of balanced scorecard under Scorecarding.