Robotic process automation (RPA) relies on programming or the application of analytical algorithms to execute the most appropriate action in an automated workflow. RPA enables business users to configure a “robot” (actually, computer software) to interact with applications or data sources to process a transaction, move or manipulate data, communicate with other digital systems and manage machine-to-machine and man-to-machine interactions. This technology is gaining increasing notice by finance departments, with good reason: RPA represents an important step beyond simple process automation in that it uses software to execute routine but complex workflows that require judgment. Rather than making an individual check-off a step in a routine approval, a robotic system applies an algorithm that decides the next step. The system thus does what people spend an awful lot of their time doing every day: making judgments that most of the time could be done by a machine.
Robotic Process Automation is a Cornerstone of Digital Finance
Topics: Operations, automation, close, closing, Continuous Accounting, finance, banking, Robotic Process Automation, Accounting
Artificial Intelligence and Machine Learning in Business Applications
The application of artificial intelligence (AI) and machine learning (ML) to business computing will have a profound impact on white collar professions. This is especially true in heavily rules-based functions such as accounting. Companies recognize the transformational potential of AI and ML, but the progression and pace of the adoption of these technologies is unclear. Some applications of AI and ML are already in use but others are a decade or more away from replacing human tasks.
Topics: Big Data, Machine Learning, Office of Finance, Analytics, CFO, finance, CEO, AI, accountants, NLP, Accounting
Continuous Planning Promotes Action, Accuracy and Agility
Continuous planning is a term Ventana Research uses for a high participation, collaborative, action-oriented approach to planning built on frequent, short planning sprints. This enables organizations to enhance the accuracy of their plans because refinements are made at shorter intervals. Short planning cycles enable companies to achieve greater agility in responding to market or competitive changes. “Continuous” also means continuous across the entire organization – planning as an ongoing collaborative dialogue that brings together finance, line-of-business managers and executives. And because it’s high-participation planning and not silo-based, companies can plan with greater accountability and coordination in their operations. This ongoing dialog tracks current conditions as well as changes in objectives and priorities that are driven by markets and the business climate. Continuous planning promotes a forward-looking mindset in planning and reviewing that’s focused on performance improvement.
Topics: Human Capital, Business Collaboration, finance, Business
Kofax Kapow 10 Advances Robotic Process Automation
Kofax offers Kapow, robotic process automation (RPA) software used to acquire information from a range of sources without human intervention and without having to write code. These sources include websites, applications, unstructured documents, data stores and desktop spreadsheets. RPA software does repetitive, low-value work that otherwise may be performed by person. It saves time in these tasks, completing them sooner and freeing skilled individuals to concentrate on work that utilizes their skills to the fullest. One of the earliest uses of software robots was “Web crawling,” which automated rapid collection of data posted on websites, for example, prices and locations. This was the Kofax Kapow’s original purpose, but its scope has expanded. When used to gather information from multiple applications, the software precludes the need for setting up and maintaining a separate data store. This saves time and money while ensuring that the information has come from the authoritative source and that there is no latency in the data. Rather than taking the time to write a program with broad applicability, a robot can be quickly configured to perform a specific task in a way that mimics how an individual does the job.
Topics: Office of Finance, Operations, close, finance, banking, Digital Technology
Ventana Research awarded our Governance, Risk and Compliance (GRC) Business Innovation Award for 2016 to IBM for IBM Regulatory Compliance Analytics, powered by Watson (IRCA). This application of cognitive analytics is designed to streamline the identification of potential regulatory requirements and suggest methods for compliance. In so doing the cloud-based system can cut the time and cost of compliance while creating an effective means of ongoing management and control of compliance processes.
Topics: GRC, Machine Learning, Office of Finance, Dodd-Frank, Risk Analytics, compliance, finance, Financial Services, Watson
The enterprise resource planning (ERP) system is a pillar of nearly every company’s record-keeping and management of business processes. It is essential to the smooth functioning of the accounting and finance functions. In manufacturing and distribution, ERP also can help plan and manage inventory and logistics. Some companies use it to handle human resources functions such as tracking employees, payroll and related costs. Yet despite their ubiquity, ERP systems have evolved little since their introduction a quarter of a century ago. The technologies shaping their design, functions and features had been largely unchanged. As a measure of this stability, our Office of Finance benchmark research found that in 2014 companies on average were keeping their ERP systems one year longer than they had in 2005.
Topics: Big Data, Microsoft, SAP, Social Media, Supply Chain Performance, ERP, FP&A, Human Capital, Mobile Technology, NetSuite, Office of Finance, Reporting, close, closing, Controller, dashboard, Reconciliation, Operational Performance, Analytics, Business Collaboration, Business Intelligence, Business Performance, Cloud Computing, Collaboration, Financial Performance, IBM, Oracle, Uncategorized, CFO, Data, finance, Financial Performance Management, FPM, Intacct
Whatever Oracle’s cloud strategy had been the past, this year’s OpenWorld conference and trade show made it clear that the company is now all in. In his keynote address, co-CEO Mark Hurd presented predictions for the world of information technology in 2025, when the cloud will be central to companies’ IT environments. While his forecast that two (unnamed) companies will account for 80 percent of the cloud software market 10 years from now is highly improbable, it’s likely that there will be relentless consolidation, marginalization and extinction within the IT industry sector driven by cloud disruptions and the maturing of the software business. In practice, though, we expect the transition to the cloud to be slow and uneven.
Topics: Microsoft, Predictive Analytics, Sales Performance, SAP, Supply Chain Performance, ERP, Human Capital, Mobile Technology, NetSuite, Office of Finance, Reporting, close, closing, Controller, dashboard, Tax, Customer Performance, Operational Performance, Analytics, Business Collaboration, Business Intelligence, Cloud Computing, Collaboration, IBM, Oracle, Business Performance Management (BPM), CFO, Data, finance, Financial Performance Management (FPM), Financial Performance Management, FPM, Intacct
Continuous Accounting Enables a Strategic Finance Department
Many senior finance executives say they want their department to play a more strategic role in the management and operations of their company. They want Finance to shift its focus from processing transactions to higher-value functions in order to make more substantial contributions to the success of the organization. I use the term “continuous accounting” to represent an approach to managing the accounting cycle that can facilitate the shift by improving the performance of the accounting function. Continuous accounting embraces three main principles:
Topics: ERP, Office of Finance, Reporting, close, closing, Controller, dashboard, Tax, Analytics, Business Intelligence, Business Performance, Cloud Computing, Collaboration, Financial Performance, CFO, Data, finance, Financial Performance Management, FPM
Office of Finance Research Demonstrates Importance of Using Effective Financial Software
Our recently published Office of Finance benchmark research assesses a broad set of functions and capabilities of finance organizations. We asked research participants to identify the most important issues for a finance department to address in a dozen functional areas: accounting, budgeting, cost accounting, customer profitability management, external financial reporting, financial analysis, financial governance and internal audit, management accounting, product profitability management, strategic and long-range planning, tax management and treasury and cash management. Among the key findings is this: Not using the most capable software is an underlying cause, often unrecognized, of process, analytics and data issues.
Topics: Mobile, Planning, Predictive Analytics, ERP, FP&A, Office of Finance, Reporting, Self-service, Budgeting, close, closing, computing, Controller, dashboard, Tax, Analytics, Business Intelligence, Business Performance, Cloud Computing, Collaboration, Financial Performance, CFO, Data, finance, Financial Performance Management, FPM, Microsoft Excel, Spreadsheets
Make Automating the Office of Finance and Accounting a Priority
Our recent Office of Finance benchmark research demonstrates the importance of using automation to execute finance department functions. Information technology systems do at least two things very well that make better use of people’s time, and both of them can substantially improve organizational performance. First, they eliminate the need for people to do repetitive tasks, which frees them to spend time on more valuable work that requires judgment and skill. IT systems also can be programmed to focus only on relevant information while eliminating the need to get immersed in detail. The latter capability supports a “management by exception” approach, which enables executives and managers to better allocate how and where they spend their time.
Topics: Big Data, Mobile, Planning, ERP, FP&A, Office of Finance, Reporting, Self-service, Budgeting, close, closing, computing, Controller, dashboard, Tax, Analytics, Business Analytics, Business Collaboration, Business Intelligence, Business Performance, Cloud Computing, Collaboration, Financial Performance, CFO, Data, finance, Financial Performance Management, FPM, Microsoft Excel, Spreadsheets
Beqom Simplifies Compensation in Sophisticated Ways
It is more important than ever for businesses to attract and retain the best talent, and managing compensation effectively is an essential tool for doing so. Obviously companies must pay well to compete, but managing salary, merit pay, variable pay and incentives for employees, tracking their hiring anniversaries and conducting accurate performance appraisals make total compensation management a complex process. All of this must be managed within budget and policy guidelines. As organizations grow and require more employees, the challenges multiply and the difficulty increases. Our benchmark research finds that inconsistent execution is the top impediment to effective compensation management for nearly half (47%) of organizations. Software designed for this purpose can help.
Topics: HCM, Human Capital Management, Sales Compensation, Operational Performance, Business Performance, Customer & Contact Center, Financial Performance, Workforce Performance, CFO, Compensation, finance, HR, Talent Management, TCM
Technology Can Enhance Performance in Finance Departments
Finance transformation” refers to a longstanding objective: shifting the focus of CFOs and finance departments from transaction processing to more strategic, higher-value functions. Our upcoming Office of Finance benchmark research confirms that most of organizations want their finance department to take a more strategic role in management of the company: nine in 10 participants said that it’s important or very important. (We are using “finance” in its broadest sense, including, for example, accounting, corporate finance, financial planning and analysis, treasury and tax functions.) Finance departments have the ability and at least an implicit mandate to improve business performance and enable a corporation to execute strategy more effectively. Yet the research shows that becoming strategic is a work in progress. Most departments handle the basics well, but half fall short in areas that can contribute significantly to the performance of their company. More than three-fourths of participants said they perform accounting, external financial reporting, financial analysis, budgeting and management accounting well or very well. But only half said that about their ability to do product and customer profitability management, strategic and long-range planning and business development.
Topics: Big Data, Mobile, Performance Management, Predictive Analytics, Social Media, ERP, FP&A, Office of Finance, Reporting, Management, close, closing, computing, Controller, Tax, Analytics, Business Analytics, Business Collaboration, Business Performance, Cloud Computing, Collaboration, Financial Performance, CFO, finance, Tagetik, FPM
Data-Driven Business Processes Essential for Optimization
When applying information technology to drive better business performance, companies and the systems integrators that assist them often underestimate the importance of organizing data management around processes. For example, companies that do not execute their quote-to-cash cycle as an end-to-end process often experience a related set of issues in their sales, marketing, operations, accounting and finance functions that stem from entering the same data into multiple systems. The inability to automate passing of data from one functional group to the next forces people to spend time re-entering data and leads to fragmented and disconnected data stores. The absence of a single authoritative data source also creates conflicts about whose numbers are “right.” Even when the actual figures recorded are identical, discrepancies can crop up because of issues in synchronization and data definition. Lacking an authoritative source, organizations may need to check for and resolve errors and inconsistencies between systems to ensure, for example, that what customers purchased was what they received and were billed for. The negative impact of this lack of automation is multiplied when transactions are complex or involve contracts for recurring services.
Topics: Big Data, Mobile, Sales Performance, Supply Chain Performance, ERP, Office of Finance, Operations, Management, close, closing, computing, end-to-end, Operational Performance, Analytics, Business Performance, Cloud Computing, Data Management, Information Applications, Information Management, CRM, Data, finance, FPM
Finance Needs Better Analytics and Analytic Skills
Finance and accounting departments are staffed with numbers-oriented, naturally analytical people. Strong analytic skills are essential if a finance department is to deliver deep insights into performance and visibility into emerging opportunities and challenges. The conclusions of analyses enable fast, fully informed business decisions by executives and managers. Conversely, flawed analyses undermine the performance of a company. So it was good news that in our Office of Finance benchmark research 62 percent of participants rated the analytical skills of their finance organization as above average or excellent.
Topics: Big Data, Mobile, Planning, Predictive Analytics, ERP, FP&A, Office of Finance, Reporting, Self-service, Budgeting, close, closing, computing, Controller, dashboard, Tax, Analytics, Business Analytics, Business Intelligence, Business Performance, Cloud Computing, Collaboration, Financial Performance, CFO, Data, finance, Tagetik, Financial Performance Management, FPM, Microsoft Excel, Spreadsheets
What’s Next?: The Interplay of Software and Hardware with Business and Consumers
“What’s next?” is the perennially insistent question in information technology. One common observation about the industry holds that cycles of innovation alternate between hardware and software. New types and forms of hardware enable innovations in software that utilize the power of that hardware. These innovations create new markets, alter consumer behavior and change how work is performed. This, in turn, sets the stage for new types and forms of hardware that complement these emerging product and service markets as well as the new ways of performing work, creating products and fashioning services that they engender. For example, the emerging collection of wearable computing devices seems likely to generate a new wave of software/hardware innovation, as my colleague Mark Smith has noted. This said, I think that the idea of alternating cycles no longer applies. It would be convenient if we could assign discrete time periods to hardware dominance and software dominance, but like echoes as they fade, the reverberations are no longer as neatly synchronized as they once were. Moreover, adoption and adaptation of technology by consumers reflected in the design of work, products and services always lags – and lags in different ways, further blurring the timing of cycles.
Topics: Mobile, Performance Management, Predictive Analytics, Sales Performance, Supply Chain Performance, ERP, Office of Finance, Reporting, Wearable Computing, Management, close, closing, computing, Operational Performance, Analytics, Business Analytics, Business Collaboration, Business Performance, Cloud Computing, Financial Performance, Workforce Performance, finance, FPM
IBM Advances Business Experience in Using Advanced Analytics
The developed world has an embarrassment of riches when it comes to information technology. Individuals walk around with far more computing power and data storage in their pockets than was required to send men to the moon. People routinely hold on their laps what would have been considered a supercomputer a generation ago. There is a wealth of information available on the Web. And the costs of these information assets are a tiny fraction of what they were decades ago. Consumer products have been at the forefront in utilizing information technology capabilities. The list of innovations is staggering. The “smart” phone is positively brilliant. Games are now a far bigger business than motion pictures.
Topics: Big Data, Mobile, Predictive Analytics, Sales Performance, Social Media, Customer Experience, Performance, Operational Performance, Analytics, Business Analytics, Business Collaboration, Business Intelligence, Business Performance, Customer & Contact Center, Financial Performance, IBM, finance, Sales Performance Management, Social, Financial Performance Management, SPSS
All the hubbub around big data and analytics has many senior finance executives wondering what the big deal is and what they should do about it. It can be especially confusing because much of what’s covered and discussed on this topic is geared toward technologists and others working outside of Finance, in areas such as sales, marketing and risk management. But finance executives need to position their organization to harness this technology to support the strategic goals of their company. To do so, they must have clarity as to what big data can do, what they want it to do, and what skills and tools they need to meet their objectives.
Topics: Big Data, Performance Management, Predictive Analytics, Customer Experience, Fraud, Governance, GRC, Office of Finance, audit, Controller, Analytics, Business Analytics, Business Performance, Cloud Computing, Financial Performance, Governance, Risk & Compliance (GRC), Information Management, Operational Intelligence, CFO, compliance, finance, Risk, Financial Performance Management, financial risk management
One of the potential benefits of cloud computing to access business applications and data is its potential to improve the situational awareness of executives and managers. By this I mean their understanding of what’s going on outside their company in addition to what’s happening within it. Today people have access to a trove of information about their own company, which is the result of decades of investment in an expanding range of enterprise transaction systems (ERP, CRM and supply chain management, for example) and convenient data stores that make accessing data easier than ever. But although people have access to internal information, most have big gaps in their knowledge about what’s going on in the outside world. Take, for example, market trends, information about a competitor’s, supplier’s or customer’s financials or industry-specific demand forecasts. Our benchmark research shows that while two-thirds of companies are satisfied with their ability to integrate information from standard internal sources, only 39 percent feel that way about reference or competitive data from external sources and 36 percent about text data from social media.
Topics: Sales Performance, Supply Chain Performance, Operational Performance, Business Performance, Cloud Computing, Customer & Contact Center, Data Integration, Data Management, Financial Performance, Information Management, Workforce Performance, Data, finance, FPM
Anaplan’s software is designed to help organizations across finance, sales and operations improve accuracy, timeliness and collaboration in their business analytics and planning. I recently attended the company’s first user conference, Hub 2013, in San Francisco, which featured customer success stories and latest on product information. Anaplan has built its business on the subtleties of modeling and planning that are shared between sales, operations and finance departments, and it enables them to apply analytics to projections in revenue, sales, forecasting, territory planning, commissions, quotas and profitability – areas that are intertwined through many business processes. Anaplan’s team has more than decades of experience in the analytics and planning software markets that has led to its devised cloud-based, in-memory computing software.
Topics: Big Data, Planning, Sales Performance, Supply Chain Performance, FP&A, Modeling, Operational Performance, Analytics, Business Analytics, Business Intelligence, Business Performance, Cloud Computing, Customer & Contact Center, Financial Performance, Workforce Performance, CFO, finance, Sales Planning
Tidemark Leads New Wave of Innovation in Planning and Performance Excellence
Organizations succeed through continuous planning to achieve high levels of performance. For most organizations planning is not an easy process to conduct. Planning software is typically designed for only a few people in the process, such as analysts, or organizations might use spreadsheets, which are not designed for business planning across an organization. Most technologies only allow you to examine the past and not plan for the future. For decades organizations have tried to focus planning on driving better results through higher participation, but they have usually failed, as technology has not advanced enough to support this business need.
Topics: Big Data, Sales Performance, Supply Chain Performance, Mobile Technology, Operations, Operational Performance, Business Analytics, Business Collaboration, Business Intelligence, Business Performance, Cloud Computing, Cloudera, Customer & Contact Center, Financial Performance, Governance, Risk & Compliance (GRC), Information Applications, Workforce Performance, Business Planning, CFO, finance, Tidemark, Workday
I’ve frequently commented on the artificiality of the emerging software category of governance, risk and compliance (GRC). The term is used to a cover a combination of what were once viewed as stand-alone software categories, including IT governance, audit documentation and industry-specific compliance management, to name three examples. While it’s still common for specific types of software to be purchased piecemeal by different departments, these disparate areas have started a long convergence process. Since just about all controls and risk management efforts require a secure IT environment to be effective, there is a growing interdependence between effective IT governance and everything else connected with enterprise GRC.
Topics: Big Data, Performance Management, Predictive Analytics, Customer Experience, Governance, GRC, Management, Operational Performance, Analytics, Business Performance, Financial Performance, compliance, finance, Risk, financial risk management, IT Risk Management, Sarbanes Oxley, SOX
The Rationale and Agenda for Why Human Capital Management in 2013
Human capital is most organizations’ largest investment and one of their largest differentiators against the competition. So it follows that those that take advantage of the compelling, game-changing technology now available in human capital management (HCM) will place themselves at a competitive advantage.
Topics: Big Data, Social Media, HCM, Human Capital Management, Learning, Office of Finance, Social Collaboration, Analytics, Business Analytics, Business Collaboration, Business Intelligence, Business Performance, Cloud Computing, Information Applications, Information Management, Workforce Performance, CFO, Compensation, finance, HR, Talent Management, Workforce Management
For the past couple of years I’ve been pointing to the importance of in-memory computing to the future of business applications. It’s an integral part of Ventana Research’s business and finance research agenda for 2013, and it’s one of the core technologies that senior executives should have an appreciation for because it can transform all core business processes, especially those that are analytic in nature.
Topics: Mobile, Predictive Analytics, Real-time, Sales Performance, SAP, Supply Chain Performance, ERP, Operational Performance, Analytics, Business Analytics, Business Collaboration, Business Performance, Cloud Computing, Customer & Contact Center, Financial Performance, In-memory, Workforce Performance, CRM, finance, Social, Business Suite, Financial Performance Management, HANA
Saving Microseconds with Informatica’s Ultra Messaging
Increasingly, global financial markets compete on speed, so much so that high-speed trading capabilities have become a performance differentiator for the largest financial services firms and some investment funds. Transmitting messages with quotes, prices and trade data is a core capability for currency dealers. Informatica recently introduced Ultra Messaging, which is designed to offer global currency traders an efficient, high-throughput, lower-latency (that is, faster) and more secure method of linking their worldwide operations.
Topics: Sales, GRC, credit, currency, LAN, Operational Performance, Business Performance, Financial Performance, Informatica, finance, WAN
Business software is beginning to undergo a design revolution comparable to the seismic shift from the green screen to the graphical user interface (GUI) that began in the mid-1980s. Three forces are at work. One is the retirement of large numbers of members of the baby-boom generation and the rise of a generation that grew up with computers and computer games from a young age. Also, software and technology vendors have been recognizing the need to “consumerize” business applications as mobile device interactions, gestures and other newer user interface (UI) conventions, and are incorporating these innovations in their stodgy products. I commented on this in my assessment of Tidemark early this year. A third factor, “gamification” is all the rage in business consulting circles. The idea is to engage younger employees more completely by transforming dull, routine chores into more entertaining pursuits. I join with those skeptical of just how fun one can make clerical tasks. But software can – and should – be made less tedious (and therefore more productive), especially for a new generation of users.
Topics: Big Data, Sales Performance, Salesforce.com, Supply Chain Performance, OpenWorld, Operational Performance, Business Performance, Cloud Computing, Customer & Contact Center, Financial Performance, Oracle, Workforce Performance, Dreamforce, finance, Tidemark, Business, design, development, GUI
Equifax Workforce Solutions for Human Capital Management
Businesses need to simplify HR and compliance processes to save time and reduce risk. Talx, which helps employers address concerns in hiring, pay and compliance, has now assumed the name of its parent company and become Equifax Workforce Solutions [PDF]. HR and finance professionals should recognize the parent company’s brand from its work in the consumer credit industry. The company hopes these professionals will see that Equifax Workforce Solutions offers a better approach to governance, risk and compliance. According to our research, 79 percent of organizations want a better method to identify and manage risks faster.
Topics: Equifax, eThority, GRC, I9, Office of Finance, Operational Performance, Financial Performance, Governance, Risk & Compliance (GRC), Workforce Performance, CFO, Compensation, compliance, finance, Hiring, HR, TALX, Workforce Solutions
Unless you have some combination of a very strong credit rating, a high income-to-debt payment ratio and a relatively low loan-to-value ratio, it’s not especially easy to refinance a mortgage these days. That’s a shame, because there are plenty of people who have stayed current in meeting their credit obligations and whose mortgages are comfortably below current market value who could benefit from today’s record low interest rates. One major reason they can’t refinance is the collapse of non-agency mortgage-backed securities (MBS) – that is, those not backed by government agencies such Federal National Mortgage Association, or Fannie Mae – in the wake of the 2008 financial crisis. The crisis, in turn, was caused largely by the collapse in value of mortgage-backed securities. To be sure, a significant portion of the drop in the issuance of non-agency paper is the lack of demand these days for the risky and even fraudulent sub-prime mortgages that were a root cause of the financial collapse. Yet there would be a bigger market for MBSes (and therefore more money available for refinancing) and less need for U.S. government guarantees if there were greater transparency in the quality of the underlying assets of mortgage-backed securities. Technology exists today that would address the transparency issue relatively easily and inexpensively. In particular, eXtensible Business Reporting Language (XBRL) can provide an efficient and relatively inexpensive means of collecting needed information from a large number of disparate parties without requiring them to standardize or modify their systems.
Topics: Office of Finance, XBRL, Analytics, Business Analytics, Business Performance, Financial Performance, finance, capital markets
How Effective Is Your Company’s Planning for Long-Term Investing?
Effective capital planning and capital investment are vital to a company’s long-term success. The choices a company makes – how much to invest and in which facilities or projects – have a profound effect on its long-term success. For that reason, companies take pains to ensure that these decisions support their long-term strategies and are made as rationally as possible. Because Ventana Research is frequently involved in software acquisition discussions, return on investment is a topic we frequently see raised.
Topics: Planning, Office of Finance, Reporting, Business Analytics, Business Performance, Financial Performance, finance, capital budget, capital spending, FPM
Salesforce Helps Midsize Company Dreams Come True
I cover the meat-and-potatoes aspects of corporate computing. I also pay attention to the special needs of midsize companies (by our definition, those with between 100 and 999 employees), which are unlike those of either small business or large corporations. After attending this year’s Dreamforce conference, Salesforce.com’s annual user meeting held this week in San Francisco, I can appreciate how difficult it is for executives and people who work in back office functions to cut through the technology hoopla to find the utterly practical (but certainly not dull) reasons why the cloud can help them run their businesses better. In fact, cloud-based software-as-a-service (SaaS) offerings can give midsize companies a leg up in ways that on-premises alternatives can’t. Here are four big ones that top my list.
Topics: Sales, Sales Performance, Salesforce.com, Social Media, ERP, Office of Finance, CRM customer service, SMB, Business Performance, Cloud Computing, Customer & Contact Center, Financial Performance, Dreamforce, finance, Security, FPM
What a Bugatti Can Teach Us About Information Management
One of the community groups to which I donate my time is an organization that puts on a Concours d’Élegance – a vintage car show. Such Concours date back to seventeenth-century France, when wealthy aristocrats gathered to see who had the best carriages and most beaudacious horses. Our Concours serves as the centerpiece to a broader mission of raising money for several charities. There a many such events in the United States and elsewhere, but this one, which has been held every year since 1956, has the distinction of being the longest continuously running Concours in the United States.
Topics: Big Data, GRC, IT Performance, Operational Performance, Business Analytics, Business Intelligence, Business Performance, CIO, Financial Performance, Information Management, Operational Intelligence, CFO, finance, Talent Management, FPM
Good Data Stewardship Is Critical for Business Analytics
Our research consistently finds that defects in data are the root cause of a wide range of problems encountered by modern corporations. The magnitude of the problem correlates with the size of the company: Big companies have bigger headaches than midsize ones. Data issues diminish productivity in every part of a business as people struggle to correct errors or find workarounds. Issues with data are a man-made phenomenon, yet companies seem to treat bad data as some sort of force of nature like a tornado or earthquake – something that’s beyond their control to fix. At best they look for one-off workarounds and Band-Aids without tackling the root causes or recognizing the need to keep data issues in check. Data stewardship can and should be a part of a disciplined approach to management in the same way organizations implement quality control, cash management and legal compliance.
Topics: Big Data, Predictive Analytics, Sales Performance, Supply Chain Performance, GRC, IT Performance, Operational Performance, Business Analytics, Business Intelligence, Business Performance, CIO, Customer & Contact Center, Financial Performance, Information Management, Operational Intelligence, Workforce Performance, CFO, finance, FPM
Midsize Companies Find ERP in the Cloud Increasingly Attractive
Midsize businesses “pay” for their use of entry-level accounting systems by not having the essential information they need readily available and by using up valuable time that could be better spent generating business, finding issues or responding to opportunities sooner or simply enhancing the efficiency of the organization. Nevertheless, the transition from an entry-level accounting package such as QuickBooks to an on-premises system can be daunting for companies whose entry-level software no longer addresses their needs. Usually, the shortcomings start off as minor annoyances for companies that have between 100 and 500 employees and grow over time, and usually the pain grows with the number of employees and the volume and complexity of the underlying business. As business volumes expand and complexity grows, entry-level accounting systems are increasingly less able to support the underlying business. Yet finance executives usually don’t want to migrate to a new system until their old software threatens the orderly management of the business or becomes an overwhelming burden on finance operations. I know this firsthand, since not all that long ago I worked at a company where the CFO thought his biggest IT challenge was finding spare parts for the ancient Burroughs mainframe on which our financial system ran.
Topics: Sales Performance, Customer Experience, ERP, Office of Finance, end-to-end, finance cloud, Business Performance, Cloud Computing, Financial Performance, Business Process Management, CFO, finance, accounting software, business process execution, financial systems, FPM
For several years the U.S. Securities and Exchange Commission (SEC) has mandated that filers apply eXtensible Business Reporting Language (XBRL) tags to their financial statements. XBRL was developed to make it easier for investors to use a company’s financial information. Now XBRL US has kicked off its second annual XBRL Challenge, a contest designed to encourage development of open source analytical tools that can use XBRL-formatted corporate financial data from the SEC’s EDGAR database. Sponsoring the effort are the American Institute of Certified Public Accountants, the CFA Institute (of which I am a member) and the Wharton School of the University of Pennsylvania. XBRL US hopes to raise awareness of the wealth of available XBRL data and provide incentives for application developers to create open source software that enables broader and more frequent use of the standard. The contest will award $20,000 grand prizes to the two teams, and judging will be based on how well each submission improves access to corporate data and provides analytic capabilities in an original, user-friendly way. This competition is a terrific idea because it addresses the least well developed element in the drive to improve the communication of corporate data to investors. Earlier this year I reviewed some of the submissions to the first XBRL Challenge. Although the first round of software offered a good start, much more needs to be done to encourage use of XBRL.
Topics: Office of Finance, Reporting, closing, XBRL, Analytics, Business Analytics, Business Performance, Financial Performance, Information Management, finance, Financial Performance Management, SEC
I’ve written frequently on issues that confront desktop spreadsheet users, such as business modeling and capital investment, as well as the risk and control issues spreadsheets pose and their contribution to paralysis by analysis. I focus mainly on the technology aspects of organizational challenges, and I usually recommend replacing stand-alone desktop spreadsheets with more appropriate tools. Yet there are many instances where spreadsheets work well, and in other cases people continue to use them when they shouldn’t. For these reasons, executives and managers must pay attention to spreadsheet training. Many people who use spreadsheets have overblown estimations of their own competence, often those who use them all the time and have years of experience. With these and other tools, unless people are tested and trained on a recurring basis, one can never be sure how well they perform. The consequences of poorly trained spreadsheet users can be significant, both in terms of their impact on direct productivity and in relating to the capabilities of the spreadsheet files they construct and the potential for errors in poorly crafted ones.
Topics: GRC, Office of Finance, Operational Performance, Business Analytics, Business Intelligence, Business Performance, Financial Performance, Governance, Risk & Compliance (GRC), CFO, finance, Training
One of the most important trends in business over the past 20 years has been the broadening use of information technology to manage and support activities. In the early decades of business computing, companies developed islands of automation for largely numeric functions such as billing, inventory management and accounting. Each ran on a proprietary system and engaged the time of a relative handful of employees. Today, just about everyone works with an IT system for at least some of their operational or administrative tasks. They rely on these systems to support many of their daily routines, from recording transactions to using analytics to provide alerts, insights and decision support.
Topics: Big Data, Performance Management, Predictive Analytics, Customer Experience, Governance, GRC, Management, IT Performance, Operational Performance, Analytics, Business Intelligence, Business Performance, Financial Performance, Governance, Risk & Compliance (GRC), compliance, finance, Risk, financial risk management, IT Risk Management
Risk has always been an integral part of business, but our recent Governance, Risk and Compliance (GRC) benchmark research shows that companies deal with risk with varying degrees of effectiveness – especially operational risk. A majority of companies lag in their overall GRC maturity, as I covered in a recent blog post. Operational risk management should be of greater interest to executives today because they can have greater control of it than before. The expansion of IT systems to automate and support most business processes has made it easier than ever to measure, monitor and report on what’s going on in a company. It’s now practical to expand the scope of operational risk management and improve companies’ effectiveness in handling risk events when they occur.
Topics: Big Data, Performance Management, Predictive Analytics, Sales Performance, Supply Chain Performance, Customer Experience, Governance, GRC, Management, IT Performance, Operational Performance, Analytics, Business Analytics, Business Collaboration, Business Intelligence, Business Performance, Customer & Contact Center, Financial Performance, Governance, Risk & Compliance (GRC), Information Applications, Information Management, Location Intelligence, Operational Intelligence, Workforce Performance, compliance, finance, Risk, financial risk management
Anyone who focuses on the practical uses of information technology, as I do, must consider the data aspects of adopting any new technology to achieve some business purpose. Reliable data must be readily available in the necessary form and format, or that shiny new IT bauble you want to deploy will fall short of expectations. Our research benchmarks cover a range of core business and IT processes, and they regularly demonstrate that data deficiencies are a root cause of issues organizations have in performing core functions; typically the larger the company, the more severe the data issues become.
Topics: Social Media, Supply Chain Performance, GRC, IBM Business Analytics, Business Technology Innovation, Operational Performance, Business Analytics, Business Collaboration, Business Intelligence, Business Performance, CIO, Customer & Contact Center, Financial Performance, Governance, Risk & Compliance (GRC), Information Applications, Information Management, Location Intelligence, Operational Intelligence, Workforce Performance, CFO, finance
Cognos Express Gives Midsize Companies Outsize Capabilities
A main reason why desktop spreadsheets are pervasive in midsize companies (which we define as those with 100 to 1,000 employees) is that these organizations do not have the financial and manpower resources to implement and maintain traditional enterprise business intelligence and performance management systems. To address this gap in the market, several years ago IBM Cognos launched Express, a business intelligence and planning software package designed specifically for midsize companies as well as independent workgroups within larger corporations. It’s a package designed for easy (and relatively inexpensive) implementation and maintenance, often by channel partners.
Topics: ERP, Office of Finance, Reporting, Budgeting, Analytics, Business Intelligence, Dashboards, IBM, Uncategorized, CFO, finance, Financial Performance Management
Infor Presents Itself as a Large Software Startup
Infor described this year’s Inforum user group meeting as a coming-out party for a large startup company. Such a debut was necessary because Infor had been operating in something of a stealth mode for the past three years: a limited marketing presence, no unified message and a weak, sometimes inconsistent brand identity. It also needed to formally introduce Infor to customers of Lawson, the ERP supplier it acquired last year. The “startup” designation is meant to signal that Infor has been able to render a decade-long consolidation of dozens of smaller companies into one cohesive entity.
Topics: Performance Management, Sales Performance, Salesforce.com, SAP, Social Media, Supply Chain Performance, Sustainability, ERP, Human Capital Management, Marketing, Epiphany, expense management, Lawson, IT Performance, Operational Performance, Business Analytics, Business Collaboration, Business Intelligence, Business Mobility, Cloud Computing, Customer & Contact Center, Financial Performance, Governance, Risk & Compliance (GRC), IBM, Information Applications, Information Management, Location Intelligence, Operational Intelligence, Oracle, Workforce Performance, CRM, finance, Infor, Supply Chain, Financial Performance Management
SAP Rolls Out Business Planning and Consolidation on HANA at SAPinsider
For me, the most significant announcement to come out of the recent SAPinsider conference was the company’s formal release of Business Planning and Consolidation (BPC) running on HANA, SAP’s in-memory computing appliance. For me, HANA is a potential “game changer” for planning, statutory consolidation and other analytics-supported financial processes because of the substantial reduction it enables in processing time from loading to reporting. In-memory systems provide a substantial edge in speed of processing large data sets or complex calculations, whereas the latency between thought and answer in complex scenario analyses on disk-based systems often prevents a collaborative dialogue around possible situations and their potential outcomes. Today, companies have to simplify the analysis, severely limit the amount of detail or find some combination of the two. More than likely, they wind up not having a potentially valuable collaborative dialogue in activities such as weekly or monthly review and revision of operating plans and their financial consequences, closing the books or assessing the impact of pricing changes on profitability. In the case of planning, I expect that in-memory systems will enable make it easier for companies to make changes to detailed plans (such as the budget or production plans), which is difficult today for many of them.
Topics: Big Data, Mobile, Planning, Sales Performance, SAP, Social Media, Supply Chain Performance, Customer Experience, ERP, GRC, Office of Finance, Budgeting, IFRS, XBRL, Operational Performance, Analytics, Business Analytics, Business Collaboration, Business Mobility, Business Performance, Cloud Computing, Financial Performance, In-memory, Workforce Performance, finance, Financial Performance Management, GAAP, HANA
It’s Getting Easier To Go Beyond Spreadsheets for Modeling
One trend in business software that’s still in its early stages but gathering momentum is the availability of modeling tools that fill the gap between desktop spreadsheets and enterprise systems. Granted this “early stage” has been under way for quite some time, but the technology has finally progressed to the point where I expect it to get increasing market traction.
Topics: Big Data, Database, Planning, Sales Performance, Forecast, Office of Finance, Essbase, Quantrix, Operational Performance, Analytics, Business Analytics, Business Collaboration, Business Intelligence, Business Performance, Financial Performance, In-memory, Workforce Performance, finance, analysis, analytical application, business model, business plan, financial model
Infor’s Management Outlines Corporate and Software Strategy
I recently met with Infor’s management team, led by CEO Charles Phillips. Phillips joined Infor in October 2010 after leaving Oracle, taking several other executives with him, including Duncan Angove, now president of Infor, and Pam Murphy, now the COO. In addition to the changes in the executive suite, Soma Somasundaram, who had been at Infor and its predecessor companies since 1995, became EVP in charge of R&D. A private company, Infor had been keeping a low profile for the past several years, probably because results were nothing to brag about, and I suspect Phillips wanted to wait until there were substantive improvements to point to before fully engaging with analysts. Subsequent to his arrival, Golden Gate Capital, the private equity firm that assembled Infor from dozens of once-independent software companies, acquired ERP vendor Lawson Software in July 2011. Lawson itself had merged with Intentia, a Swedish ERP company in 2005. I estimate pro-forma 2011 revenues for Infor plus Lawson for a full year at $2.7 billion (the company has not published this number). This is only a fraction of 2011 revenues for SAP (about $14.5 billion) and Oracle’s applications ($6.8 billion). Infor reported that organic growth in license revenues was 17 percent, roughly in line with comparable companies, and executives indicated in the meeting that maintenance renewals have improved.
Topics: Sales Performance, Salesforce.com, Social Media, Supply Chain Performance, ERP, Human Capital Management, Marketing, Epiphany, expense management, Lawson Software, Operational Performance, Business Analytics, Business Collaboration, Business Mobility, Business Performance, Cloud Computing, Financial Performance, Workforce Performance, finance, Infor, Financial Performance Management
SAP Must Translate Technology Advances into Business Use
At its annual Influencer’s Summit in Boston, SAP offered multiple perspectives on where the company’s strategy and products are heading. Overall, I was struck by the essential similarities to its message on its strategic direction a decade ago. The overarching objective in its roadmap now, as then, is to have information technology increasingly adapt to the needs of individual users and how they choose to execute established/repetitive or ad-hoc processes, rather than forcing them to adapt to the limitations of the technologies they are using. Back then the idea was to create a comprehensive process framework – a closely coupled approach. Today, it’s essentially the opposite, as SAP products run on an architecture that enables flexibility – a loosely coupled approach – both in how the computing infrastructure is organized and how people execute their tasks. It seems to me that this reflects the impact of having choices between cloud-based software as a service (SaaS) and on-premises systems and the need to enable access through a variety of devices (from desktops to mobile handhelds and tablets). Mobility is important both for people whose roles take them beyond the firewall (in sales, service and logistics, for example) and executives and managers who often find themselves managing by walking around. Tablets, smartphones and similar devices are attractive also because people consider them personal items and associate them with fun, whereas desktops and notebooks are corporate and work-related.
Topics: Performance Management, Planning, Predictive Analytics, Sales Performance, SAP, Supply Chain Performance, ERP, GRC, Office of Finance, Operational Performance, Business Analytics, Business Collaboration, Business Mobility, Business Performance, Cloud Computing, Enterprise Software, Financial Performance, In-memory, Mobility, Workforce Performance, finance, Risk, Financial Performance Management
This year’s Dreamforce is likely include a focus on the value of moving a company’s accounting systems and related record management processes (for instance, invoicing and ordering) to the cloud. Salesforce.com’s annual conference is never short on hyperbole and promotion of everything cloud, which can be off-putting to staid finance department types (like me). And while some departments (notably Sales) have been quick to seize on the advantages of using the cloud, others (notably Finance) have not.
Topics: Office of Finance, finance cloud, Business Performance, Cloud Computing, Financial Performance, finance, accounting software, financial systems
I think one of best epigrams attributed to Mark Twain is, “Everyone talks about the weather but nobody ever does something about it.” This also has relevance to the situation with corporate planning and budgeting. Bemoaning its lack of value and calling for some sort of change goes back a long way, but few companies have matured their process. In the 1970s something called “zero-based budgeting” was all the rage in business and accounting periodicals. It was energetically advocated by President Carter to counteract the incremental budgeting that made it so difficult for the U.S. Congress to cut spending. (Of course, nothing changed.) Efforts to reform budgeting gathered steam in the 1990s as software vendors began offering dedicated applications designed for planning and budgeting. Even if one doesn’t fully embrace the idea of going budgetless, the book Beyond Budgeting is full of sensible management approaches (such as using league tables for internal benchmarking or using relative rather than fixed measures of performance). Of course, unlike the weather, people can change company practices. Yet when it comes to budgeting and planning, the same old stuff persists even as people like me continue to point out how using the right software can help transform the process into a valuable business tool. I’ve discussed why it’s important to adopt integrated business planning from my research, in which the budget is an automatically generated end product of the process, not the objective itself. And I’ve explained why driver-based planning produces better results. If it were just me advocating change, I might take its absence personally, but there have been scores of people, libraries of books and years of webinars focused on this topic for decades. Why has so little changed?
Topics: Planning, Predictive Analytics, Sales, Sales Performance, Supply Chain Performance, Office of Finance, Budgeting, contingency planning, Operational Performance, Business Analytics, Business Collaboration, Business Performance, Financial Performance, CFO, finance, Financial Performance Management, Integrated Business Planning
Total Compensation Management Research: Voice Your Needs and Opinions
Are you a human resources executive who’s still using spreadsheets and various database systems to track and manage compensation and incentives of your workforce? If you aren’t, then believe it or not, you’re in the minority.
Topics: Sales Performance, Human Capital Management, Office of Finance, Operational Performance, Business Analytics, Business Collaboration, Business Performance, Cloud Computing, Financial Performance, Workforce Performance, Compensation, finance, Talent Management, Workforce Performance Management
Putting the “A” Back in FP&A (Financial Planning & Analysis)
People who perform the financial planning and analysis (FP&A) function in the finance organization put together and update the budgets and forecasts. In many companies, the “A” portion of this activity gets short shrift. That’s because the mechanical process of pulling together and collating the data takes up so much time that very little remains for analysis. The result is that planning and budgeting is a less useful business tool than it could be. Improving FP&A can give executives and managers more insightful analytics and easier access to analytical tools that support more accurate and timely planning and budgeting.
Topics: FP&A, Finance Analytics, Financial Applications, Business Performance, Financial Performance, CFO, finance, Integrated Business Planning
SAP is in the process of acquiring certain financial disclosure management software assets from cundus, a German provider of BI and performance management software. SAP will be buying cundus’ Financial Statement Factory and informationCollector, which together manage the collaborative creation and editing of financial and management reports using both structured and unstructured information. SAP expects to complete the deal by the end of 2010.
Topics: ERP, Financial Applications, Uncategorized, CFO, finance, Financial Performance Management
One of the prominent salesforce.com partners on display at the recent Dreamforce in San Francisco was FinancialForce.com. It’s one of a growing list of providers of in-the-cloud accounting and finance packages built on the Force.com platform. Like other of these accounting vendors (such as Compiere, Intacct, Netsuite and - to some extent and eventually– Workday), it aims principally at companies that have outgrown entry-level accounting software such as Intuit’s QuickBooks. (I covered the emerging use of cloud-based applications for finance departments here.) However, there are key differences. One major difference is that FinancialForce offers customers the choice between buying accounting functionality as a complete package or doing so à la carte. This approach derives from its strategy of going after two types of customers.
Topics: ERP, Financial Applications, Business Performance, Cloud Computing, Financial Performance, CFO, finance
Years ago I was given a tour of a company’s factory by the CEO who was credited with engineering its recent turnaround. We were walking along a gallery one story above the shop floor when he pointed down to it and told me that when he first looked down on this scene he saw people dashing madly back and forth. Rather than taking that as a good sign of a busy factory, he said it was a clear indication to him of how inefficient the operation was and why the company was losing money. He immediately went about realigning the factory’s layout to smooth out physical flows and re-examined its manufacturing processes, and soon the business was profitable.
Topics: Sustainability, Environment Management, Uncategorized, CFO, finance, Green
SAP Hits Suite Spot for Financial Performance Management
Ventana Research recently completed its 2010 Financial Performance Management Value Index of the major financial performance management suites. Financial performance management (FPM) is the process of addressing the often overlapping issues around people, process, information and information technology that affect how well finance organizations operate and support the activities of the rest of the organization. FPM deals with the full cycle of finance department activities including planning, forecasting, analysis, closing and reporting. As I noted in my earlier blog about this year’s FPM Value Index, one striking feature of this software category is its general maturity. Budgeting and planning, reporting, closing and statutory consolidation, as well as dashboards and scorecards, have been around for more than a decade, so the suites we examined are all feature-rich and with one notable exception have remarkably similar capabilities at this time. (The exception is automated preparation of XBRL-tagged financial documents for the United States Securities and Exchange Commission – the SEC). Consequently the Value Index scores were tightly clustered. SAP’s suite just edged out those of IBM and Infor in the rankings, though both of those earned the Hot Vendor rating.
Topics: SAP, ERP, Financial Applications, Financial Performance, CFO, finance, Financial Performance Management
What is the Value of Your Financial Performance Management Software?
Ventana Research has just announced its Value Index for Financial Performance Management (FPM) for 2010. Our value indexes are user-focused assessments of how well software vendors and packages enable companies to improve their execution of core processes. This one is designed to help businesses, especially the finance organization, evaluate the FPM software suites offered by major vendors in the context of their specific needs. Ventana Research defines financial performance management as the practice of managing the efficiency and effectiveness of financial processes including analytics, budgeting, consolidation, planning, reporting and strategy. The methodology we use to produce the Value Indexes involves evaluating in detail aspects of product functionality and suitability-to-task as well as the effectiveness of vendor support for the buying process and customer assurance.
Topics: ERP, Office of Finance, Financial Applications, Business Performance, Business Technology, Financial Performance, Business Planning, CFO, finance, Corporate Finance, Financial Performance Management
Australia Adopts XBRL for "Standard Business Reporting"
In July, Australia adopted what it calls "Standard Business Reporting" (SBR), which is designed to reduce the reporting burden imposed on businesses by the country's federal and state governments by streamlining the information submission ("lodging" for the Oz) process. In essence, the country is on its way to a file-once-use-many approach whereby companies provide data using a single secure sign-on known as "AUSkey" As of now, SBR reports include the Business Activity Statement, Tax File Number Declarations, payment summaries, payroll tax returns and financial statements. While the data can be compiled manually, the objective is to have SBR-enabled software to pre-fill and complete government forms directly from their own accounting and other business systems. The Australian initiative has been in the works for several years and appears to be off to a good start.
Topics: XBRL, Business Performance, Financial Performance, finance, SEC
