I recently attended SAP TechEd in Las Vegas to hear the latest from the company regarding its analytics and business intelligence offerings as well as its data management platform. The company used the event to launch SAP Data Hub and made several other data and analytics announcements that I’ll cover below.
There were two noteworthy themes in SAP CEO Bill McDermott’s keynote at this year’s Sapphire conference. One was customer assurance; that is, placing greater emphasis on making the implementation of even complex business software more predictable and less of an effort. This theme reflects the maturing of the enterprise applications business as it transitions from producing highly customized software to providing configurable, off-the-rack purchases. Implementing ERP will never be simple, as I have noted, but as companies increasingly adopt multitenant software as a service (SaaS), vendors will need to make their implementations as repeatable as possible and enable flexible configuration of parameters and processes that substantially reduce the billable hours required to complete a deployment. “Customer assurance” is an important stake in the ground, but it will be an empty concept unless there is complete overhaul of the entire value chain to take it beyond good intentions. Otherwise, customer assurance will be an ongoing rearguard action to overcome technology-driven challenges and disincentives for improvement. Business applications must be re-engineered to facilitate implementation, substantially reduce the likelihood of implementation errors and facilitate subsequent changes to adapt to changing business conditions. Moreover, software vendors’ partners will need to demonstrate that they can reliably cut a substantial number of billable hours per implementation engagement. This will require partners to restructure their business models. Neither of these changes will be easy to accomplish. To its credit SAP has set a course for increasing the simplicity of using its core ERP and financial management software. Getting there soon would greatly enhance its ability to retain if not gain customers in these mature markets.
Workday Financial Management (which belongs in the broader ERP software category) appears to be gaining traction in the market, having matured sufficiently to be attractive to a large audience of buyers. It was built from the ground up as a cloud application. While that gives it the advantage of a fresh approach to structuring its data and process models for the cloud, the product has had to catch up to its rivals in functionality. The company’s ERP offering has matured considerably over the past three years and now is better positioned to grow its installed base. Workday recently added Aon, the insurance and professional services company, to its customer list (becoming its largest customer to date) and reported that its annual contract value (ACV - the annualized aggregate revenue value of all subscription contracts as of the end of a quarter) has doubled since the second quarter of this year, albeit from a low base. This is an important milestone because for years the company’s growth has come from the human capital management (HCM) portion of the business, not financials. Workday has around 160 customers for its financials (more than 90 of which are live) compared to more than 1,000 customers for HCM.
Topics: Analytics, Business Intelligence, Business Performance, CFO, close, Cloud Computing, Collaboration, Controller, dashboard, Data, ERP, Financial Performance, Financial Performance Management, FP&A, FPM, Human Capital, IBM, Intacct, Microsoft, NetSuite, Operational Performance, Oracle, Reporting, SAP, Spreadsheets, Tax, Uncategorized, Office of Finance
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: Analytics, Business Collaboration, Business Intelligence, Business Performance, CFO, close, closing, Cloud Computing, Collaboration, Controller, dashboard, Data, ERP, finance, Financial Performance, Financial Performance Management, FP&A, FPM, Human Capital, IBM, Intacct, Microsoft, Mobile Technology, NetSuite, Operational Performance, Oracle, Reconciliation, Reporting, SAP, Social Media, Supply Chain Performance, Uncategorized, Big Data, Office of Finance
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: Analytics, Business Collaboration, Business Intelligence, Business Performance Management (BPM), CFO, close, closing, Cloud Computing, Collaboration, Controller, Customer Performance, dashboard, Data, ERP, finance, Financial Performance Management, Financial Performance Management (FPM), FPM, Human Capital, IBM, Intacct, Microsoft, Mobile Technology, NetSuite, Operational Performance, Oracle, Predictive Analytics, Reporting, Sales Performance, SAP, Supply Chain Performance, Tax, Office of Finance