Intelligent technology: the next big thing

This is about a tricky unification. What business performance management does is bring together two groups of software ­ traditional business intelligence software and standard financial management software.

The BPM software market is burgeoning ­ analyst Gartner predicts 50% market growth by 2011.

And the reason is that recent developments in the BPM world give a clear signal that something quite exciting is happening: the delivery of a truly integrated management information package ­ one that clearly links strategic objectives and, crucially, also reports them to operational roles, without the hassle of re-formatting, re-keying and translating data.

The reason for this long-awaited breakthrough can be summed up in a single word: consolidation.

Last year enterprise software giants SAP, Oracle and IBM together acquired five of the biggest BPM players: Business Objects, Hyperion, Cognos, Cartesis and Outlooksoft. This consolidation clearly has profound implications for the development of BPM technology but also leaves companies with the tricky task of deciding if, how, and when to invest. It’s a task further complicated by the fact that consolidation has led to multiple overlaps in the vendors’ application suites. These overlaps will oblige vendors to clarify and rationalise their product portfolios, as well as develop integration tools.

Integration can only be welcomed. Historically, companies have chosen different software applications for different financial and reporting problems. This created different user interfaces, security configurations and, most importantly, data structures. In turn, this led to increasingly complex reporting and analytical environments, increasing costs and effort with lower data quality.

Without using Excel, how many companies can claim their budgeting data is used seamlessly for financial consolidation and management reporting, flowing directly from their ERP system?

All of this leaves finance executives seeking answers to a number of challenging questions:

• What if we have applications from more than one vendor?
• Is it important to standardise on a single vendor BPM solution?
• How many different technologies and skills should we support?

Knowing what value you get from your existing financial management information systems is a fundamental starting point to finding the answers. The table outlines some of the key benefits an integrated IT offers to finance and other business functions. However, finance professionals should treat vendor claims of ‘single vendor: integrated solutions’ cautiously. To be truly beneficial, vendors must demonstrate not only their individual solutions strength, but also their added value. They must show their data integration solutions genuinely reduce costs, and also the skills and effort historically required to integrate and maintain multiple solutions on multiple platforms. Until they can do so convincingly, there is still likely to be room for ‘best in breed’ solutions.

The decision to standardise with a single vendor is complex and will be influenced by your specific information needs, skill base (both to support and use the software) and organisation complexity.

In the current environment, key factors to consider are:

• How consistent (and transparent) is the information I use for financial and management reporting?
• How much time and cost is required to maintain separate systems?
• Will integration give me better insight into business performance?
• Will the software deliver the promised improvements?
• Is the problem really my management information and software, or are my processes, governance and capabilities right?

The answer to any of these could signal the need to change. The next question is ‘when?’ For large, complex organisations, transitioning now to a standard vendor suite/platform might be of particular benefit, providing a basis to share common information, enabling consistency and transparency across lines of business and geographies.

The key benefit here is the ability to leverage the integration capabilities and standardise ‘master data’; significantly improving quality and consistency of information used across the business.

Smaller and medium-sized organisations typically have fewer data sources to integrate and less divergence in their data. As such, they probably have the luxury of waiting to see how successful vendors are in consolidating their newly acquired BPM applications.

BPM is evidently about much more than data and systems. The best software in the world won’t improve decision-making and performance on their own. A successful implementation must tie in to the organisation’s structure, and link to effective management processes that fully utilise employees’ capabilities. Used in this way, BPM offers organisations real potential to harness and exploit management information for better performance.

There’s probably never been a better time than now for something that can do that.

Robert Gill is an engagement manager with management consultancy Ineum Consulting

Intelligence gathering

Arcplan
Independent BI vendor that is strong in corporate environments that have lots of heterogeneous technologies. Its CFO cockpit product - an analytic and dashboard suite designed for finance users - is well regarded.

Actuate
Open-source (the building blocks of the software are available for scrutiny and development by anyone) software which is powerful and scalable. Well thought of in financial services and the public sector.

Board International
European business intelligence company, which is particularly strong in the food and pharmaceutical sectors.

Business Objects
Before being bought by SAP, Business Objects was the largest business intelligence software company in the world. It has a full suite of BI tools and is particularly strong in the 'on-demand' sector.

Cognos
Acquired by IBM, it has long been a leader in the BI world and enjoys a particularly strong enterprise level deployment. Despite this, Gartner views its predictive analytics as weak.

Information Builders
Extremely scalable software (10,000+ user implementations) which is also sold through IBM as DB2 Web Query.

Microsoft
While PerformancePoint Server 2007 benefits from tight integration with office products and SQL Server, its integration within heterogeneous environments is not as well developed.

Microstrategy
Seen as a potential acquisition target of Microsoft, Microstrategy is a well-regarded BI company which is particularly strong in the governance sector.

Oracle
Oracle can boast its own well-regarded BI platform as well as that of Hyperion, which it bought last year. Software can be deployed in non-Oracle environments.

SAP
Combined with Business Objects, SAP is the largest BI vendor, more than twice the size of its nearest competitor. However, implementation difficulties exist, according to Gartner's research.

SAS
Particularly strong in advanced analytic and predictive software, with offerings such as fraud detection and prevention - recently announced a collaboration deal with Teradata.

David Rae is editor of Procurement Leaders