Vendors race to balance scores

ERP vendors Oracle and PeopleSoft have joined the race to deliver balanced scorecard applications.

At its user conference in Hawaii two weeks ago, Oracle announced that it had acquired Graphical Information for an undisclosed sum. Graphical’s founder, Santiago Becerra, and its product development and consulting teams all joined Oracle, and Graphical’s product, Oracle Balanced Scorecard, was immediately made available to Oracle users.

The following week, KPMG and PeopleSoft announced they were collaborating on an ‘enterprise performance management’ application. The alliance is PeopleSoft’s first step towards its stated objective of delivering a balanced scorecard application by the end of 1999. Both Oracle and PeopleSoft are trying to catch up with SAP, which announced in June that it was working on a scorecard with PricewaterhouseCoopers.

The scorecard is a collection of indicators – many of them non-financial – that give a rapid view of a company’s all-round health. The methodology was first described by management academics Robert Kaplan and David Norton in a 1991 Harvard Business Review article. ‘Like the dials in an airplane cockpit, it gives managers complex information at a glance,’ they explained.

As the funder of Kaplan and Norton’s research, KPMG has had a continuing relationship with Kaplan from the start. KPMG acquired Norton’s company, Nolan Norton, but he subsequently left to found Renaissance, a specialist scorecard consultancy.

KPMG is working with PeopleSoft on an activity-based management module, but has been frozen out of the second phase to develop a full scorecard.

The reason, according to Gentia marketing vice-president Michael Gaiss, is because Renaissance has an exclusive joint development arrangement with Gentia to produce software ‘that follows the book’.

As a software supplier, Gentia relies heavily for sales on business consultants such as Renaissance, Grant Thornton, Arthur Andersen and PricewaterhouseCoopers.

Gentia promotes the ‘pure’ vision through a Web-based Balanced Scorecard Technology Council, said Gaiss. ‘But the more talk there is about scorecards, the more clients will do it.’

Conflicts over definitions and capabilities are inevitable, said KPMG consultant Ralph Cantor. ‘EVA (Enterprise Valuation Analysis), ABM, balanced scorecards – they’re all the same thing to clients. They want to manage performance. We’re interested in putting all these disciplines together.’

ERP vendors like SAP, Oracle and PeopleSoft are moving into the field, said Cantor, ‘because they own all the data’.

Oracle applications marketing director Neil Brooks, said: ‘ERP used to be focused on transaction processing and wasn’t associated with non-financial measures such as customer retention. Now that we’re delivering front office sales automation, supply chain and integrated human resources software, we can dip into them to deliver source information for scorecards.’