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FinancialForce’s 2014 summer release incorporates improvements in mobile and collaboration features and provides enhancements to the planning dimension of its professional services automation (PSA) suite. In the last couple of releases the company emphasized expansion in the functional capabilities of its ERP suite, as I noted, focusing on human capital management and professional services automation as well as some supply chain automation capabilities.

vr_Office_of_Finance_16_next-generation_technologiesThe latest release uses the Salesforce1 platform to extend its mobile capabilities. These are increasingly important to executives and managers for reviewing information and drilling down into data such as orders, invoices and payments  to deepen understanding of the information. Mobile access also is useful for approving tasks or requests (such as expense report approvals or process review signoffs) regardless of where the users happen to be. Mobility is especially useful for anyone who is not always sitting at a desk or for connecting customers to the company in a secure and controlled fashion as they place orders or check on the status of their accounts. It is a capability that supports today’s “any time anywhere” management practices. However, FinancialForce has its work cut out in convincing finance departments that they need mobility. In our new Office of Finance benchmark research only one-third of participants said that mobile technology will significantly influence their future performance. (Only half have that opinion about cloud computing generally.)

Even fewer finance professionals are interested in technologies that promote and simplify collaboration, which is odd since most finance and accounting processes require collaboration. For that reason, I have argued that applications that support finance departments need a social media capability. Salesforce.com has been enhancing Chatter, its social business application, and FinancialForce has been adapting it to the needs of its target customers. Initially, social applications emphasized their broadcast capabilities, which is suitable for corporate-wide information, but collaboration requires narrow casting – making connections and information available to suit individual needs. This capability prevents people from being deluged with information (which substantially dilutes the collaborative value of a social application) and ensures that sensitive information is shared only with those approved to see it. FinancialForce also is making the actions more context-sensitive, able to understand which role or activity an individual is currently engaged in and which group or colleagues are relevant at that moment.

One important objective in managing a modern professional services organization is to minimize administrative overhead, for example for billing professionals (such as time and expense tracking). Professional services automation software is designed to do that as well as make it easier to manage the process of selling and fulfilling professional services from end to end. PSA also facilitates billing and accounting, ensuring accuracy and speeding up the receipt of funds. The enhancements announced in FinancialForce’s recent release aim to improve professional services group’s ability to manage staffing.

PSA suites that include resource and capacity planning also make it possible for professional services managers to monitor the availability of people to deliver contracted services. Resource utilization is especially important in determining the effectiveness and profitability of a professional services group. Lean staffing can generate fatter margins, but it can disappoint customers if resources are not available; an inability to optimize professionals’ time can quickly generate losses. Training is usually essential for new hires, so they’re not immediately profitable and companies are slow to let go of trained individuals when demand is slack. So it’s important for executives to have visibility into potential demand for services. Since FinancialForce’s PSA software runs on the Salesforce1 platform, professional services managers can look beyond already contracted services. They must be able to monitor potential resource demand (or lack of it) by extrapolating sales funnel data into forward-looking capacity calculations. As deals enter the pipeline, it’s possible for a manager to determine whether enough people with the requisite skills are available to fulfill the services demand. Where there is more demand than supply, these organizations can achieve a balance by adding people or determining how best to spread workloads. An important advantage in making these calculations based on the pipeline of business is that it provides necessary lead times to identify and hire the talent needed to meet demand. Not having such forward visibility can produce delays in starting projects because of a lack of resources (creating client satisfaction issues and limiting revenues) or guesswork about hiring needs (potentially diminishing profitability by underutilizing services personnel).

FinancialForce is a cloud-based application, so it’s particularly well suited to the needs of companies that have outgrown their small business accounting software packages and can benefit from having the ability to connect sales, marketing and customer service capabilities with their back-office functions. It can help midsize businesses – especially those selling business services – grow while minimizing the need to add administrative staff. Many companies with 50 to 500 employees still use basic accounting packages even though they have outgrown their process management, reporting and analytical capabilities because they hesitate to make the investment in an on-premises accounting package and the resources necessary to support it. Maintaining an existing accounting package might appear the safe choice, but it foregoes the operational and management benefits that more capable software can deliver. Cloud-based software usually entails a smaller upfront commitment and does not require ongoing reliance on staff to support a system. FinancialForce also is well suited for larger companies that have a professional services group with 30 or more employees who bill their time and expenses, especially those who engage in discrete projects. Salesforce.com users of all sizes can find FinancialForce components useful in automatically connecting their Salesforce.com processes with other enterprise systems in a managed and controlled fashion, without having to re-enter data. I recommend that they consider how this vendor’s products can help meet their needs.

Regards,

Robert Kugel – SVP Research

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.

VR Logo Bug Square BufferYet few business users are tapping the full potential of today’s systems. Most organizations have been slow to integrate IT innovation into their core processes. Companies have made considerable investments in information technology, but their business methods have been slow to adapt to the resources available. For instance, software for incentive compensation software and for planning and budgeting has made it possible to improve these processes, but most companies manage compensation, budget and plan in much the same way they did decades ago. To be sure, it’s much easier for individuals to adopt new tools for themselves than it is to align groups and executives in corporations to change proven approaches – even mediocre ones. But it’s also the case that business software must make it easier for individuals to realize more of the potential of information technology. And this part of the evolution of business software is only beginning. This is the context in which I took note of two emerging capabilities of IBM’s business software. One is its Concert user experience software and the other its emerging application (not yet officially named) designed to make advanced analytics more consumable. These are two important capabilities IBM highlighted at its recent Insight user group meeting and Big Data and Analytics analyst summit.

Integrating processes and data across a business has long been a challenge for IT departments. Some decades ago the issue of “islands of automation” emerged as companies implemented stand-alone business applications one by one to perform some function but then realized that it would be handy if these could share data and manage processes from start to finish. Initial progress toward this goal was made in the form of applications such as ERP that offer integrated functionality and enterprise data stores, although these often were difficult to implement and complex to maintain. Lately, software vendors have been refocusing to provide users with ways of facilitating end-to-end process management and making data more accessible.

IBM Concert is such an attempt. Announced in November 2013, it is a user interface IBM designed to be the central touch point across multiple applications and data stores. (It’s possible to link Concert to other vendors’ software, but it’s unlikely that a company would buy it on its own to link other applications.) It’s meant to replace menu-driven interactions between the user and the system with “I want to do this process” and a “day in the life” approach to organizing how individuals access applications and data. IBM Concert is an example of how we are only now beginning to achieve the longstanding objective of having IT systems conform to the user’s needs rather than the opposite. On a single screen Concert organizes personal task lists and presents metrics, conditions and dashboard elements configured to an individual’s preferences so the user can easily monitor conditions and enable more management by exception. Users can organize the data they need to support a given process right in front of them rather than having to go to some other application to fetch that data.

IBM Concert also has a social component that provides the ability for users to collaborate in context. Social applications generally have improved organizations’ connectedness. They offer greater immediacy than “copy all” email, greater inclusiveness than chat software and better communication in a mobile and geographically dispersed workforce. Initially, social applications took a broadcast approach similar to an unfiltered Twitter feed but as I pointed out at the time, that wasn’t a useful approach. As anyone who has used Twitter during an event can attest, the volume of messages quickly exceeds one’s ability to pick out the important ones. Moreover, not everyone wants to share information broadly, especially, for example, finance departments. Concert by contrast “understands” the area in which the individual is working and connects him or her to the conversations of others who are part of the group that needs to collaborate on that specific task. Users also apply hashtags to add a specific context to the message.

I think that Concert has the potential to become the nexus of business people’s computing environments and a sidekick that helps them stay organized and informed, get alerts, collaborate, find answers and explore their workday world.

Both at Vision and again at the Big Data and Analytics analyst summit, IBM previewed Project Catalyst Insight which is a not-yet-named application that is a significant advancement from its SPSS Analytic Catalyst software. Making big data and analytics more useful and consumable by the white-collar workforce (and even some of the blue collars) would be provide a major boost to organizational performance. By itself, a mass of data is not especially useful, and there are significant challenges to teasing out insights from large data sets, especially when that requires sophisticated analytical techniques. Another as-yet-unnamed application from IBM is designed to make big data and analytics more consumable and more useful. Typically large volumes of data are now accessible mainly to those with Ph.D.s in statistics or otherwise highly trained. The main objective of this project is to package advanced analytics routines for use, after limited training, by ordinary business analysts working in any department in any industry.

Big data has always been with us; it is just a question how much “big” is. Today the term refers to data sets so large and complex that organizations have difficulty processing them using standard database management systems and applications. Technology for handling big data has crossed a threshold, becoming more capable and cost-effective. Companies can now to tap into much larger amounts of structured and unstructured data. Big data has potential – and potential pitfalls – for improving a company’s performance, as I have noted. Big data is of little use unless organizations have the ability to use analytics to achieve insights not available through more conventional techniques. The ability to sift through large quantities of business-related data rapidly could set in motion fundamental changes in how executives and managers run their business. Properly deployed, big data can support a more forward-looking and agile management style even in very large enterprises. It will allow more flexible forms of business organization. It can give finance organizations greater scope to play a more strategic role in corporate management by changing the focus of business reviews from backward-looking assessments of what just happened to emphasis on what to do next.

vr_NG_Finance_Analytics_14_innovative_companies_adapt_betterThe challenge for many companies is that big data and advanced analytics are not readily consumable. Our research on finance analytics finds that fewer than one-third (29%) of companies use big data to support their finance analytics, even though this technology can handle the flood of data into today’s businesses and can help produce more useful analytics and advanced techniques. Although analytics is essential to finance departments, their focus remains on the basics. Fewer than half (44% each) use the proven newer techniques of predictive analytics and leading indicators. Nearly three out of four (73%) do not assess relevant economic or market data and trends, and fewer than half assess customer and product profitability; any of these could make analyses more relevant to the overall success of the company. The ability of finance organizations to master analytical techniques – especially advanced ones – ought to be a priority for senior executives because our research shows a correlation between competence in utilizing big data and analytics and the ability to adapt quickly to changing business and economic conditions.

IBM SPSS Analytic Catalyst Insight is designed to make it easier for business users who are not trained statisticians to create predictive analytical models just by answering a few preliminary questions about what they want to accomplish using the data. The new incarnation with IBM Project Catalyst Insight aims to simplify the process even further to bring it into the reach of a wider set of business users. It does so by packaging a range of standard routines that would be applied to data sets and providing even more guidance to analysts and even some business managers that know what they want to know but have a limited grasp of the analytical techniques necessary to find meaning in a mass of data. If IBM can create an application that enables more business users to utilize predictive analytics and other advanced analytical techniques, it would represent a big step forward in making big data a useful tool for many more functional areas than it is today.

Both IBM Concert and the new business analytics tool called Project Catalyst Insight “to be officially named later” reflect IBM’s strategy of achieving product differentiation in a rapidly evolving software market. The first decades of packaged business applications were characterized by a race to create new categories and load them with distinguishing features and functions. In the next decade competitive advantage will fall to software vendors that – in addition to features and functions – can provide business people with a user experience that is easily molded to how they naturally work. IBM Concert is a useful first step that is likely to be further refined. The new analytical environment derived from IBM SPSS Modeler and SPSS Analytic Catalyst Insight looks and sounds like a good idea, and it will be interesting to see how it develops when it is generally available.

Regards,

Robert Kugel – SVP Research

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