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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.
Cloud-based deployment of applications has the potential to address this intelligence deficit, but only if users demand it. In some respects, the dearth of external information today is a legacy of limits imposed long-ago by computing infrastructure. Obtaining information about the world outside the four walls of an organization used to be difficult, time-consuming and not always trustworthy. Some people may have had subscriptions to magazines or industry newsletters. Yet unless these publications were nearby and you knew it, accessing their information was difficult. Today, however, almost all such information is available on the Web, often for free. If, say, you need to track production of closed die forging, press and upset forging by country in Europe, you simply look here. The Web has made it easier to receive and use information. Not too long ago, updating third-party data stores involved getting delivery of physical media (such as optical or magnetic storage discs). However, the bad old days linger on in attitudes. Most business people are not in the habit of thinking about integrating external data into enterprise systems, which I assert is one reason why only about one-third of companies have satisfactory access.
Human nature is another reason why external information is not as available as internal. Organizations tend to look inward. Too often, performance is assessed only on an us-vs.-us basis, as in comparing actual results to a budget or to the same period a year ago. But business is a competitive game, not solitaire. In the past, it might have been difficult to use external benchmarks to measure an organization’s own performance, but in today’s environment it’s not. And there’s no good excuse for persisting in bad habits that prevent companies from using more information about the outside world. Organizational habits can be altered, but doing so usually requires a change of tone at the top. CEOs and senior executives stand to gain the most from better situational awareness, but I worry that few of them understand that a lack of readily available external information is undermining their company’s ability to compete.
Speaking of bad habits, the integration of new technology into business operations has long been unsteady and inconsistent. It took about half a century after the invention of the fractional horsepower electric motor for the redesign of factories to take advantage of the greater flexibility of that technology over steam engines. By comparison, adoption of the Internet by business has been stunningly swift in some respects but not others. When it comes to the cloud, the extent of adoption differs considerably. Businesses that thrive on novelty – and the parts of the business that are most engaged in novelty (such as marketing, sales and product design) – have been the earliest to incorporate cloud technology into their processes and systems. Industrial companies and departments such as finance and operations have been slower to bring new information sources into their management processes. All companies can benefit from increasing their understanding of what’s going on outside their four walls. The cloud is there to help – but only if companies and their executives want that help.
Robert Kugel – SVP Research
IBM this week announced its pending acquisition of the Star Analytics product portfolio. Star Analytics is a privately held company that offers products designed to provide easy access to and integration with Oracle Hyperion data sources. While Star Analytics has a good product and solid references, it has lacked critical mass to support more effective sales and marketing efforts. Star Analytics’ strategic value to IBM lies in its ability to unlock data held in Oracle Essbase multidimensional databases, which is the repository for applications such as Hyperion Enterprise, Financial Management and Planning. It supports IBM’s aim to offer comprehensive business analytics capabilities, which means it must be able to facilitate access to all data sources. Longer term, it enables IBM to compete with Oracle for finance department customers with IBM’s own financial performance management applications. Star Analytics gives IBM a means of fostering relationships with existing users of Hyperion applications and a more graceful migration path to using IBM’s financial, analytics and business intelligence software.
Finance organizations have been heavy users of Hyperion financial applications. While these applications are workhorses for important finance tasks, the information in their data stores has been difficult to access from outside of Hyperion environments. Larger companies often must try to knit together their complex applications and databases with hard-to-maintain custom integrations, or use spreadsheets to combine data from multiple sources. Since companies maintain a great deal of useful information, they wind up spending a considerable amount of time and effort working around accessibility issues. Star Analytics’ software helps companies make data much easier to integrate into financial information processes, enabling consolidated reporting and analytics that can accelerate the time it takes to assess overall financial results.
Larger companies that have significant, longstanding investments in Hyperion software often store a great deal of information in multidimensional databases (“cubes”) that serve as the foundation for their consolidation, reporting and planning software. These databases are extremely useful for analysis and reporting and are a considerable improvement over desktop spreadsheets for collaborative and repetitive tasks. Yet their utility is confined mainly to the needs of the finance department’s specific application because, in practice, it’s very difficult to extract the information contained in these databases into data warehouses accessible to the rest of the organization by using standard business intelligence (BI) tools. This is a serious ongoing problem. Today, to produce the kind of advanced analyses and reporting that generate deeper insight and more useful, effective business models, it is necessary to integrate financial and operational information. The operational data comes not only from a company’s ERP system but also supply chain and logistics systems, customer relationship management and other software that manages processes and tracks business performance. The finance department itself likely has multiple cubes in use, and the process of extracting data from them and synthesizing it into a report or analysis can be time-consuming.
To address these issues, Star Analytics developed the Star Integration Server so that companies that have Hyperion applications (Planning, Financial Management or custom-built software built on Essbase) can more easily extract information for wider use (say, in a company-wide data warehouse or financial data mart). All departments within a corporation can then use the data in their applications or analyses. They can create reports (using whatever reporting and analysis tools they currently use) that use this information in conjunction with operational data from other sources. Moreover, the software allows companies to bring together data from multiple cubes so that they can analyze and report on all of the information that is kept in these separate data stores. Finance departments in particular are able to consolidate and manage complex hierarchy structures in their cubes so that they can speed up processes such as business analyses, periodic reporting, forecasting and planning. The Integration Server also enables companies to pull out proprietary data structures, embedded calculations (such as allocations or ratio analyses), business rules (consolidation parameters), security protocols and supporting detail from Hyperion applications. The software can support the data volumes larger companies use, as well as ensure that data security protocols are observed. The Integration Server has native support for exporting to major relational databases such as IBM’s DB2, Oracle, Microsoft SQL Server, MySQL and Sybase.
The Star Command Center automates data movements, database consolidations and schedule-related processes, eliminating the need to devote IT resources to repetitive mechanical tasks. It is a far more comprehensive, flexible and easy-to-maintain alternative to the custom coding approach organizations often adopt to lash together their disparate applications and databases. It is designed for point-and-click simplicity so that it is usable by finance/IT-types, in contrast to other tools aimed at IT/data center professionals. The Command Center even enables integration between on-premises and cloud-based data sources, and can be accessed and operated via a mobile application.
Currently, most companies either extract information from their Oracle/Hyperion systems in a laborious and time-consuming fashion, or have consultants build custom solutions. Companies that use Oracle’s Financial Management, Planning, Enterprise or custom applications running on Essbase should make it easier to integrate data from these systems for broader business analytics purposes. Users of Star Analytics’ software can save considerable amounts of time in performing analyses and generating reports – in some cases going from days down to hours. This technology will help IBM enable its vision for finance that I outlined last year and help companies using Oracle to find value from existing investments. Since financial information is available quickly, the data can be used to do more rapid planning and analysis cycles or have management or financial reports available sooner. Moreover, unlocking financial and other information enables corporations to do more integrated business analysis, planning and reporting. Information that was once inaccessible can be readily available when it’s needed. Knowing more enables companies to do more.
Robert Kugel – SVP Research