Robert Kugel's Analyst Perspectives

The Office of Finance Research Agenda for 2017

Posted by Robert Kugel on Feb 16, 2017 6:33:18 AM

Senior finance executives and finance organizations that want to improve their performance must recognize the value of technology as a key tool for doing high-quality work. Consider how poorly your organization would perform if it had to operate using 25-year-old software and hardware. Having the latest technology isn’t always necessary, but it’s important for executives to understand that technology shapes a finance organization’s ability to improve its overall effectiveness.

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Topics: Big Data, data science, Mobile, Mobile Technology, Office of Finance, cloud computing, Continuous Planning, revenue recognition, Business Intelligence, Collaboration, analytics, Financial Performance Management, recurring revenue, Price and Revenue Management, Inventory Optimization, Billing and Recurring Revenue, Operations & Supply Chain, Enterprise Resource Planning, Sales and Operations Planning, Machine Learning and Cognitive Computing, ERP and Continuous Accounting, Collaboration for Business

Workday Financial Management Gains Momentum

Posted by Robert Kugel on Dec 2, 2015 11:37:53 PM

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.

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Topics: Microsoft, SAP, ERP, FP&A, NetSuite, Operational Performance Management (OPM), Reporting, close, closing, Controller, dashboard, Human Capital, Reconciliation, report, Tax, Analytics, Business Intelligence, Cloud Computing, Collaboration, IBM, Oracle, Uncategorized, Accounting, Business Performance Management (BPM), CFO, Data, finance, Financial Performance Management (FPM), Amazon, BI, Financial Performance Management, FPM, Intacct, scorecard, spreadsheet, treasury

Evolving to the Next Generation of ERP Systems

Posted by Robert Kugel on Nov 29, 2015 1:19:13 PM

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.

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Topics: Big Data, Microsoft, SAP, Social Media, ERP, FP&A, Mobile Technology, NetSuite, Operational Performance Management (OPM), Reporting, close, closing, Controller, dashboard, Human Capital, Reconciliation, report, Analytics, Business Intelligence, Cloud, Cloud Computing, Collaboration, IBM, Oracle, Uncategorized, Accounting, Business Performance Management (BPM), CFO, Data, finance, Financial Performance Management (FPM), Supply Chain Performance Management (SCPM), BI, Financial Performance Management, FPM, Intacct, scorecard

Oracle Must Pivot to Business Applications

Posted by Ventana Research on Nov 5, 2015 10:26:32 PM

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.

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Topics: Microsoft, SAP, ERP, FP&A, Mobile Technology, NetSuite, Operational Performance Management (OPM), Reporting, close, closing, Controller, dashboard, Human Capital, reconciliations, report, Tax, Analytics, Business Collaboration, Business Intelligence, Cloud, Cloud Computing, Collaboration, IBM, Oracle, Accounting, Business Performance Management (BPM), CFO, Customer Performance Management (CPM), Data, finance, Financial Performance Management (FPM), Sales Performance Management (SPM), Supply Chain Performance Management (SCPM), Amazon, BI, Financial Performance Management, FPM, Intacct, Predictive Analytics, scorecard, Spreadsheets, treasury

Continuous Accounting Enables a Strategic Finance Department

Posted by Ventana Research on Oct 29, 2015 9:51:54 PM

Many senior finance executives say they want their department to play a more strategic role in the management and operations of their company. They want Finance to shift its focus from processing transactions to higher-value functions in order to make more substantial contributions to the success of the organization. I use the term “continuous accounting” to represent an approach to managing the accounting cycle that can facilitate the shift by improving the performance of the accounting function. Continuous accounting embraces three main principles:

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Topics: ERP, FP&A, Reporting, close, closing, Controller, dashboard, reconciliations, report, Tax, Analytics, Business Intelligence, Cloud, Collaboration, Accounting, Business Performance Management (BPM), CFO, Data, finance, Financial Performance Management (FPM), BI, Financial Performance Management, FPM, scorecard, Spreadsheets, treasury

Office of Finance Research Demonstrates Importance of Using Effective Financial Software

Posted by Ventana Research on Feb 2, 2015 8:27:23 AM

Our recently published Office of Finance benchmark research assesses a broad set of functions and capabilities of finance organizations. We asked research participants to identify the most important issues for a finance department to address in a dozen functional areas: accounting, budgeting, cost accounting, customer profitability management, external financial reporting, financial analysis, financial governance and internal audit, management accounting, product profitability management, strategic and long-range planning, tax management and treasury and cash management. Among the key findings is this: Not using the most capable software is an underlying cause, often unrecognized, of process, analytics and data issues.

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Topics: Mobile, Planning, Predictive Analytics, ERP, FP&A, Reporting, Self-service, Budgeting, close, closing, computing, Controller, dashboard, planning and budgeting, report, Tax, Analytics, Business Intelligence, Cloud, Collaboration, Accounting, Business Performance Management (BPM), CFO, Data, finance, Financial Performance Management (FPM), BI, Financial Performance Management, FPM, Microsoft Excel, scorecard, Spreadsheets, treasury

Make Automating the Office of Finance and Accounting a Priority

Posted by Ventana Research on Jan 27, 2015 7:50:29 AM

Our recent Office of Finance benchmark research demonstrates the importance of using automation to execute finance department functions. Information technology systems do at least two things very well that make better use of people’s time, and both of them can substantially improve organizational performance. First, they eliminate the need for people to do repetitive tasks, which frees them to spend time on more valuable work that requires judgment and skill. IT systems also can be programmed to focus only on relevant information while eliminating the need to get immersed in detail. The latter capability supports a “management by exception” approach, which enables executives and managers to better allocate how and where they spend their time.

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Topics: Big Data, Mobile, Planning, ERP, FP&A, Reporting, Self-service, Budgeting, close, closing, computing, Controller, dashboard, planning and budgeting, reconciliations, report, Tax, Analytics, Business Analytics, Business Collaboration, Business Intelligence, Cloud, Collaboration, Accounting, Business Performance Management (BPM), CFO, Data, finance, Financial Performance Management (FPM), BI, Financial Performance Management, FPM, Microsoft Excel, scorecard, Spreadsheets, treasury

Finance Needs Better Analytics and Analytic Skills

Posted by Ventana Research on Oct 13, 2014 11:58:44 PM

Finance and accounting departments are staffed with numbers-oriented, naturally analytical people. Strong analytic skills are essential if a finance department is to deliver deep insights into performance and visibility into emerging opportunities and challenges. The conclusions of analyses enable fast, fully informed business decisions by executives and managers. Conversely, flawed analyses undermine the performance of a company. So it was good news that in our Office of Finance benchmark research 62 percent of participants rated the analytical skills of their finance organization as above average or excellent.

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Topics: Big Data, Mobile, Planning, Predictive Analytics, ERP, FP&A, Reporting, Self-service, BizNet Software, Budgeting, close, closing, computing, Controller, dashboard, planning and budgeting, report, Tax, Analytics, Business Analytics, Business Intelligence, Cloud, Cloud Computing, Collaboration, Accounting, Business Performance Management (BPM), CFO, Data, finance, Financial Performance Management (FPM), Tagetik, BI, Financial Performance Management, FPM, Microsoft Excel, scorecard, Spreadsheets, treasury

Businesses Must Make Self-Service Reporting a Priority

Posted by Robert Kugel on Aug 3, 2014 9:12:30 AM

One of the charitable causes to which I devote time puts on an annual vintage car show. The Concours d’Élegance dates back to 17th century France, when wealthy aristocrats gathered with judges on a field to determine who had the best carriages and the most beautiful horsepower. Our event serves as the centerpiece of a broader mission to raise money for several charitable organizations. One of my roles is to keep track of the cars entered in the show, and in that capacity I designed an online registration system. I’ve been struck by how my experiences with a simple IT system have been a microcosm of the issues that people encounter in designing, administering and using far more sophisticated  ones. My most important take-away from this year’s event is the importance of self-service reporting. I suspect that most senior corporate executives – especially those in Finance – fail to appreciate the value of self-service reporting. It frees up the considerable resources organizations collectively waste on unproductive work, and it increases responsiveness and agility of the company as a whole.

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Topics: Planning, Operational Performance Management (OPM), Reporting, Self-service, BizNet Software, Budgeting, dashboard, report, Analytics, Business Analytics, Business Intelligence, Business Intelligence (BI), Business Performance Management (BPM), Customer Performance Management (CPM), Data, Financial Performance Management (FPM), Information Applications (IA), Sales Performance Management (SPM), Supply Chain Performance Management (SCPM), Workforce Performance Management (WPM), BI, Financial Performance Management, Microsoft Excel, scorecard, Spreadsheets

Tagetik Advances Disclosure Management for Office of Finance

Posted by Robert Kugel on Jul 16, 2014 9:05:58 AM

Tagetik provides financial performance management software. One particularly useful aspect of its suite is the Collaborative Disclosure Management (CDM). CDM addresses an important need in finance departments, which routinely generate highly formatted documents that combine words and numbers. Often these documents are assembled by contributors outside of the finance department; human resources, facilities, legal and corporate groups are the most common. The data used in these reports almost always come from multiple sources – not just enterprise systems such as ERP and financial consolidation software but also individual spreadsheets and databases that collect and store nonfinancial data (such as information about leased facilities, executive compensation, fixed assets, acquisitions and corporate actions). Until recently, these reports were almost always cobbled together manually – a painstaking process made even more time-consuming by the need to double-check the documents for accuracy and consistency. The adoption of a more automated approach was driven by the requirement imposed several years ago by United States Securities and Exchange Commission (SEC) that companies tag their required periodic disclosure filings using eXtensible Business Reporting Language (XBRL), which I have written about. This mandate created a tipping point in the workload, making the manual approach infeasible for a large number of companies and motivating them to adopt tools to automate the process. Although disclosure filings were the initial impetus to acquire collaborative disclosure management software, companies have found it useful for generating a range of formatted periodic reports that combine text and data, including board books (internal documents for senior executives and members of the board of directors), highly formatted periodic internal reports and filings with nonfinancial regulators or lien holders.

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Topics: Mobile, ERP, forecasting, Modeling, Reporting, Budgeting, close, closing, Consolidation, Controller, Finance Financial Applications Financial Close, IFRS, multinational Tagetik, process management, report, strategy, XBRL, Analytics, Business Analytics, Business Intelligence, Governance, Risk & Compliance (GRC), Accounting, Business Performance Management (BPM), CFO, Chief Financial Officer, compliance, Data, Financial Performance Management (FPM), benchmark, Financial Performance Management, financial reporting, FPM, GAAP, Integrated Business Planning, Profitability, SEC Software, spreadsheet