Robert Kugel's Analyst Perspectives

ERP Can Help Transform Finance

Posted by Ventana Research on Sep 25, 2016 1:04:12 AM

Like many other industry observers I’ve heard overblown claims for information technology for decades. However, I’ve also observed that – eventually – reality catches up with vision. Finance and accounting departments are particularly resistant to change, yet because almost no corporations use adding machines or typewriters any more, it’s clear that transformative change can happen. Nonetheless, because users of business computing systems are inundated with “it’s better than ever” promotions by vendors, journalists and industry analysts, may have grown jaded and disbelieving. In the case of ERP systems that help run many organizations, that is too bad because we are finally at the point of a fundamental change in this business-critical software category.

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Topics: Social Media, Mobile Technology, Operational Performance Management (OPM), Human Capital, Business Analytics, Business Collaboration, Cloud Computing, Business Intelligence (BI), Business Performance Management (BPM), Customer Performance Management (CPM), Financial Performance Management (FPM), Supply Chain Performance Management (SCPM), Accounting, Analytics, big data, Budgeting, CEO, C

Get to Know Enterprise Spreadsheets to Improve Business Effectiveness

Posted by Ventana Research on Sep 25, 2016 12:14:45 AM

Ventana Research coined the term “enterprise spreadsheet” in 2004 to describe a variety of software applications that add a desktop spreadsheet’s user interface (usually that of Microsoft Excel) to components that address the issues that arise when desktop spreadsheets are used in repetitive, collaborative enterprise processes. Enterprise spreadsheets are designed to provide the best of both worlds in that they offer the ease of use and flexibility of desktop spreadsheets while overcoming their defects – chiefly inability to maintain data integrity, lack of referential integrity and dimensionality, absence of workflow and process controls, limited security and access controls as well as poor auditability. All of these issues can cause serious problems for business use, which I’ll discuss below.

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Topics: Operational Performance Management (OPM), Business Analytics, Uncategorized, Business Intelligence (BI), Business Performance Management (BPM), Customer Performance Management (CPM), Financial Performance Management (FPM), Information Management (IM), Sales Performance Management (SPM), Supply Chain Performance Management (SCPM), Analytics, benchmark, enterprise spreadsheet, Fina

Corporate Controllers: Always Be Closing!

Posted by Ventana Research on Sep 9, 2016 9:51:30 AM

It strikes me that the motto of successful salespeople – “ABC: Always Be Closing!” – could apply equally to corporate controllers, albeit in the accounting sense. For a while now I’ve been advocating continuous accounting, a holistic approach to managing the finance and accounting function that, in part, emphasizes using technology to distribute workloads more evenly over an accounting period – in effect to always be closing rather than waiting until the end of the month or quarter. Continuous accounting also stresses improving efficiency by automating repetitive processes and enhancing organizational effectiveness by improving data integrity in finance processes.

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Topics: Business Performance Management (BPM), Financial Performance Management (FPM), Accounting, Consolidation, ERP, Financial Performa

Vendavo Builds Price and Revenue Optimization into Business Processes

Posted by Ventana Research on Sep 1, 2016 9:02:00 AM

Vendavo is a vendor of business-to-business (B2B) price and revenue optimization software, which I have written about. A major focus of the conference sessions this year at the company’s annual user group meeting was on practical approaches to successful price optimization initiatives. While this category of software has been achieving increasing acceptance, penetration is still limited in the B2B segment, which includes, for example, industrial goods and services.

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Topics: Big Data, Operational Performance Management (OPM), Business Analytics, Business Performance Management (BPM), Customer Performance Management (CPM), Financial Performance Management (FPM), Sales Performance Management (SPM), Vendavo, price, pricing, optimization, revenue, cu

Unit4 Adds Financial Performance Management with Prevero Acquisition

Posted by Ventana Research on Aug 23, 2016 8:12:56 AM

Unit4, a Netherlands-based vendor of financial management software focused mainly on midsize companies, recently acquired prevero, a German vendor of performance management and business intelligence software. The acquisition reflects a convergence of transactional and analytic business applications, which I have written about. ERP and financial management software vendors increasingly are adding analytic capabilities – especially in financial performance management (FPM) – to the core functions of transaction processing and accounting to broaden the scope of their offerings.

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Topics: Business Analytics, Business Performance Management (BPM), Financial Performance Management (FPM), Accounting, Consolidation, ERP, Financial Performa

Recurring Revenue Billing: Where Back Office Meets Front Office

Posted by Ventana Research on Aug 18, 2016 9:42:26 AM

Invoicing and billing are mundane business activities that hardly anyone outside of the accounting department cares about, but they are where the back office meets the front office. How well a company handles the process of getting paid by its customers can have an impact on its relationships with them. Like most of the details of business process execution, the impact of substandard invoicing and billing is rarely obvious or even of interest to senior management. That said, like trimming scrap rates or increasing sales pipeline conversion rates by a couple of percentage points, achieving consistent incremental gains in the “little stuff” of business usually translates into greater competitiveness and better financial performance.

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Topics: Cloud Computing, Business Performance Management (BPM), Customer Performance Management (CPM), Financial Performance Management (FPM), Sales Performance Management (SPM), Accounting, Aria Systems, billing, billing softwar

IBM Watson and Cognitive Computing to Streamline Compliance

Posted by Ventana Research on Aug 5, 2016 9:45:34 AM

Today’s proponents of artificial intelligence (AI) tend to focus on its spectacular uses such as self-driving cars and uplifting ones such as medical treatment. AI also has the potential to aid humanity in more modest ways such as eliminating the need for individuals to do tedious repetitive work in white-collar areas. Along these lines, at its recent Vision users conference, IBM displayed an application of its Watson cognitive computing technology designed to automate important aspects of regulatory and legal compliance. Should it prove workable, the application of cognitive computing to compliance could be the first step in achieving what various “Paperwork Reduction Act” legislation has failed to do: substantially cutting the time needed to comply with rules imposed by government entities.

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Topics: Operational Performance Management (OPM), Cloud Computing, Governance, Risk & Compliance (GRC), Uncategorized, Business Performance Management (BPM), Financial Performance Management (FPM), GRC, governance, risk, compliance, risk management

Distributed Ledgers Have Business Value beyond Bitcoin

Posted by Ventana Research on Jul 28, 2016 2:59:13 AM

The blockchain distributed database was invented to create the peer-to-peer digital cash called bitcoin in 2008. Although the future potential of bitcoin and other cryptocurrencies has been debated, the distributed ledger structure using a blockchain database that supports bitcoin is likely to be adopted for a range of commercial and governmental purposes. Distributed ledgers are a secure and transparent way to digitally track the ownership of assets while enabling faster transaction speeds and reducing potential for fraud. How quickly companies, governments and individuals start using distributed ledgers and for what specific purposes remain to be seen, but their use will be independent of cryptocurrencies’ fortunes. Expansion in the use of distributed ledgers will depend heavily on the success of the initial applications and whether there are major hiccups in their use.

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Topics: Operational Performance Management (OPM), Uncategorized, Business Performance Management (BPM), Customer Performance Management (CPM), Financial Performance Management (FPM), Sales Performance Management (SPM), Supply Chain Performance Management (SCPM), blockchain, distributed ledger, DLT, ERP, SCM, sup

Modeling Revenue Recognition for Contracts to Meet New Regulations

Posted by Ventana Research on Jul 22, 2016 9:19:10 AM

I recently wrote about the challenge some companies will face in planning and budgeting when new revenue recognition rules go into effect in most countries in 2018. It’s important for companies that will be affected to be sure they have the appropriate systems, processes and training to handle the more difficult demands imposed by the new rules. With the change in accounting, the time lag between when a contract is signed and when a company recognizes revenue from it may be more variable and less predictable than in the past. In extreme cases, performance measured by financial accounting will diverge materially from the “real” economic performance of the organization. Consequently, executives – especially those leading publicly listed companies – will need the ability to look at their plans from both perspectives and be able to distinguish between the two in assessing their company’s performance. In companies where the timing of revenue recognition can diverge substantially from current methods, financial planning and analysis (FP&A) groups will need to be able plan using models that incorporate financial and managerial accounting methods in parallel. They will need to be able to identify actual-to-plan variances caused by differences in contract values booked in a period and differences between the expected and actual timing of revenue recognized from contracts signed in a period.

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Topics: Big Data, Uncategorized, Business Performance Management (BPM), Financial Performance Management (FPM), Sales Performance Management (SPM)

Accounting for Sales Compensation Faces Challenges under ASC 606 and IFRS 15

Posted by Ventana Research on Jul 13, 2016 9:43:58 AM

New standards governing accounting for contracts will go into effect for most companies in 2018. The Financial Accounting Standards Board (FASB), which administers Generally Accepted Accounting Principles in the U.S. (US-GAAP), has issued ASC 606, and the International Accounting Standards Board (IASB), which administers International Financial Reporting Standards (IFRS) used in most other countries, has issued IFRS 15. The two are very similar, and both will enforce fundamental changes in this area of accounting. Under the new approach to accounting for contracts, revenue (and some corresponding expense) is recognized only when customers are satisfied. In contrast, until now revenue was recognized when internally measurable events occurred, such as on delivery to the customer, the completion of milestones or the passage of time. In addition to dealing with an impact on accounting and planning, which I have discussed, companies may need to examine how the rules will affect how they account for commissions and other contract acquisition expenses.

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Topics: Uncategorized, Business Performance Management (BPM), Financial Performance Management (FPM), Sales Performance Management (SPM), sales, sales compensation, incentives, ASC 06, IFR