Robert Kugel's Analyst Perspectives

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

The Challenge of Making ERP Systems More Configurable

Posted by Robert Kugel on Jan 31, 2014 9:43:58 AM

In the wake of the past year’s usual crop of failed ERP implementations, I’ve read a couple of blogs that bemoan the fact that ERP systems are not nearly as user-friendly or intuitive as the mobile apps that everyone loves. I’ve complained about this aspect of ERP, and our research confirms that ERP systems are viewed as cumbersome: Just one in five companies (21%) said it is easy to make changes to ERP systems while one-third (33%) said making changes is difficult or very difficult. Yet as with many such technology topics, addressing the difficulty in working with ERP systems is not as straightforward as one might hope. ERP software vendors must make it easier, less expensive and less risky for customers to adapt the systems they buy to their changing business needs. To do this, vendors must design products to be more configurable. The goal should be that organizations can make changes and add new capabilities to their ERP system in far less time than it takes today and without having to engage outside consultants.

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Topics: Mobile, SAP, ERP, Analytics, Business Collaboration, Cloud Computing, Oracle, Business Performance Management (BPM), CFO, Financial Performance Management (FPM), Infor, Workday, Social, business process, FPM, Intacct

Next-Generation ERP Must Take a Giant Leap

Posted by Robert Kugel on Sep 25, 2013 12:09:01 AM

Enterprise resource planning (ERP) systems emerged in the 1990s. Even though they don’t do much in the way of planning, the systems provide companies a means of centralizing and consolidating transaction data collection (such as purchase orders, inventory movements and depreciation), automating the management of processes, and handling the bookkeeping and financial record keeping for these transactions and related processes. ERP systems are an indispensable piece of IT infrastructure in today’s enterprises. Alas, they also are inherently flawed. But perhaps not for much longer.

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Topics: Mobile, SAP, Social Media, ERP, Operational Performance Management (OPM), Analytics, Business Collaboration, Cloud Computing, Oracle, Business Performance Management (BPM), CFO, Infor, Supply Chain Performance Management (SCPM), Workday, Social, FPM, Intacct

Software Aims To Prevent Foreign Corrupt Practices

Posted by Robert Kugel on May 8, 2013 10:51:18 PM

In some parts of the world, bribing government officials is still considered a normal cost of doing business. Elsewhere there has been a growing trend over the past 40 years to make it illegal for a corporation to pay bribes. In the United States, Congress passed the Foreign Corrupt Practices Act (FCPA) in 1977 in the wake of a succession of revelations of companies paying off government officials to secure arms deals or favorable tax treatment. More recently other governments have implemented anticorruption statutes. The U.K., for instance, enacted the strict Bribery Act in 2010 to replace increasingly ineffective statutes dating back to 1879. The purpose of these actions is to enable ethical and law-abiding companies to compete on a level playing field with those that are neither. A cynic might wonder about the real, functional difference between, say, Wal-Mart’s recent payments to officials in Mexico to accelerate approval of building permits and the practice in New York City of having to engage expediters to ensure timely sign-offs on construction approval documents. No matter – the latter is legal (it’s a domestic issue, after all) while the former is not.

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Topics: SAP, ERP, Governance, GRC, Operational Performance Management (OPM), bribery, Business Analytics, Governance, Risk & Compliance (GRC), IBM, Operational Intelligence, Oracle, Business Performance Management (BPM), CFO, compliance, Financial Performance Management (FPM), FPM, Oversight Systems

SAP’s New Fraud Management Analytical Application

Posted by Robert Kugel on Apr 2, 2013 11:20:35 AM

SAP recently announced its new Fraud Management analytic applications. Currently in “controlled” (limited) release, it’s a promising start for the product and a good example of the type of business process revolution that’s possible when companies can execute complex analytics on big data sets using in-memory and other advanced processing techniques. Over the next several years a wide swath of basic corporate processes will be transformed by the shift to in-memory processing and big data technology, two key foundational elements of my office of finance research agenda. HANA has been a consistent element of SAP’s product strategy and underlies many recent new releases, such as Business Suite on HANA.

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Topics: SAP, Fraud, Governance, GRC, audit, Analytics, Business Analytics, Governance, Risk & Compliance (GRC), Accounting, Business Performance Management (BPM), compliance, Financial Performance Management (FPM), Risk, HANA, insurance

SAP Announces Business Suite on HANA

Posted by Robert Kugel on Jan 11, 2013 11:31:24 AM

For the past couple of years I’ve been pointing to the importance of in-memory computing to the future of business applications. It’s an integral part of Ventana Research’s business and finance research agenda for 2013, and it’s one of the core technologies that senior executives should have an appreciation for because it can transform all core business processes, especially those that are analytic in nature.

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Topics: Mobile, Predictive Analytics, Real-time, SAP, ERP, Operational Performance Management (OPM), Analytics, Business Analytics, Business Collaboration, Cloud Computing, In-memory, Business Performance Management (BPM), CRM, Customer Performance Management (CPM), finance, Financial Performance Management (FPM), Sales Performance Management (SPM), Supply Chain Performance Management (SCPM), Workforce Performance Management (WPM), Social, Business Suite, Financial Performance Management, HANA

SAP Takes Business and Finance Mobile Using SAP HANA

Posted by Robert Kugel on Oct 19, 2012 12:20:14 PM

SAP has inaugurated a new series of business applications it calls Enterprise Performance Management (EPM) OnDemand as a cloud-based subscription service. The applications are part of SAP’s EPM version 10 suite, which it introduced last year. It’s a first step in what is likely to be a portfolio of general-purpose, lightweight and relatively low-cost apps designed to be used on mobile devices. Using HANA on the back end, the applications can deliver high performance in accessing masses of business data and deliver actionable information to executives and managers. The three on-demand apps in EPM are for expense management, profit-and-loss (P&L) analysis and capital project management. They also just released its SAP Business Planning and Consolidation that has a mobile version on the Apple iPad that is part of its recently announced EPM UnWired. The move is another indication of SAP’s emphasis on cloud computing, which my colleague Mark Smith covered earlier this year.

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Topics: Big Data, Performance Management, SAP, Operational Performance Management (OPM), expense, Analytics, Business Analytics, Business Collaboration, Cloud Computing, Business Applications, Business Performance Management (BPM), Customer Performance Management (CPM), Financial Performance Management (FPM), Sales Performance Management (SPM), Supply Chain Performance Management (SCPM), Workforce Performance Management (WPM), FPM, HANA, profit

Ariba Acquisition Will Bolster SAP’s Growing Cloud Presence

Posted by Robert Kugel on May 24, 2012 10:13:55 AM

SAP is planning to acquire e-commerce company Ariba in a transaction worth about US$4.3 billion expected to close in the third quarter of this year. Ariba provides cloud-based collaborative business commerce through a Web-based trading community that enables companies to find, connect and collaborate with a global network of partners. Its Commerce Cloud is a platform that businesses can use to buy and sell goods. Currently, Ariba counts more than 700,000 companies worldwide attached to this network. The purchase follows SAP's acquisition of cloud-based HR software vendor SuccessFactors for $3.4 billion. In the past SAP had been reluctant to make large acquisitions, but these two large purchases and the naming of Lars Dalgaard, former SuccessFactors CEO, to the SAP executive board indicate the strategic imperative SAP puts on quickly gaining a solid cloud presence. The acquisition also complements its 2011 acquisition of Crossgate, an electronic data interchange (EDI) service provider, which enables companies to exchange documents with customers, suppliers, supply chain partners, financial institutions and government entities, streamlining transactions and cutting administrative costs.

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Topics: SAP, ERP, EDI, end-to-end process, Analytics, Cloud, Uncategorized, CRM, Ariba, integration, merger, SCM