Robert Kugel's Analyst Perspectives

Successful Price Optimization Has Multiple Dimensions

Posted by Robert Kugel on Oct 28, 2011 9:54:18 AM

As its name suggests, demand-based pricing is a method that uses the buyer’s demand, based on an estimate of a good’s or service’s perceived value to the buyer, as the central element in setting price. Pricing strategies are most important because they can have a disproportionate impact (positive and negative) on a company’s bottom line. Managing prices has always been an activity of keen interest, but it has become even more so over the past decade as a result of the constrained pricing environment.

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Topics: Analytics, Business Analytics, Business Performance Management (BPM), Financial Performance Management (FPM), Operational Performance Management (OPM), Performance Management, Price Optimization, Profitability, Sales Performance Management (SPM), Software, Human Capital Management, Sales, Office of Finance

Kinaxis Users Deal with Supply Chain Complexity

Posted by Robert Kugel on Oct 27, 2011 2:54:01 AM

I recently attended Kinaxis’ users’ group meeting and learned some interesting things. The company, which has been around since 1995, provides software for large corporations with complex supply chains. Over the past decade its product has evolved well past its roots as a material requirements planning (MRP) support tool. It is now an analytics suite that facilitates supply and demand planning, analysis and optimization with a focus on sales and operations planning (S&OP). This is a discipline that is much talked about but less well practiced, done effectively by only a handful of very large companies (Cisco, for example) and smaller ones that have defined their functional strategy around S&OP and logistics management. In our S&OP benchmark research, we assessed the degree to which companies have a broad cross-functional representation in the process (a critical aspect of an effective S&OP effort) by asking which parts of the business were involved. When it comes to five of the most important ones – executive management, manufacturing, operations, sales and finance – our research showed that only 21 percent of companies have four or five participating, while 45 percent of companies have none or just one.

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Topics: Budgeting, Business Analytics, Business Collaboration, Business Performance Management (BPM), Cloud Computing, Financial Performance Management (FPM), Integrated Business Planning, Kinaxis, Operational Performance Management (OPM), Planning, Sales Performance Management (SPM), S&OP, Supply Chain, Supply Chain Performance Management (SCPM), Sales, Office of Finance, demand management

Planning for Fixed-Asset Investment Requires the Right Tool Not Just a Spreadsheet

Posted by Robert Kugel on Oct 20, 2011 9:12:00 AM

In today’s economy, all companies are contending with a dynamic business environment characterized by volatile commodity prices and exchange rates, a shaky global financial system and slow growth in many countries. Many of them rely heavily on desktop spreadsheets to support the data collection and analysis related to their capital-asset planning. However, spreadsheets have inherent limitations that make them the wrong choice.

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Topics: agile, Budgeting, Business Performance Management (BPM), capital spending, contingency, Financial Performance Management (FPM), IBM, Operational Performance Management (OPM), Oracle, Planning, Planview, SAP, Office of Finance, Big Data

A Practical Look at Driver-Based Planning

Posted by Robert Kugel on Oct 12, 2011 11:23:28 AM

I hadn’t thought about the exact definition of “driver-based planning” until the question came up in the context of our planning benchmark research showing that only 6% of companies with more than 100 employees do driver-based planning. Broadly defined, the term could be applied to the use of any spreadsheet-planning model because these almost always have built-in volume-times-price formulas, which are components of driver-based plans. However, this is not what most people have in mind when they talk about driver-based planning, and that’s reflected in the low percentage of those employing the technique.

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Topics: Analytics, best pracices, Budgeting, Business Analytics, Business Collaboration, Business Performance Management (BPM), business value, challenge, driver-based, Financial Performance Management (FPM), financial planning, Modeling, Operational Performance Management (OPM), Performance Management, Planning, Sales Performance Management (SPM), Workforce Performance Management (WPM), Office of Finance, Big Data, cash management

The Value and Limits of the Term “GRC”

Posted by Robert Kugel on Oct 11, 2011 10:40:02 AM

My colleague Mark Smith and I have frequently commented on the artificiality of the emerging software category governance, risk and compliance (GRC). To be sure, once stand-alone categories of software (IT governance, audit documentation and industry-specific compliance management, to name three examples) have started what I expect to be a long convergence process. Moreover, since just about all controls and risk management efforts require a secure IT environment to be effective, there is a growing interdependence between effective IT governance and everything else connected with enterprise GRC.

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Topics: Business Performance Management (BPM), compliance, controls, enterprise risk management, ERM, Financial Performance Management (FPM), Governance, GRC, IT governance, Operational Performance Management (OPM), Risk, Customer Experience, Office of Finance

Apps Hard To Find at Oracle Open World

Posted by Robert Kugel on Oct 7, 2011 8:23:04 AM

The assessment of a major focus of Oracle Open World by my colleague David Menninger sums up what I also see as the key strategic element of the event: the new appliance including that called Exalytics. My focus as an industry analyst is on the needs of the line-of-business user, not IT. And that’s the source of my ongoing frustration with this event: It’s not an application user’s conference, especially compared to the PeopleSoft and Hyperion annual gatherings of the past before Oracle acquired and absorbed them. Open World seems almost grudging in addressing their needs, and so it’s not surprising that there don’t appear to be many business users here. For example, other than the Finance IT folks, I’m not sure who from the finance organization was in attendance. In their case, most companies with fiscal years ending in December, March, June or September – and these constitute the vast majority of corporations – are busy with their quarterly financial close this week. Applications sessions focused on the basics and, while I might have missed the one or two line-of-business  show-stopper success stories, the ones I saw were ho-hum. Another indication that applications are not the focus of the event is the location of the Hyperion breakout sessions, which were a 15-minute walk from the Moscone Center this year.

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Topics: Analytics, Business Performance Management (BPM), Financial Performance Management (FPM), financials, Fusion Applications, Hyperion, Open World, Oracle, Big Data

Just Buying Software Does Not Add Value

Posted by Robert Kugel on Oct 4, 2011 10:02:57 AM

I read a blog post by Ben Lamorte, VP of marketing and sales at Alight Planning who delivers business and financial planning applications, who askswhy financial reporting tools deliver no business value. This led me to think that there are more than a few ways to waste money buying software, but I want to focus on one of the most common ones: assuming that having a new application will automatically improve your business (or believing a vendor who tells you that it will).

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Topics: Budgeting, Business Collaboration, Business Performance Management (BPM), Financial Performance Management (FPM), Operational Performance Management (OPM), Planning, Reporting, Workforce Performance Management (WPM), Sales