One of the major issues IT executives face is how to charge their departmental costs back to each part of the business according to their usage. It’s a touchy issue that can be the source of end-user disenchantment with the performance and contribution of the IT organization. Ultimately, charge-back friction can hobble IT’s ability to make necessary investments in new capabilities and become the primary cause of misallocated IT spending. The two risks are related: Unless an IT department can calculate the real costs of the services it provides to specific parts of the business and charge for them accordingly, it is almost impossible for line-of-business department managers to assign priorities to the “keep the lights on” part of the budget, so even low-priority maintenance or upgrade efforts can crowd out all but the most pressing needs. The issue of allocating IT department costs spills over to Finance, which typically handles the allocations in budgeting and profit calculations. As a first step toward establishing an effective means of funding the IT function, I believe the finance department must establish better methods of allocating IT costs. Eventually the proper allocation of IT costs also becomes an issue for senior corporate executives as well because it has a direct impact on how effectively a company uses information technology.
Topics: Performance Management, Office of Finance, Operational Performance Management (OPM), Budgeting, Analytics, Business Analytics, Business Intelligence, CIO, Enterprise Software, Business Performance Management (BPM), CFO, Financial Performance Management (FPM), CEO
SAP announced the release of version 10 of its SAP BusinessObjects Enterprise Performance Management (EPM) Solutions suite, an enhanced and updated set of applications and capabilities for executives and managers. In our Value Index assessment of financial performance management suites and my analysis of it last year, Ventana Research gave SAP’s offering the highest score, and this new release builds on that solid foundation that I already assessed in my blog. It has been several years since SAP began acquiring and assembling its performance management and analytical software assets, and the company has progressed to the point where discussing the integration efforts is becoming irrelevant. This release revamps the user interface of the different components to provide a more consistent look and feel – a crucial factor in facilitating training and improving user productivity. Outside of the suite itself, the current release is designed to integrate better with ERP, SAP NetWeaver BW, risk management and BI. In facts it establishes a foundation for finance analytics that I have researched and is essential for doing what I call and have written about in putting the “A” back in FP&A.
Topics: Planning, SAP, Forecast, Office of Finance, Operational Performance Management (OPM), budget, Budgeting, XBRL, Business Analytics, Business Intelligence, Business Mobility, Governance, Risk & Compliance (GRC), Business Performance Management (BPM), CFO, Financial Performance Management (FPM), Information Management (IM), Supply Chain Performance Management (SCPM), agile, budgeting software, CEO, Corporate Finance, Financial Performance Management, Integrated Business Planning
Alight Planning sells planning and budgeting software mainly to midsize companies and stresses its software’s ability to support a more effective approach to corporate planning and budgeting. It calls this “agile planning,” a term used to contrast a traditional, highly deterministic method of drawing up and executing plans with an “agile” mindset that is better able to deal with the high level of economic volatility that most businesses confront today. In many respects Alight’s approach is consistent with what Ventana Research refers to as “integrated business planning,” which I have written about as a business priority and an area that I have extensively researched.
Topics: Planning, Forecast, Office of Finance, Operational Performance Management (OPM), budget, Budgeting, CFO, Financial Performance Management (FPM), Sales Performance Management (SPM), Supply Chain Performance Management (SCPM), agile, budgeting software, CEO, Integrated Business Planning