Workiva’s Wdesk, a cloud-based productivity application for handling composite documents, will have a larger role to play as companies adopt new revenue recognition standards governing accounting for contracts. 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 accounting for contracts.
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.
Topics: Microsoft, SAP, ERP, FP&A, NetSuite, Office of Finance, Operational Performance Management (OPM), Reporting, close, closing, Controller, dashboard, Human Capital, Reconciliation, Tax, Analytics, Business Intelligence, Cloud Computing, Collaboration, IBM, Oracle, Uncategorized, Business Performance Management (BPM), CFO, Data, finance, Financial Performance Management (FPM), Financial Performance Management, FPM, Intacct
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.
Topics: Big Data, Microsoft, SAP, Social Media, ERP, FP&A, Mobile Technology, NetSuite, Office of Finance, Operational Performance Management (OPM), Reporting, close, closing, Controller, dashboard, Human Capital, Reconciliation, Analytics, Business Intelligence, Cloud Computing, Collaboration, IBM, Oracle, Uncategorized, Business Performance Management (BPM), CFO, Data, finance, Financial Performance Management (FPM), Supply Chain Performance Management (SCPM), Financial Performance Management, FPM, Intacct
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.
Topics: Microsoft, Predictive Analytics, SAP, ERP, FP&A, Mobile Technology, NetSuite, Office of Finance, Operational Performance Management (OPM), Reporting, close, closing, Controller, dashboard, Human Capital, Tax, Analytics, Business Collaboration, Business Intelligence, Cloud Computing, Collaboration, IBM, Oracle, Business Performance Management (BPM), CFO, Customer Performance Management (CPM), Data, finance, Financial Performance Management (FPM), Sales Performance Management (SPM), Supply Chain Performance Management (SCPM), Financial Performance Management, FPM, Intacct, Spreadsheets
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:
Topics: ERP, FP&A, Office of Finance, Reporting, close, closing, Controller, dashboard, Tax, Analytics, Business Intelligence, Cloud Computing, Collaboration, Business Performance Management (BPM), CFO, Data, finance, Financial Performance Management (FPM), Financial Performance Management, FPM, Spreadsheets
In our benchmark research at least half of participants that use spreadsheets to support a business process routinely say that these tools make it difficult for them to do their job. Yet spreadsheets continue to dominate in a range of business functions and processes. For example, our recent next-generation business planning research finds that this is the most common software used for performing 11 of the most common types of planning. At the heart of the problem is a disconnect between what spreadsheets were originally designed to do and how they are actually used today in corporations. Desktop spreadsheets were intended to be a personal productivity tool used, for example, for prototyping models, creating ad hoc reports and performing one-off analyses using simple models and storing small amounts of data. They were not built for collaborative, repetitive enterprise-wide tasks, and this is the root cause of most of the issues that organizations encounter when they use them in such business processes. Software vendors and IT departments have been trying – mainly in vain – to get users to switch from spreadsheets to a variety of dedicated applications. They’ve failed to make much of a dent because, although these applications have substantial advantages over spreadsheets when used in repetitive collaborative enterprise tasks, these advantages are mainly realized after the model, process or report is put to use in the “production” phase (to borrow an IT term). To date most dedicated applications have been far more difficult than spreadsheets for the average business user to use in the design and test phases. To convince people to switch to their dedicated application, a vendor must offer an alternative that lets users model, create reports, collect data and create dedicated data stores as easily as they can do it in a desktop spreadsheet. Spreadsheets are seductive for most business users because, even with a minimum amount of training and experience, it’s possible to create a useful model, do analysis and create reports. Individuals can immediately translate what they know about their business or how to present their ideas into a form and format that makes sense to them. They can update and modify it whenever they wish, and the change will occur instantly. For these business users ease of use and control trump putting up with the issues that routinely occur when spreadsheets are used in collaborative enterprise processes. Moreover, it’s hard to persuade “spreadsheet jockeys” who have strong command of spreadsheet features and functions that they should start over and learn how to use a new application. Those who have spent their careers working with spreadsheets often find it difficult to work with formal applications because those applications work in ways that aren’t intuitive. Personally these diehards may resist because not having control over analyses and data would diminish their standing in the organization. Nevertheless, there are compelling reasons for vendors to keep trying to devise dedicated software that an average business user would find as easy and intuitive as a desktop spreadsheet in the design, test and update phases. Such an application would eliminate the single most important obstacle that keeps organizations from switching. The disadvantages of using spreadsheets are clear and measurable. One of the most significant is that spreadsheets can waste large amounts of time when used inappropriately. After more than a few people become involved and a file is used and reused, issues begin to mount such as errors in data or formulas, broken links and inconsistencies. Changes to even moderately complex models are time-consuming. Soon, much of the time spent with the file is devoted to finding the sources of errors and discrepancies and fixing the mistakes. Our research confirms this. When it comes to important spreadsheets that people use over and over again to collaborate with colleagues, on average people spend about 12 hours per month consolidating, modifying and correcting the spreadsheets. That’s about a day and a half per month – or five to 10 percent of their time – just maintaining these spreadsheets. Business applications vendors started to address business users’ reluctance to use their software more than a decade ago when they began to use Microsoft Excel as the user interface (UI). This provides a familiar environment for those who mainly need to enter data or want to do some “sandbox” modeling and analysis. Since the software behind the UI is a program that uses some sort of database, companies avoid the issues that almost arise when spreadsheets are used in enterprise applications. There also are products that address some of the inherent issues with such as the difficulty of consolidating data from multiple individual spreadsheets as well as keeping data consistent. Visualization software, a relatively new category, greatly simplifies the process of collecting data from one or more enterprise data sources and creating reports and dashboards. As the enterprise software applications business evolves to meet the needs of a new generation of users, as I mentioned recently, it’s imperative that vendors find a way to provide users with software that is a real alternative to desktop spreadsheets. By this I mean enterprise software that provides business users with the same ability to model, create reports and work with data the way they do in a desktop spreadsheet as well as update and modify these by themselves without any IT resources. At the same time, this software has to eliminate all of the problems that are inevitable when spreadsheets are used. Only at that point will a dedicated application become a real alternative to using a spreadsheet for a key business process. Regards, Robert Kugel – SVP Research
Topics: Planning, ERP, Forecast, GRC, Office of Finance, Operational Performance Management (OPM), Reporting, closing, dashboard, enterprise spreadsheet, Excel, Analytics, Business Analytics, Business Collaboration, Business Intelligence, Business Performance Management (BPM), Customer Performance Management (CPM), Data, Financial Performance Management (FPM), Risk, Sales Performance Management (SPM), Supply Chain Performance Management (SCPM), application, benchmark, Financial Performance Management
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.
Topics: Mobile, Planning, Predictive Analytics, ERP, FP&A, Office of Finance, Reporting, Self-service, Budgeting, close, closing, computing, Controller, dashboard, Tax, Analytics, Business Intelligence, Cloud Computing, Collaboration, Business Performance Management (BPM), CFO, Data, finance, Financial Performance Management (FPM), Financial Performance Management, FPM, Microsoft Excel, Spreadsheets
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.
Topics: Big Data, Mobile, Planning, ERP, FP&A, Office of Finance, Reporting, Self-service, Budgeting, close, closing, computing, Controller, dashboard, Tax, Analytics, Business Analytics, Business Collaboration, Business Intelligence, Cloud Computing, Collaboration, Business Performance Management (BPM), CFO, Data, finance, Financial Performance Management (FPM), Financial Performance Management, FPM, Microsoft Excel, Spreadsheets
Finance transformation” refers to a longstanding objective: shifting the focus of CFOs and finance departments from transaction processing to more strategic, higher-value functions. Our upcoming Office of Finance benchmark research confirms that most of organizations want their finance department to take a more strategic role in management of the company: nine in 10 participants said that it’s important or very important. (We are using “finance” in its broadest sense, including, for example, accounting, corporate finance, financial planning and analysis, treasury and tax functions.) Finance departments have the ability and at least an implicit mandate to improve business performance and enable a corporation to execute strategy more effectively. Yet the research shows that becoming strategic is a work in progress. Most departments handle the basics well, but half fall short in areas that can contribute significantly to the performance of their company. More than three-fourths of participants said they perform accounting, external financial reporting, financial analysis, budgeting and management accounting well or very well. But only half said that about their ability to do product and customer profitability management, strategic and long-range planning and business development.
Topics: Big Data, Mobile, Performance Management, Predictive Analytics, Social Media, ERP, FP&A, Office of Finance, Reporting, Management, close, closing, computing, Controller, Tax, Analytics, Business Analytics, Business Collaboration, Cloud Computing, Collaboration, Business Performance Management (BPM), CFO, finance, Financial Performance Management (FPM), Tagetik, FPM
When applying information technology to drive better business performance, companies and the systems integrators that assist them often underestimate the importance of organizing data management around processes. For example, companies that do not execute their quote-to-cash cycle as an end-to-end process often experience a related set of issues in their sales, marketing, operations, accounting and finance functions that stem from entering the same data into multiple systems. The inability to automate passing of data from one functional group to the next forces people to spend time re-entering data and leads to fragmented and disconnected data stores. The absence of a single authoritative data source also creates conflicts about whose numbers are “right.” Even when the actual figures recorded are identical, discrepancies can crop up because of issues in synchronization and data definition. Lacking an authoritative source, organizations may need to check for and resolve errors and inconsistencies between systems to ensure, for example, that what customers purchased was what they received and were billed for. The negative impact of this lack of automation is multiplied when transactions are complex or involve contracts for recurring services.
Topics: Big Data, Mobile, ERP, Office of Finance, Operational Performance Management (OPM), Operations, Management, close, closing, computing, end-to-end, Analytics, Cloud Computing, Data Management, Business Performance Management (BPM), CRM, Data, finance, Information Applications (IA), Information Management (IM), Sales Performance Management (SPM), Supply Chain Performance Management (SCPM), FPM