Robert Kugel's Analyst Perspectives

I recently attended BlackLine’s annual user conference. The company aims to automate time-consuming repetitive tasks and substantially reduce the amount of detail that individuals must handle in the department. The phrase “the devil is in the details” certainly applies to accounting, especially managing the details in the close-to-report phase of the accounting cycle, which is where BlackLine plays its role. This phase spans from all the pre-close activities to the publication of the financial statements. The non-practitioner is likely unaware of the hair-curling amount of essential detail that the finance and accounting organization must handle in the close-to-report. Beyond its toll on efficiency, the time and attention involved in performing this work manually bedevils departments’ attempts to become a more strategic partner to the rest of the business.

Topics: automation, close, closing, Consolidation, control, effectiveness, Reconciliation, CFO, compliance, Data, controller, Financial Performance Management, FPM, Sarbanes Oxley, Accounting, reconcile

Ventana Research awarded our Governance, Risk and Compliance (GRC) Business Innovation Award for 2016 to IBM for IBM Regulatory Compliance Analytics, powered by Watson (IRCA). This application of cognitive analytics is designed to streamline the identification of potential regulatory requirements and suggest methods for compliance. In so doing the cloud-based system can cut the time and cost of compliance while creating an effective means of ongoing management and control of compliance processes.

Topics: GRC, Machine Learning, Office of Finance, Dodd-Frank, Risk Analytics, compliance, finance, Financial Services, Watson, IBM Regulatory Compliance Analytics

Tagetik provides financial performance management software. One particularly useful aspect of its suite is the Collaborative Disclosure Management (CDM). CDM addresses an important need in finance departments, which routinely generate highly formatted documents that combine words and numbers. Often these documents are assembled by contributors outside of the finance department; human resources, facilities, legal and corporate groups are the most common. The data used in these reports almost always come from multiple sources – not just enterprise systems such as ERP and financial consolidation software but also individual spreadsheets and databases that collect and store nonfinancial data (such as information about leased facilities, executive compensation, fixed assets, acquisitions and corporate actions). Until recently, these reports were almost always cobbled together manually – a painstaking process made even more time-consuming by the need to double-check the documents for accuracy and consistency. The adoption of a more automated approach was driven by the requirement imposed several years ago by United States Securities and Exchange Commission (SEC) that companies tag their required periodic disclosure filings using eXtensible Business Reporting Language (XBRL), which I have written about. This mandate created a tipping point in the workload, making the manual approach infeasible for a large number of companies and motivating them to adopt tools to automate the process. Although disclosure filings were the initial impetus to acquire collaborative disclosure management software, companies have found it useful for generating a range of formatted periodic reports that combine text and data, including board books (internal documents for senior executives and members of the board of directors), highly formatted periodic internal reports and filings with nonfinancial regulators or lien holders.

Topics: Big Data, Mobile, ERP, Human Capital Management, Modeling, Office of Finance, Reporting, Budgeting, close, closing, Consolidation, Controller, Finance Financial Applications Financial Close, IFRS, XBRL, Analytics, Business Analytics, Business Intelligence, Governance, Risk & Compliance (GRC), Business Performance Management (BPM), CFO, compliance, Data, Financial Performance Management (FPM), benchmark, Financial Performance Management, financial reporting, FPM, GAAP, Integrated Business Planning, Profitability, SEC Software

The proliferation of chief “something” officer (CxO) titles over the past decades recognizes that there’s value in having a single individual focused on a specific critical problem. A CxO position can be strategic or it can be the ultimate middle management role, with far more responsibilities than authority. Many of those handed such a title find that it’s the latter. This may be because the organization that created the title is unwilling to invest the necessary powers and portfolio of responsibilities to make it strategic – a case of institutional inertia. Or it may be that the individual given the CxO title doesn’t have the skills or temperament to be a “chief” in a strategic sense.

Topics: GRC, Office of Finance, Operational Performance Management (OPM), Chief Risk Officer, CRO, ERM, OpenPages, Business Analytics, Business Collaboration, Cloud Computing, Data Governance, IBM, Business Performance Management (BPM), compliance, Data, Financial Performance Management (FPM), Risk, Financial Services, FPM

Integrated risk management (IRM) was a major theme at IBM’s recent Smarter Risk Management analyst summit in London. In the market context, IBM sees this topic as a means to differentiate its product and messaging from those of its competitors. IRM includes cloud-based offerings in operational risk analytics, IT risk analytics and financial crimes management designed for financial institutions and draws on component elements of software that IBM acquired over the past five years, notably from Algorithmics for risk-aware business decisions, Open Pages for compliance management, SPSS for sophisticated analytics, Cognos for reports, dashboards and scorecards, and Tivoli for managing all of this in a Web environment. Putting its software in the cloud enables IBM to streamline integration and maintenance, offer more flexible deployment and consumption options and potentially lower the total cost of ownership.

Topics: GRC, Office of Finance, Operational Performance Management (OPM), Chief Risk Officer, CRO, ERM, OpenPages, Business Analytics, Business Collaboration, Cloud Computing, Data Governance, Governance, Risk & Compliance (GRC), IBM, Business Performance Management (BPM), compliance, Customer Performance Management (CPM), Data, Information Applications (IA), Information Management (IM), IT Performance Management (ITPM), Risk, Supply Chain Performance Management (SCPM), Financial Services, FPM

All the hubbub around big data and analytics has many senior finance executives wondering what the big deal is and what they should do about it. It can be especially confusing because much of what’s covered and discussed on this topic is geared toward technologists and others working outside of Finance, in areas such as sales, marketing and risk management. But finance executives need to position their organization to harness this technology to support the strategic goals of their company. To do so, they must have clarity as to what big data can do, what they want it to do, and what skills and tools they need to meet their objectives.

Topics: Big Data, Performance Management, Predictive Analytics, Customer Experience, Fraud, Governance, GRC, Office of Finance, audit, Controller, Analytics, Business Analytics, Cloud Computing, Governance, Risk & Compliance (GRC), Operational Intelligence, Business Performance Management (BPM), CFO, compliance, finance, Financial Performance Management (FPM), Information Management (IM), Risk, Financial Performance Management, financial risk management

Informatica and Exterro have announced a partnership in the market for discovery of electronic data and documents (known as e-discovery). Exterro has made its reputation in e-discovery workflow and legal holds management while Informatica is a leader in data integration that our Value Index finds as the top and Hot rated provider. The partnership is designed to provide users of Exterro’s Fusion E-Discovery software with a single point of control for organizing and managing legal and preservation holds (that is, preventing electronic data from alteration or deletion) of unstructured and structured data that are held in Informatica’s Data Archive. Informatica specializes in the efficient management of information assets, which our benchmark research shows is not easy for most organizations to do because they have data spread across multiple applications and systems: Two-thirds of organizations said that this makes it difficult to manage information. By consolidating in a single repository the storage of information that is likely to be the subject of discovery, companies can simplify and cut the cost of the search process as well as reduce risk. Orchestrating legal and preservation holds can be complex since multiple people or groups within a company may be legally involved with the same data over an extended period of time. Moreover, it’s important to ensure that once the holds are no longer needed, all data that can be eliminated is eliminated.

Topics: Office of Finance, Operational Performance Management (OPM), eDiscovery, Exterro, Data Governance, Data Management, Governance, Risk & Compliance (GRC), Informatica, Business Performance Management (BPM), compliance, Data, Financial Performance Management (FPM), Information, Information Applications (IA), Information Management (IM), Risk, Sales Performance Management (SPM), Workforce Performance Management (WPM)

Oracle continues to enrich the capabilities of its Hyperion suite of applications that support the finance function, but I wonder if that will be enough to sustain its market share and new generation of expectations. At the recent Oracle OpenWorld these new features were on display, and spokespeople described how the company will be transitioning its software to cloud deployment. Our 2013 Financial Performance Management Value (FPM) Index rates Oracle Hyperion a Warm vendor in my analysis, ranking eighth out of nine vendors. Our Value Index is informed by more than a decade of analysis of technology suppliers and their products and how well they satisfy specific business and IT needs. We perform a detailed evaluation of product functionality and suitability-to-task as well as the effectiveness of vendor support for the buying process and customer assurance. Our assessment reflects two disparate sets of factors. On one hand, the Hyperion FPM suite offers a broad set of software that automates, streamlines and supports a range of finance department functions. It includes sophisticated analytical applications. Used to full effect, Hyperion can eliminate many manual steps and speed execution of routine work. It also can enhance accuracy, ensure tasks are completed on a timely basis, foster coordination between Finance and the rest of the organization and generate insights into corporate performance. For this, the software gets high marks.

Topics: Big Data, Mobile, Planning, Social Media, ERP, Human Capital Management, Modeling, Office of Finance, Reporting, Budgeting, close, closing, Consolidation, Controller, driver-based, Finance Financial Applications Financial Close, Hyperion, IFRS, Tax, XBRL, Analytics, Business Analytics, Business Intelligence, CIO, Cloud Computing, In-memory, Oracle, Business Performance Management (BPM), CFO, compliance, Data, Financial Performance Management (FPM), benchmark, Financial Performance Management, financial reporting, FPM, GAAP, Integrated Business Planning, Price Optimization, Profitability, SEC Software

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.

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

Topics: Fraud, Governance, GRC, Office of Finance, audit, Analytics, Business Analytics, Governance, Risk & Compliance (GRC), Business Performance Management (BPM), compliance, Financial Performance Management (FPM), Infor, Risk, HANA, Oversight Systems