Robert Kugel's Analyst Perspectives

The financial planning and analysis (FP&A) group is the linchpin of any transformation effort in the Office of Finance. Our recently completed Office of Finance benchmark research was conducted against the backdrop of the idea that finance organizations must play a more strategic role in the management of the modern organization. This transformation envisions a finance department that’s more of a partner to the rest of the company — one that is less focused on “bean counting,” instead directing its resources and energy to providing more insightful analytics, facilitating transactions of value and communicating actionable data analyses that enable managers to make better decisions more consistently. The research uncovered advances in how corporations handle analytics as well as budgeting and planning. Yet the research also indicates that there is much left to be done in most companies.

Topics: Office of Finance, embedded analytics, Analytics, Financial Performance Management, robotic finance, Predictive Planning

Configure, price and quote (CPQ) software has been around for decades. Lately, I’ve been using the term “Dynamic CPQ” to apply to a variant of this software category that explicitly aims to produce a quote that optimizes the trade-off between the profitability of a deal and the probability of closing a sale. Dynamic CPQ software is a hybrid of price and revenue optimization (PRO) software and CPQ, providing companies with the ability to better execute their market share and pricing strategies. It’s designed especially for business-to-business (B2B) relationships that involve sales agents in the pricing process.

Topics: Customer Experience, Office of Finance, Data Preparation, Information Management, Sales Performance Management, Financial Performance Management, Price and Revenue Management, robotic finance, revenue and lease accounting, sales enablement

The traditional office of finance has five main organs: accounting keeps the books; financial planning and analysis (FP&A) analyzes performance and manages the forward-looking activities of the company such as planning, budgeting and forecasting; corporate finance raises outside money; treasury takes care of the cash and bank accounts, and tax. The modern office of finance requires a sixth: Finance IT (FIT).

Topics: Office of Finance, Analytics, Financial Performance Management, Price and Revenue Management, Digital Technology, Operations & Supply Chain, ERP and Continuous Accounting, blockchain, robotic finance, Predictive Planning, Conversational Computing, AI and Machine Learning, revenue and lease accounting, collaborative computing, subscription management

A quarter century ago the “fast, clean close” became a key measure of a finance and accounting department’s effectiveness. Since then there has been general agreement that companies should be able to close their books within a business week. Our research on the accounting close has consistently shown that companies with very similar characteristics (measured in terms of revenue, number of employees, location and industry) vary considerably in the number of days it takes them to complete their accounting cycle. The lack of connection between the structural conditions of a corporation and the time it takes to close the books suggests that the obstacles to a faster close are not innate, but the result of poor process design and execution, insufficient automation of the process as well as choices made by finance executives. One of those choices is deciding — for whatever reason — not to close sooner.

Topics: Office of Finance, Financial Performance Management, ERP and Continuous Accounting, robotic finance

By itself, data isn’t useful for business; the application of analytics is necessary to transform data into actionable information. Data analysis of one sort or another has long been a core competence of finance departments, applied to balance sheets, income statements or cash flow statements. Today, however, Finance must go beyond these basics by expanding the scope of the data being examined to include all financial and operational information that can yield actionable insights. Analysis thus should include, for example, data from the systems that manage sales operations, human resources and field service and that data must be available to all departments and applications that need it.

Topics: Customer Experience, Human Capital Management, Marketing, Voice of the Customer, business intelligence, embedded analytics, Learning Management, Analytics, Collaboration, Data Governance, Data Lake, Data Preparation, Information Management, Internet of Things, Contact Center, Data, Product Information Management, Sales Performance Management, Workforce Management, Financial Performance Management, Price and Revenue Management, Digital Technology, Digital Marketing, Digital Commerce, ERP and Continuous Accounting, blockchain, natural language processing, robotic finance, Predictive Planning, candidate engagement, Intelligent CX, Conversational Computing, Continuous Payroll, AI and Machine Learning, revenue and lease accounting, collaborative computing, mobile computing, subscription management, agent management, extended reality

“Platform,” as used in the world of technology, originally referred to an operating system on which one could construct software applications. More recently, its usage has been expanded to apply to two types of business models. One enables third parties to create products and services that are complementary to a company’s core technology. For instance, both Apple and Salesforce have attracted a wide array of third-party software developers whose offerings greatly increase the value of each software vendor’s platform to its customers. The second, such as Amazon’s marketplace, Facebook, Twitter and Uber, facilitates transactions and interactions. This latter type adds value by reducing transaction frictions and increasing efficiency and, in attracting large numbers of people to the platform, enables innovative business offerings to take advantage of Metcalf’s law — the “network effect.”

Topics: Human Capital Management, Marketing, Office of Finance, Voice of the Customer, Continuous Planning, Information Management, Internet of Things, Workforce Management, Financial Performance Management, Price and Revenue Management, Digital Marketing, Digital Commerce, Operations & Supply Chain, Enterprise Resource Planning, ERP and Continuous Accounting, robotic finance, Predictive Planning, revenue and lease accounting, collaborative computing, continuous supply chain

Business planning in most companies is a relic, a process hemmed in by obsolete conceptions of what it can be. “Business planning” encompasses all of the forward-looking activities in which companies routinely engage, including marketing, sales, customer, supply chain and workforce planning as well as budgeting. In our view companies today can fundamentally change how they plan thanks to the maturation of information technology. Current systems can support better business planning as well as traditional budgeting. Dedicated software can increase the business value of the time spent planning and budgeting by enabling all parts of the business to share their plans. It can substantially cut the time spent creating and updating plans. And it can allow senior executives to see a consolidated view of the plan and quickly explore alternatives and contingencies.

Topics: Office of Finance, Financial Performance Management, Price and Revenue Management, ERP and Continuous Accounting, robotic finance, Predictive Planning, revenue and lease accounting

From my perspective there were two significant takeaways from this year’s SuiteWorld. The first is that, almost two years on from the announced acquisition of NetSuite by Oracle, the combination has achieved its immediate objectives in growing NetSuite’s business, especially in Europe and Asia, and accelerating product development efforts. The second takeaway is that, at least for now, the unit appears to continue to operate as if the combination were a private equity investment by a public company.

Topics: Office of Finance, Financial Performance Management, Enterprise Resource Planning, ERP and Continuous Accounting, robotic finance, Predictive Planning, revenue and lease accounting

Prophix is a financial performance management (FPM) suite from Prophix Software offering statutory financial consolidation, planning, budgeting and reporting capabilities designed expressly for midsize companies and divisions of larger corporations. The chief financial officer of a midsize company faces a different set of challenges than those in larger corporations or small businesses. A midsize company typically has grown to the point where it must have capabilities similar to those of a large corporation but lacks the staff or financial resources that larger companies can afford. And when experiencing rapid growth, midsize companies typically will make investments in information technology that will allow them to scale without having to add administrative or support headcount.

Topics: Office of Finance, Financial Performance Management, Predictive Planning

IBM’s THINK conference, just held this February in San Francisco, is IBM's annual user conference. THINK is designed to showcase upcoming product updates and releases from IBM, along with provide best practices on a wide range of topics. While many technologies were on display, there is one topic in particular I wanted to cover this year: Blockchain.

Topics: Office of Finance, IBM, Financial Performance Management, FPM, Digital Technology, blockchain