Robert Kugel's Analyst Perspectives

Requirements for Becoming a Strategic Chief Risk Officer

Posted by Robert Kugel on Apr 17, 2014 9:55:14 AM

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.

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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

Boardwalktech Addresses Spreadsheet Woes in Business

Posted by Robert Kugel on Jan 15, 2014 10:16:28 AM

Our benchmark research on enterprise spreadsheets explores the pitfalls that await companies that use desktop spreadsheets such as Microsoft Excel in repetitive, collaborative enterprise-wide processes. Because people are so familiar with Excel and therefore are able to quickly transform their finance or business expertise into a workable spreadsheet for modeling, analysis and reporting, desktop spreadsheets became the default choice. Individuals and organizations resist giving up their spreadsheets, so software vendors have come up with adaptations that embrace and extend their use. I’ve long advocated finding user-friendly spreadsheet alternatives.

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Topics: GRC, Office of Finance, Operational Performance Management (OPM), Reporting, enterprise spreadsheet, Analytics, Business Analytics, Business Collaboration, Cloud Computing, Governance, Risk & Compliance (GRC), Business Performance Management (BPM), Customer Performance Management (CPM), Financial Performance Management (FPM), Information Applications (IA), Information Management (IM), Risk, Sales Performance Management (SPM), Supply Chain Performance Management (SCPM), Workforce Performance Management (WPM), benchmark, Financial Performance Management

Opportunity for the Office of Finance in 2014

Posted by Robert Kugel on Jan 13, 2014 8:22:59 AM

Senior finance executives and finance organizations that want to improve their performance must recognize that technology is a key tool for doing high-quality work. To test this premise, imagine how smoothly your company would operate if all of its finance and administrative software and hardware were 25 years old. In almost all cases the company wouldn’t be able to compete at all or would be at a substantial disadvantage. Having the latest technology isn’t always necessary, but even though software doesn’t wear out in a physical sense, it has a useful life span, at the end of which it needs replacement. As an example, late in 2013 a major U.K. bank experienced two system-wide failures in rapid succession caused by its decades-old mainframe systems; these breakdowns followed a similarly costly failure in 2012. For years the cost and risk of replacing these legacy systems kept management from taking the plunge. What they didn’t consider were the cost and risk associated with keeping the existing systems going. Our new research agenda for the Office of Finance attempts to find a balance between the leading edge and the mainstream that will help businesses find practical solutions.

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Topics: Big Data, Planning, Predictive Analytics, Governance, GRC, Office of Finance, Budgeting, close, Tax, Analytics, Business Analytics, Business Collaboration, CIO, Cloud Computing, Governance, Risk & Compliance (GRC), In-memory, Business Performance Management (BPM), CFO, Financial Performance Management (FPM), Risk, CEO, Financial Performance Management, FPM

IBM Integrates Risk Management for Financial Services

Posted by Robert Kugel on Dec 18, 2013 9:47:56 AM

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.

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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

Finance Can Get a Big Advantage from Big Data

Posted by Robert Kugel on Nov 16, 2013 8:22:39 AM

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.

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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

Vertex Enterprise Helps Tax Departments Increase Effectiveness

Posted by Robert Kugel on Sep 19, 2013 8:31:52 AM

Technology for the Office of Finance can have transformative power. Although progress has been slow at times, today’s finance organizations are fundamentally different from those of 50 years ago. For one thing, they require far fewer resources (chiefly people) to perform basic accounting, treasury and corporate finance tasks. In addition, public corporations report results sooner – sometimes weeks sooner – than they could in the mid-20th century. And finance departments are able to harness substantially more data and a wider array of analytics to promote insight and support more agile decision-making.

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Topics: ERP, GRC, Office of Finance, audit, finance transformation, Tax, Analytics, Business Analytics, Business Intelligence, Business Performance Management (BPM), CFO, Financial Performance Management (FPM), Vertex, FPM, Innovation Awards

Transforming Lease Accounting with Better Software

Posted by Robert Kugel on Aug 22, 2013 1:22:42 PM

Because of its impact on the Office of Finance, I’ve written in the past about the proposed timeline and IT implications of the convergence of U.S. Generally Accepted Accounting Principles (U.S. GAAP) and the International Financial Reporting Standards (IFRS). While the bottom-line differences between U.S. GAAP and IFRS are likely to be minimal for most businesses, some aspects of the convergence promise to be significant and problematic. One important change is how companies account for leases. The process of arriving at these rules has been contentious because it represents a major change that will entail substantial process and accounting challenges for U.S. GAAP companies. These changes are likely to go into effect as part of U.S. GAAP well ahead of any adoption of IFRS in the U.S. IT systems also will be affected, but software could smooth the transition if vendors provide a workable product.

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Topics: GRC, Office of Finance, control, error, IFRS, Governance, Risk & Compliance (GRC), Business Performance Management (BPM), CFO, Financial Performance Management (FPM), Financial Performance Management, GAAP

Software Aims To Prevent Foreign Corrupt Practices

Posted by Robert Kugel on May 8, 2013 10:51:18 PM

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.

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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

Infor Demonstrates Steady Stream of Advances to Customers

Posted by Robert Kugel on Apr 26, 2013 10:58:55 AM

At this year’s Inforum user group conference, Infor representatives showed the progress the organization has made since last year in transforming itself from a ragbag of mostly small, often obsolete software companies to a competitive vendor of a modern enterprise management software suite. Infor was created by private equity investors employing a “rollup” strategy, aimed at combining smaller companies within an industry to form a single larger company that could achieve economies of scale and greater market presence. Others have tried this in the software industry in the past and encountered difficulty in making it work for two primary reasons. One is the technical challenge of achieving economies of scale in enterprise applications by turning a set of similar but separately developed software pieces into a single offering. Computer Associates achieved economies of scale through acquisition in the 1990s in the IT infrastructure software segment. But it did this largely by forcing customers of the various acquired companies to migrate to its single offering in the specific category. This is not a practical approach for business and finance enterprise applications because customers are willing to go off maintenance and eventually look for another vendor. The second difficulty is that newer or larger competitors can focus on innovation and overtake the rollup company while its attention and resources are focused on stitching the pieces together.

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Topics: Big Data, Mobile, Planning, Social Media, GRC, Office of Finance, Operational Performance Management (OPM), Budgeting, closing, Analytics, Business Analytics, Business Collaboration, Cloud Computing, Collaboration, Business Performance Management (BPM), CFO, Customer Performance Management (CPM), Financial Performance Management (FPM), Infor, Information Management (IM), IT Performance Management (ITPM), Risk, Sales Performance Management (SPM), Supply Chain Performance Management (SCPM), Workforce Performance Management (WPM), FPM, SEC

How New Information Technology Will Transform Auditing

Posted by Robert Kugel on Apr 4, 2013 11:04:58 AM

A recent news release by Robert Half, a staffing company that specializes in accounting and finance personnel, covered what it sees as the most important attributes required for auditors in the 21st century. “7 Attributes of Highly Effective Internal Auditors” covers the people dimension of the profession and focuses on the non-technical requirements of the role, including relationship-building, teamwork, and diversity. No doubt these skills are a must for just about anybody working in a modern (Western) corporation. For me, though, the most important quality on the list is at the bottom: continuous learning. That’s because the role of internal and external auditors will be transformed radically by big data, in-memory processing and other advances in information technology that will make enterprise automated fraud discovery and mitigation a reality before the end of this decade.

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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