Robert Kugel's Analyst Perspectives

IBM Watson and Cognitive Compliance

Posted by Robert Kugel on Jan 2, 2017 10:30:56 PM

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.

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Topics: GRC, Machine Learning, Dodd-Frank, Risk Analytics, compliance, finance, risk management, Financial Services, Watson, IBM Regulatory Compliance Analytics

The Office of Finance in 2016

Posted by Robert Kugel on Feb 14, 2016 11:40:09 AM

The imperative to transform the finance department to function in a more strategic, forward-looking and action-oriented fashion has been a consistent theme of practitioners, consultants and business journalists for two decades. In all that time, however, most finance and accounting departments have not changed much. In our benchmark research on the Office of Finance, nine out of 10 participants said that it’s important or very important for finance departments totake a strategic role in running their company. The research also shows a significant gap between this objective and how well most departments perform. A large majority (83%) said they perform the core finance functions of accounting, fiscal control, transaction management, financial reporting and internal auditing, but only 41 percent said they play an active role in their company’s management. Even fewer (25%) have implemented a high degree of automation in their core finance functions and actively promote process and analytical excellence.

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Topics: Big Data, Planning, Predictive Analytics, Social Media, forecasting, Governance, GRC, Mobile Technology, Budgeting, close, Continuous Accounting, Continuous Planning, end-to-end, Human Capital, quote-to-cash, Tax, tax data warehouse, Analytics, Business Analytics, Business Collaboration, CIO, Cloud Computing, In-memory, Uncategorized, Accounting, Business Performance Management (BPM), CFO, CPQ, Financial Performance Management (FPM), Risk, risk management, CEO, Financial Performance Management, FPM

Research Agenda: The Office of Finance in 2015

Posted by Robert Kugel on Feb 3, 2015 9:37:28 PM

Last year Ventana Research released our Office of Finance benchmark research. One of the objectives of the project was to assess organizations’ progress in achieving “finance transformation.” This term denotes shifting the focus of CFOs and finance departments from transaction processing toward more strategic, higher-value functions. In the research nine out of 10 participants said that it’s important or very important for the department to take a more strategic role. This objective is both longstanding and elusive. It has been part of the conversation in financial management circles since the 1990s and has been a primary focus of my research practice since its inception 12 years ago. Yet our recent research shows that most finance organizations struggle with the basics and few companies are even close to achieving this desired transformation.

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Topics: Big Data, Planning, Predictive Analytics, forecasting, Governance, GRC, Budgeting, close, end-to-end, quote-to-cash, Tax, Tax-Datawarehouse, Analytics, CIO, In-memory, Accounting, Business Performance Management (BPM), CFO, CPQ, Financial Performance Management (FPM), Risk, risk management, CEO, Financial Performance Management, FPM

Finance Analytics Requires Data Quality

Posted by Robert Kugel on Apr 22, 2014 9:48:59 AM

Our research consistently finds that data issues are a root cause of many problems encountered by modern corporations. One of the main causes of bad data is a lack of data stewardship – too often, nobody is responsible for taking care of data. Fixing inaccurate data is tedious, but creating IT environments that build quality into data is far from glamorous, so these sorts of projects are rarely demanded and funded. The magnitude of the problem grows with the company: Big companies have more data and bigger issues with it than midsize ones. But companies of all sizes ignore this at their peril: Data quality, which includes accuracy, timeliness, relevance and consistency, has a profound impact on the quality of work done, especially in analytics where the value of even brilliantly conceived models is degraded when the data that drives that model is inaccurate, inconsistent or not timely. That’s a key finding of our finance analytics benchmark research.

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Topics: Big Data, Planning, Predictive Analytics, forecasting, Governance, Operational Performance Management (OPM), Budgeting, close, Finance Analytics, Tax, tax data warehouse, Analytics, Business Analytics, CIO, Governance, Risk & Compliance (GRC), In-memory, Accounting, Business Intelligence (BI), Business Performance Management (BPM), CFO, Financial Performance Management (FPM), Information Applications (IA), Risk, risk management, Workforce Performance Management (WPM), CEO, Financial Performance Management, FPM

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, Operational Performance Management (OPM), Bank, Chief Risk Officer, CRO, ERM, OpenPages, regulation, Business Analytics, Business Collaboration, Cloud Computing, Data Governance, IBM, Business Performance Management (BPM), compliance, Data, Financial Performance Management (FPM), Risk, risk management, financial services, FPM

Finance Departments Still Lag in Using Advanced Analytics

Posted by Robert Kugel on Apr 11, 2014 9:54:39 AM

Business computing has undergone a quiet revolution over the past two decades. As a result of having added, one-by-one, applications that automate all sorts of business processes, organizations now collect data from a wider and deeper array of sources than ever before. Advances in the tools for analyzing and reporting the data from such systems have made it possible to assess financial performance, process quality, operational status, risk and even governance and compliance in every aspect of a business. Against this background, however, our recently released benchmark research finds that finance organizations are slow to make use of the broader range of data and apply advanced analytics to it.

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Topics: Big Data, Planning, Predictive Analytics, forecasting, Governance, Budgeting, close, Finance Analytics, Tax, tax data warehouse, Analytics, Business Analytics, CIO, Governance, Risk & Compliance (GRC), In-memory, Accounting, Business Intelligence (BI), Business Performance Management (BPM), CFO, Financial Performance Management (FPM), Information Management (IM), Risk, risk management, CEO, Financial Performance Management, FPM

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, forecasting, Governance, GRC, Budgeting, close, Tax, tax data warehouse, Analytics, Business Analytics, Business Collaboration, CIO, Cloud Computing, Governance, Risk & Compliance (GRC), In-memory, Accounting, Business Performance Management (BPM), CFO, Financial Performance Management (FPM), Risk, risk management, 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, Operational Performance Management (OPM), Bank, Chief Risk Officer, CRO, ERM, OpenPages, regulation, 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, risk management, Supply Chain Performance Management (SCPM), Algorithmics, financial services, FPM

Getting to the Next Generation of Finance Analytics

Posted by Robert Kugel on Mar 19, 2013 11:12:55 AM

One of the most important IT trends over the past decade has been the proliferation of ever wider and deeper sets of information sources that businesses use to collect, track and analyze data. While structured numerical data remains the most common category, organizations are also learning to exploit semistructured data (text, for example) as well as more complex data types such as voice and image files. They use these analytics increasingly in every aspect of their business – to assess financial performance, process quality, operational status, risk and even governance and compliance. Properly applied, business analytics can deliver significant value by deepening insight, supporting better decision-making and providing alerts when situations require attention from managers or executives.

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Topics: Planning, Predictive Analytics, Customer, Operational Performance Management (OPM), ABC, Budgeting, close, closing, Finance Analytics, plan, PRO, strategy, Analytics, Business Analytics, Business Collaboration, Cloud Computing, Accounting, Business Performance Management (BPM), CFO, Financial Performance Management (FPM), pricing, Risk, risk management, costing, FPM, price optimizaiton, Profitability

The Spreadsheet and the Whale

Posted by Robert Kugel on Jan 29, 2013 9:06:31 AM

Banking giant JP Morgan raised eyebrows in 2012 when it revealed that it had lost a substantial amount of money because of poorly conceived trades it had made for its own account. The losses raised questions about the adequacy of its internal controls, and broader questions about the need for regulations to reduce systemic risk to the banking system. At the heart of the matter were the transactions made by “the London Whale,” the name given to a JP Morgan’s trading operation in the City by its counterparties because of the outsized bets it was making. Until that point, JP Morgan’s Central Investment Office had been profitable and apparently well controlled. In the wake of a discovery of the large losses racked up by “the Whale,” JP Morgan launched an internal investigation into how it happened, and released the findings of the task force established to review the losses and their causes [PDF document].

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Topics: GRC, Operational Performance Management (OPM), errors, multidimensional spreadsheet, server, Business Analytics, Business Collaboration, Business Intelligence (BI), Business Performance Management (BPM), Data, Financial Performance Management (FPM), Information Management (IM), risk management, Sales Performance Management (SPM), controls, spreadsheet, trading