Robert Kugel's Analyst Perspectives

SAP Faces Challenges with Customer Assurance and Digital Boardroom

Posted by Ventana Research on Jun 18, 2016 5:39:25 AM

There were two noteworthy themes in SAP CEO Bill McDermott’s keynote at this year’s Sapphire conference. One was customer assurance; that is, placing greater emphasis on making the implementation of even complex business software more predictable and less of an effort. This theme reflects the maturing of the enterprise applications business as it transitions from producing highly customized software to providing configurable, off-the-rack purchases. Implementing ERP will never be simple, as I have noted, but as companies increasingly adopt multitenant software as a service (SaaS), vendors will need to make their implementations as repeatable as possible and enable flexible configuration of parameters and processes that substantially reduce the billable hours required to complete a deployment. “Customer assurance” is an important stake in the ground, but it will be an empty concept unless there is complete overhaul of the entire value chain to take it beyond good intentions. Otherwise, customer assurance will be an ongoing rearguard action to overcome technology-driven challenges and disincentives for improvement. Business applications must be re-engineered to facilitate implementation, substantially reduce the likelihood of implementation errors and facilitate subsequent changes to adapt to changing business conditions. Moreover, software vendors’ partners will need to demonstrate that they can reliably cut a substantial number of billable hours per implementation engagement. This will require partners to restructure their business models. Neither of these changes will be easy to accomplish. To its credit SAP has set a course for increasing the simplicity of using its core ERP and financial management software. Getting there soon would greatly enhance its ability to retain if not gain customers in these mature markets.

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Topics: Business Performance Management (BPM), Customer Performance Management (CPM), Financial Performance Management (FPM), Operational Performance Management (OPM), Sales Performance Management (SPM), Supply Chain Performance Management (SCPM), Uncategorized, Predictive Analytics, SAP

Workday Financial Management Gains Momentum

Posted by Robert Kugel on Dec 2, 2015 11:37:53 PM

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.

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Topics: Analytics, Business Intelligence, Business Performance Management (BPM), CFO, close, closing, Cloud Computing, Collaboration, Controller, dashboard, Data, ERP, finance, Financial Performance Management, Financial Performance Management (FPM), FP&A, FPM, Human Capital, IBM, Intacct, Microsoft, NetSuite, Operational Performance Management (OPM), Oracle, Reconciliation, Reporting, SAP, Tax, Uncategorized, Office of Finance

Evolving to the Next Generation of ERP Systems

Posted by Robert Kugel on Nov 29, 2015 1:19:13 PM

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.

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Topics: Analytics, Business Intelligence, Business Performance Management (BPM), CFO, close, closing, Cloud Computing, Collaboration, Controller, dashboard, Data, ERP, finance, Financial Performance Management, Financial Performance Management (FPM), FP&A, FPM, Human Capital, IBM, Intacct, Microsoft, Mobile Technology, NetSuite, Operational Performance Management (OPM), Oracle, Reconciliation, Reporting, SAP, Social Media, Supply Chain Performance Management (SCPM), Uncategorized, Big Data, Office of Finance

Oracle Must Pivot to Business Applications

Posted by Ventana Research on Nov 5, 2015 10:26:32 PM

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.

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Topics: Analytics, Business Collaboration, Business Intelligence, Business Performance Management (BPM), CFO, close, closing, Cloud Computing, Collaboration, Controller, Customer Performance Management (CPM), dashboard, Data, ERP, finance, Financial Performance Management, Financial Performance Management (FPM), FP&A, FPM, Human Capital, IBM, Intacct, Microsoft, Mobile Technology, NetSuite, Operational Performance Management (OPM), Oracle, Reporting, Sales Performance Management (SPM), SAP, Spreadsheets, Supply Chain Performance Management (SCPM), Tax, Office of Finance, Predictive Analytics

The Challenge of Making ERP Systems More Configurable

Posted by Robert Kugel on Jan 31, 2014 9:43:58 AM

In the wake of the past year’s usual crop of failed ERP implementations, I’ve read a couple of blogs that bemoan the fact that ERP systems are not nearly as user-friendly or intuitive as the mobile apps that everyone loves. I’ve complained about this aspect of ERP, and our research confirms that ERP systems are viewed as cumbersome: Just one in five companies (21%) said it is easy to make changes to ERP systems while one-third (33%) said making changes is difficult or very difficult. Yet as with many such technology topics, addressing the difficulty in working with ERP systems is not as straightforward as one might hope. ERP software vendors must make it easier, less expensive and less risky for customers to adapt the systems they buy to their changing business needs. To do this, vendors must design products to be more configurable. The goal should be that organizations can make changes and add new capabilities to their ERP system in far less time than it takes today and without having to engage outside consultants.

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Topics: Analytics, Business Collaboration, Business Performance Management (BPM), business process, CFO, Cloud Computing, ERP, Financial Performance Management (FPM), FPM, Infor, Intacct, Mobile, Oracle, SAP, Social, Workday

Next-Generation ERP Must Take a Giant Leap

Posted by Robert Kugel on Sep 25, 2013 12:09:01 AM

Enterprise resource planning (ERP) systems emerged in the 1990s. Even though they don’t do much in the way of planning, the systems provide companies a means of centralizing and consolidating transaction data collection (such as purchase orders, inventory movements and depreciation), automating the management of processes, and handling the bookkeeping and financial record keeping for these transactions and related processes. ERP systems are an indispensable piece of IT infrastructure in today’s enterprises. Alas, they also are inherently flawed. But perhaps not for much longer.

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Topics: Analytics, Business Collaboration, Business Performance Management (BPM), CFO, Cloud Computing, ERP, FPM, Infor, Intacct, Mobile, Operational Performance Management (OPM), Oracle, SAP, Social, Social Media, Supply Chain Performance Management (SCPM), Workday

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: bribery, Business Analytics, Business Performance Management (BPM), CFO, compliance, ERP, Financial Performance Management (FPM), FPM, Governance, Governance, Risk & Compliance (GRC), GRC, IBM, Operational Intelligence, Operational Performance Management (OPM), Oracle, Oversight Systems, SAP

SAP’s New Fraud Management Analytical Application

Posted by Robert Kugel on Apr 2, 2013 11:20:35 AM

SAP recently announced its new Fraud Management analytic applications. Currently in “controlled” (limited) release, it’s a promising start for the product and a good example of the type of business process revolution that’s possible when companies can execute complex analytics on big data sets using in-memory and other advanced processing techniques. Over the next several years a wide swath of basic corporate processes will be transformed by the shift to in-memory processing and big data technology, two key foundational elements of my office of finance research agenda. HANA has been a consistent element of SAP’s product strategy and underlies many recent new releases, such as Business Suite on HANA.

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

SAP Announces Business Suite on HANA

Posted by Robert Kugel on Jan 11, 2013 11:31:24 AM

For the past couple of years I’ve been pointing to the importance of in-memory computing to the future of business applications. It’s an integral part of Ventana Research’s business and finance research agenda for 2013, and it’s one of the core technologies that senior executives should have an appreciation for because it can transform all core business processes, especially those that are analytic in nature.

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Topics: Analytics, Business Analytics, Business Collaboration, Business Performance Management (BPM), Business Suite, Cloud Computing, CRM, Customer Performance Management (CPM), ERP, finance, Financial Performance Management, Financial Performance Management (FPM), HANA, In-memory, Mobile, Operational Performance Management (OPM), Predictive Analytics, Real-time, Sales Performance Management (SPM), SAP, Social, Supply Chain Performance Management (SCPM), Workforce Performance Management (WPM)

SAP Takes Business and Finance Mobile Using SAP HANA

Posted by Robert Kugel on Oct 19, 2012 12:20:14 PM

SAP has inaugurated a new series of business applications it calls Enterprise Performance Management (EPM) OnDemand as a cloud-based subscription service. The applications are part of SAP’s EPM version 10 suite, which it introduced last year. It’s a first step in what is likely to be a portfolio of general-purpose, lightweight and relatively low-cost apps designed to be used on mobile devices. Using HANA on the back end, the applications can deliver high performance in accessing masses of business data and deliver actionable information to executives and managers. The three on-demand apps in EPM are for expense management, profit-and-loss (P&L) analysis and capital project management. They also just released its SAP Business Planning and Consolidation that has a mobile version on the Apple iPad that is part of its recently announced EPM UnWired. The move is another indication of SAP’s emphasis on cloud computing, which my colleague Mark Smith covered earlier this year.

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Topics: Analytics, Big Data, Business Analytics, Business Applications, Business Collaboration, Business Performance Management (BPM), Cloud Computing, Customer Performance Management (CPM), expense, Financial Performance Management (FPM), FPM, HANA, Operational Performance Management (OPM), Performance Management, Sales Performance Management (SPM), SAP, Supply Chain Performance Management (SCPM), Workforce Performance Management (WPM), Office of Finance