Robert Kugel's Analyst Perspectives

Like many other industry observers I’ve heard overblown claims for information technology for decades. However, I’ve also observed that – eventually – reality catches up with vision. Finance and accounting departments are particularly resistant to change, yet because almost no corporations use adding machines or typewriters any more, it’s clear that transformative change can happen. Nonetheless, because users of business computing systems are inundated with “it’s better than ever” promotions by vendors, journalists and industry analysts, may have grown jaded and disbelieving. In the case of ERP systems that help run many organizations, that is too bad because we are finally at the point of a fundamental change in this business-critical software category.

Topics: Social Media, Mobile Technology, Office of Finance, Operational Performance Management (OPM), Human Capital, Business Analytics, Business Collaboration, Business Intelligence, Cloud Computing, Business Performance Management (BPM), Customer Performance Management (CPM), Financial Performance Management (FPM), Supply Chain Performance Management (SCPM)

Ventana Research coined the term “enterprise spreadsheet” in 2004 to describe a variety of software applications that add a desktop spreadsheet’s user interface (usually that of Microsoft Excel) to components that address the issues that arise when desktop spreadsheets are used in repetitive, collaborative enterprise processes. Enterprise spreadsheets are designed to provide the best of both worlds in that they offer the ease of use and flexibility of desktop spreadsheets while overcoming their defects – chiefly inability to maintain data integrity, lack of referential integrity and dimensionality, absence of workflow and process controls, limited security and access controls as well as poor auditability. All of these issues can cause serious problems for business use, which I’ll discuss below.

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

Topics: Office of Finance, Operational Performance Management (OPM), Uncategorized, Business Performance Management (BPM), Customer Performance Management (CPM), Financial Performance Management (FPM), Sales Performance Management (SPM), Supply Chain Performance Management (SCPM), blockchain, distributed ledger, DLT, ERP, SCM, sup

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.

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

Infor recently held its annual Innovation Summit at its New York City headquarters. The company has shown leadership and creativity in business applications on two fronts: focusing its development efforts on enhancing the user experience and collaboration and building an application architecture that will deliver a rich set of functionality for ERP, financial management, CRM and HRMS and business analytics in a multitenant cloud environment. All of these advances were necessary to remake a disparate portfolio of aging software into an up-to-date set of applications. The Innovation Summits have been useful indicators of Infor’s future product and market direction. And while there has been a lag between what’s demonstrated and what’s actually available in the software, it’s not clear that this really matters. Any negative impact is limited by the slow replacement cycle for ERP (our research shows that on average companies replace their systems every 6.4 years – longer than they used to take) and conservative attitudes when it comes to core enterprise systems. Innovation doesn’t seem to be a big factor yet in selling business software to mainstream buyers, but it is likely to become more important within a few years. Changes in buyer preferences will come about as technology puts more of the design and operation of these systems in the hands of business users rather than their IT departments and outside consultants. Increasing the configurability and reducing the need for customization will cut costs, reduce the time to value in purchasing replacement applications and increase the flexibility of these notoriously inflexible systems.

Topics: Mobile Technology, Operational Performance Management (OPM), accounting, analytics, ERP, EAM, CRM, HCM, innovat, Human Capital, Business Analytics, Cloud Computing, Uncategorized, Business Performance Management (BPM), Customer Performance Management (CPM), Financial Performance Management (FPM), Sales Performance Management (SPM), Supply Chain Performance Management (SCPM)

Using information technology to make data useful is as old as the Information Age. The difference today is that the volume and variety of  available data has grown enormously. Big data gets almost all of the attention, but there’s also cryptic data. Both are difficult to harness using basic tools and require new technology to help organizations glean actionable information from the large and chaotic mass of data. “Big data” refers to extremely large data sets that may be analyzed computationally to reveal patterns, trends and associations, especially those related to human behavior and interaction. The challenges in dealing with big data include having the computational power that can scale to the processing requirements for the volumes involved; analytical tools to work with the large data sets; and governance necessary to manage the large data sets to ensure that the results of the analysis are accurate and meaningful. But that’s not all organizations have to deal with now. I’ve coined the term “cryptic data” to focus on a different, less well known sort of data challenge that many companies and individuals face.

Topics: Big Data, Data Science, Planning, Predictive Analytics, Social Media, FP&A, Office of Finance, Operational Performance Management (OPM), Budgeting, Connotate, cryptic, equity research, Finance Analytics, Human Capital, Kofax, Statistics, Analytics, Business Analytics, Business Intelligence, Customer Performance Management (CPM), Data, Datawatch, Financial Performance Management (FPM), Kapow, Sales Performance Management (SPM), Supply Chain Performance Management (SCPM), Strata+Hadoop

Supply and demand chain planning and execution have grown in importance over the past decade as companies have recognized that software can meaningfully enhance their competitiveness and improve their financial performance. Sales and operations planning (S&OP) is an integrated business management process first developed in the 1980s aimed at achieving better alignment and synchronization between the supply chain, production and sales functions. A properly implemented S&OP process routinely reviews customer demand and supply resources and “replans” quantitatively across an agreed rolling horizon. The replanning process focuses on changes from the previously agreed sales and operations plan; while it helps the management team understand how the company achieved its current level of performance, its primary focus is on future actions and anticipated results. Adoption of S&OP has increased as software to support the process has become more powerful and affordable and as a growing list of companies demonstrated its value in producing meaningfully improved business results. Even without adopting a full-scale S&OP management approach, companies can benefit from better coordination and collaboration between their supply and demand functions. Software plays an important role here, too, in facilitating this coordination and collaboration.

Topics: Planning, SaaS, Sales, Forecast, Mobile Technology, Operational Performance Management (OPM), Human Capital, Supply Chain Planning, Analytics, Business Analytics, Business Collaboration, Cloud Computing, Business Performance Management (BPM), Financial Performance Management (FPM), Sales Performance Management (SPM), Sales Planning, Supply Chain, Supply Chain Performance Management (SCPM), Demand Chain, Integrated Business Planning, SCM Demand Planning, S&OP

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.

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

Tidemark Systems offers a suite of business planning applications that enable corporations to plan more effectively. The software facilitates rapid creation and frequent updating of integrated company plans by making it easy for individual business functions to create their own plans while allowing headquarters to connect them to create a unified view. I coined the term “integrated business planning” a decade ago to highlight the potential for technology to substantially improve the effectiveness of planning and budgeting in corporations, and it remains true that integrating business planning can produce superior results. Companies that maintain direct links between functional or departmental plans more often have a planning process that works well than others. Our next-generation business planning benchmark research shows that two-thirds (66%) of those that maintain such links have a planning process that works well or very well, compared to 40 percent that copy information from individual plans into an overall plan and just 25 percent in which plans have little or no connection.

Topics: Planning, Predictive Analytics, Customer Experience, Marketing Planning, Reporting, Budgeting, Human Capital, Analytics, Business Analytics, Business Collaboration, Business Mobility, Cloud Computing, Governance, Risk & Compliance (GRC), Business Planning, Customer Performance Management (CPM), Financial Performance Management (FPM), Sales Performance Management (SPM), Supply Chain Performance Management (SCPM), Tidemark, Workforce Performance Management (WPM), Demand Planning, Integrated Business Planning, Project Planning

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.

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