Our benchmark research on business analytics finds that just 13 percent of companies overall and 11 percent of finance departments use predictive analytics. I think advanced analytics – especially predictive analytics – should play a larger role in managing organizations. Making it easier to create and consume advanced analytics would help organizations broaden their integration in business planning and execution. This was one of the points that SPSS, an IBM subsidiary that provides analytics, addressed at IBM’s recent analyst summit.
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A main reason why desktop spreadsheets are pervasive in midsize companies (which we define as those with 100 to 1,000 employees) is that these organizations do not have the financial and manpower resources to implement and maintain traditional enterprise business intelligence and performance management systems. To address this gap in the market, several years ago IBM Cognos launched Express, a business intelligence and planning software package designed specifically for midsize companies as well as independent workgroups within larger corporations. It’s a package designed for easy (and relatively inexpensive) implementation and maintenance, often by channel partners.
SAP is planning to acquire e-commerce company Ariba in a transaction worth about US$4.3 billion expected to close in the third quarter of this year. Ariba provides cloud-based collaborative business commerce through a Web-based trading community that enables companies to find, connect and collaborate with a global network of partners. Its Commerce Cloud is a platform that businesses can use to buy and sell goods. Currently, Ariba counts more than 700,000 companies worldwide attached to this network. The purchase follows SAP's acquisition of cloud-based HR software vendor SuccessFactors for $3.4 billion. In the past SAP had been reluctant to make large acquisitions, but these two large purchases and the naming of Lars Dalgaard, former SuccessFactors CEO, to the SAP executive board indicate the strategic imperative SAP puts on quickly gaining a solid cloud presence. The acquisition also complements its 2011 acquisition of Crossgate, an electronic data interchange (EDI) service provider, which enables companies to exchange documents with customers, suppliers, supply chain partners, financial institutions and government entities, streamlining transactions and cutting administrative costs.
I recently attended Vision 2012, IBM’s conference for users of its financial governance, risk management and performance optimization software. From my perspective, two points are particularly worth noting with respect to the finance portion of the program. First, IBM has assembled a financial performance management suite capable of supporting core finance processes as well as more innovative ones. It continues to build out the scope of this suite’s capabilities to enhance ease of use, deepen the capabilities of existing areas and broaden to coverage to complementary or immediately adjacent software categories such as its pending acquisition of sales performance management vendor Varicent Software (covered by my colleague Mark Smith). More specifically, automating management of the extended financial close – that is, all activities from closing the books through filing financial reports with regulatory bodies such as the Securities and Exchange Commission (SEC) in the U.S. or the FSC in the U.K. – is growing increasingly important as regulatory requirements for external financial reporting expand. Companies that have adopted software to manage the extended close are demonstrating the value of using it.
IBM Software recently held a user group conference called Vision 2011 that focused on its Clarity Systems acquisition’s users but also covered broader finance department topics. For me, the highlight of the show was the continued evolution and enrichment of the Clarity FSR external reporting application designed to automate the close-to-report cycle. This process is commonly referred to as “the last mile of finance,” a term coined by a now-defunct company, Movaris, and adopted by Gartner. If you think about it, though, it isn’t “the last mile” for the tens of thousands of companies that don’t publish financial statements and is only one of several important finance department processes that follow the accounting close (such as internal reporting and tax statement preparation).
Vishal Sikka raised an important point about the software business during his remarks at the SAP Global Influencer Summit that my colleague just assessed (See: “SAP Elevates Technology Strategy for Enterprise Software and Solutions“). He contrasted the business strategy of consolidation that other companies are pursuing with his view of SAP’s strategy of innovation. In one sense, this assertion is an attempt to disparage Oracle’s and to some extent IBM’s approach to constructing an IT business portfolio, even though SAP itself has been a consolidator in recent years. (Business Objects and Sybase, for example, are significant components of SAP’s product universe and go-forward strategy.) However, I believe consolidation vs. innovation is an important point to consider as we enter the second decade of the 21st century because it points to the potential for a basic shift in the dynamics of the software business.