Outsourcing with Integrity

Outsourcing developed a bad reputation straight out of the gate. Few technology process shifts can boast such embarrassing and costly early results as outsourcing did. Companies such as Dell (that outsourced call center operations), experienced such radical declines in customer satisfaction that they were forced to drop their outsource projects (1). Early efforts at outsourcing development operations often resulted in development lag times, missed requirements and ongoing quality issues (2).

The costly lessons of early outsourcing projects have given companies today the knowledge needed to create successful outsource initiatives. As companies work to maintain a balance between streamlined operations and cost-effectiveness, many are choosing to re-evaluate the opportunities offered by outsourcing. According to Gartner Research, "The global outsourcing market continues to grow at a steady pace, with a forecast growth rate of 8.1 percent in 2008. But, healthy growth rates for outsourcing do not necessarily mean that user organizations are without challenges."

Not all outsourcing projects are the same. Project requirements, processes, deliverables, and structures vary greatly with each type of outsourcing project. Whether looking to outsource call center operations, manufacturing, software development, IT services or other operations, there are common success factors that span all outsourcing projects.

Find the right place and people: While one location may offer considerably lower production costs, the talent-base of the workforce must also match your needs. “You must understand the offshore location landscape," states Gartner research vice-president Ian Marriott. Gartner’s Top 30 Offshore Locations for 2008 provides a list of the top countries around the world for IT outsourcing, based upon criteria such as talent availability, environmental stability and cost.

Establish consistent processes: Adherence to corporate processes and procedures by all business teams (whether internal or outsourced), is a fundamental requirement to ensure consistent, quality project results, corporate governance and compliance. This is a difficult goal to maintain when working with external companies across geographies. By automating business and financial processes, companies can ensure consistent, repeatable data movement with integrated control steps. Detailed audit trails from content management, change control, and financial systems provide traceability.

Ensure visibility: Corporate teams must have understanding of outsource project activities and their results at all times. Up-to-date, accurate financial and lifecycle data provide critical insight needed for decision-makers at all project levels. Continuous effort needs to be put to tracking progress and making the best fact-based decisions for the overall business.

Verify integrity: Quality is a major outsourcing concern, and was the downfall of many early projects. Create checks and balances for the outsource project where quality is measured on a number of levels:

• Data Integrity: Is the data from outsourced systems, (financials or operational data), accurate and complete? Is the data refreshed regularly?
• Service Integrity: Customer satisfaction surveys, call monitoring and agent coaching provide basic quality management. Operational reporting, scorecards and analytic tools provide more robust service management.
• Performance Management: Establish a performance management system that tracks performance and measures against expected results. Solutions are available from small-scale tracking and reporting systems (designed for small to mid-size companies), to full Enterprise Performance Management (EPM) systems.

As companies look to outsource a variety of business activities (including manufacturing, contact center, procurement, data management, Software as a Service (SaaS), marketing, etc.), the model for successful outsourcing becomes more complex. A hands-off, contract-signed, out of sight, out of mind approach to outsourced projects will spell disaster. These relationships are extensions of your organization; they rely on the same monitoring, management and integration as other business functions.

Outsourcing with integrity means creating a model that supports people, processes, and data at high quality levels that meet a company’s standards. It also means having the tools and framework in place to seamlessly integrate data from outsource systems into the company’s systems. And finally, it means ensuring that tools are in place to manage and monitor the relationship on an ongoing basis.

Outsourcing done right is good for shareholders, for the company and for the outsource partner. By taking the time to outsource with integrity, companies can experience lowered costs, streamlined operations, and have the opportunity to focus on business growth and corporate innovation rather than on peripheral business tasks.

Some Resources
Gartner Myth vs. The Real Deal Blog
Outsourcing Journal



(1) Dell admits it has "learnt its lesson" after being forced to drop its Indian call centre last year following customer complaints about the quality of service…The call centre operation for the OptiPlex desktops and Latitude laptops was moved back to the United States
ZDNet

(2) Sourcing Mag

Achieving Management Excellence in the face of IFRS

It was interesting to note that at Oracle OpenWorld, John Kopcke (SVP Oracle Enterprise Performance Management Global Business Unit), in his address entitled, “Extending Operational Excellence to Management Excellence – Oracle’s Vision for EPM,” mentioned that the only process that had been fully adopted consistently in the paradigm shift to Operational Excellence was the reporting component at the end of the transition. The reality of this adoption had more to do with Sarbanes-Oxley (SOX) than any management need to solve a reporting challenge. He further cited that the “World-Class” organizations had kept their cost containment programs in check as they passed through the hurdle of Sarbanes-Oxley adoption, while the peer group still struggles with the costs to support the new financial reporting standards eclipsing any innovation that might take place in their Finance department.

If the end result of the SOX paradigm shift was a regulation-induced reporting structure that streamlined reporting, then that raises questions about the next wave of reporting changes to take place over the next 24 months. IFRS, the International Financial Reporting Standards which will cause yet another upheaval in all US-based global company’s current reporting introduces a mandate to move to XBRL as well as to a “principal-based” set of standards - as opposed to our current dictated structure under US GAAP. The basic effect of that may be chaotic as it is in fact more interpretive than our current reporting standards and will require some restructuring of the consolidation process and most of the standards reports.

In a fragile economy such as we are experiencing, the idea of mandating such a dramatic change is almost incomprehensible. Most financial reporting structures are manually created in the data extracts and consolidation hierarchies that are the underlying foundation of the applications devoted to creating the book of reports that drives company profitability and fiscal responsibility. By mandating change and removing the strict principles of reporting, the interpretive nature means that costs internal to Finance will increase as companies will seek outside guidance to determine the best course of action. As costs increase in the Finance area, the gains attributed to best practices will be eroded and Finance will yet again be in turmoil and budget-constrained.

To be innovative in Finance you have to have the insight as to how to achieve Management Excellence as John Kopcke stated, from the Operational Excellence which was the previous goal. If, as a Financial Executive I spend the majority of my time trying to determine how to meet the needs of a moving target of regulated financial reporting, I have to wonder how I can be fiscally responsible. It seems that I need an army of consultants available at my beck and call to deliver the reports to which I am held responsible. What I really need is a flexible system that allows me to see my data from multiple perspectives, a cadre of internal experts with whom I can consult, and a book of reports that will meet my internal and external needs. The mandates of how the reports are to be formatted and how I do my consolidations and eliminations should be the easy part. I want to be innovative in my business, not in how I report my profitability and certainly not with additional expense likely in the adoption of IFRS.

To Automate...or not to Automate

A Deloitte study titled “When CFOs Debate: What Keeps You Up at Night?” finds CFOs agree that “finance should be extending its focus from accumulating information to adding value through insight” and asks what role automation should play. Deloitte's report (part of a pdf workbook with 9 important issues facing CFOs today) cites two reasons LOB managers still make decisions by ‘gut feel’:

1. they lack tools to unify finance and operational data, or
2. they rely on homegrown tools that generate numbers which are out-of-synch.

Does this mean companies should go all-in on a fully-automated performance management initiative? Look before you leap, it says, cautioning companies to assess their readiness in 3 key areas: 1) business processes, 2) master data management and 3) business alignment. After shoring-up these areas, it prescribes an 80/20 approach to automation, suggesting companies “shouldn’t have to manually mine multiple systems or conduct a special study for routine decisions and performance reports,” but still need flexibility to accommodate decisions that “require unique, in-depth analysis” or those that warrant a special data repository with “a ‘play room’ for analyzing non-routine decisions.”

Is 80/20 the right mix in an economy when few decisions are routine? Therein lies the question. With technology available to support 24/7 readiness of all data and business logic needed for structured AND unstructured analysis, finance departments no longer need to compromise. Making critical business decisions based on partially automated systems that are almost urgent enough to present data that’s somewhat complete lets technology vendors off the hook. Would you bet your next decision on that?

Getting to Useful

Forrester Research's new twist on BI introduces the concept of the `BI workspace' (see BI Without Borders report). The BI workspace offers a use case where "power users, especially power analysts, can explore data without their IT departments imposing any limitations or constraints, such as fixed data models, security, and production environment schedules."

Clearly identified as a supporting, not replacement solution for enterprise-grade BI implementations, options for the BI workspace leverage emerging technologies such as BI and Data Warehouse Software as a Service (SaaS), cloud computing and in-memory analytics as well as more established methods such as desktop analytics.

While solving some of the significant IT restrictions that can hobble an analyst's ability to perform, the BI workspace doesn't address many of the fundamental problems that are endemic in all BI systems – the inability for the business user, whether analyst, power user, or a departmental line manager, to access comprehensive operational and financial data in real-time or near real-time.

Business users must be armed with all of the data needed to make intelligent, accurate and forward-looking decisions. In order to make data truly meaningful, we must be able to export the financial data stored in the BI cube and integrate it into a larger warehouse that includes operational data. With hugely fluctuating external data, updated external data must be accessible in near-real time. If we cannot determine the economic value of a business decision (in this volatile market), how can we accurately forecast our future? As Boris Evelson, Forrester researcher and author of "BI Without Borders" said:

"Reporting and analysis are just the tip of the iceberg - it's getting data to the point where it can be useful is the real trick."

A Gathering of Innovators

The relationship between Finance and IT is often described as disconnected or in opposition. And, why not? These two teams have different priorities, different audiences and different tools. They even speak different languages - profitability, margins, forecasts vs. maintainability, security, performance.

Yet their corporate goals are often identical. One approaches from a business value perspective, while the other from a technical implementation and maintenance perspective. They are often dependant upon each other for their combined project success, and in many organizations, they often work under the same umbrella of the CFO. As the corporate focus shifts from organizational differentiation, the barriers between IT and business groups can be overcome by their common goals.

I expect to see increasing interest and awareness in the value of creating true business and technology partnerships as companies explore ways to increase profits, streamline operations, and explore avenues for innovation within their organizations. This week's CFO Technology Summit in San Francisco brings together executives from around the country to focus on how they can take control of their IT investments. The summit also includes some of the industry's great innovators and thought leaders, such as Faisal Hoque , Founder and CEO of Business Technology Management (BTM) Corporation , who will be exploring the issues and opportunities that arise with the convergence of business and technology. As Mr. Hoque said in a recent CIO Insight podcast interview:

"We have begun to focus on information versus the technology… We are reaching a converge state where there is no difference between business and technology… The information is driving knowledge and knowledge drives innovation."

This blog is dedicated to financial system innovators, and this week we salute those visionaries at companies large and small who are coming together in San Francisco to explore possibilities for innovation within their organizations.

- Trevor Hughes

Understanding the Impact of New Technologies on BI

"Rather than relying solely on a rigid metaphor like data warehousing, BI needs the ability to access data anywhere it can be found and to perform integration on the fly, if necessary. Locating the right information to solve problems must be a semantic process, not requiring knowledge of data structures or canonical forms."

Neil Raden, Intelligent Enterprise, Business Intelligence 2.0

A long-standing concern between business teams and IT is the question "Have we spent the past years creating some monolithic solution that is now unmanageable?" Can it come close to addressing the needs of the current and future business? Have the Business Intelligence (BI) systems that we've created become rigid metaphors, as Neil Raden proposes that data warehouses have become?

Implementing a BI system has always been hard and costly. But the value, once up and running, can be enormous. Insight isn't something to be taken lightly; it can change the very nature of how a business is run. It is no wonder, then, that the markets for BI and performance management solutions are expanding rapidly.

The business needs for BI are going far beyond traditional analysis and reporting; companies are now expecting information access in real-time, across global constituencies, and beyond the limitations of financial data, or for that matter, data itself. The BI systems that we built over the past decade simply may not scale to meet today's requirements.

New technologies such as software as a service (SaaS) are impacting the very nature of software development and delivery, and are also helping to shape the future direction of BI. Even large vendors such as SAP and Oracle are testing out the on-demand waters, SAP with its' 'Business by Design' on-demand solution, and Oracle delivering Oracle Hyperion On Demand. While SaaS has yet to experience broad acceptance in the marketplace, niche BI companies such as LucidEra, Adaptive Planning, Host Analytics and PivotLink are gaining customers with their on-demand offerings, and open the market to small and mid-size (SMB) companies.

Open source BI offerings may provide a clue into another alternative direction for BI markets – again with potential business benefit. As the time and cost of implementing and supporting BI solutions are reduced, so too will the bar lower to a level where SMBs can take advantage of BI, while larger companies can customize solutions and extend analytics across the enterprise. BI will broaden from the hands of the few into the hands of many.

While the new technologies broaden the BI market offerings, they exacerbate the issues companies currently face managing financial data across increasingly stratified and expanding markets. We are already dealing with a crisis in data management. Critical financial information is stored in proprietary BI systems and cannot be easily extracted or combined with operational data. Information from all source systems must be auditable and compliant. It must exist in standard structures that will support future development of combined data with other content sources. Before we can truly scale to meet the coming needs of the BI market we must create a reliable and consistent method for moving and managing data across the enterprise.

The increasingly complex business demands on BI systems are a further validation of the success and relevance of the market. We can learn from other rapidly-evolving technologies that have gone through major expansions as a result of their cumulative relevance. The Web, and Web based standards come to mind as an example of a technology that has successfully transitioned into a much higher form of relevance. Standardization, interoperability, and security are core Web concepts. Before we can hope to truly leverage new technologies, we must overcome the limitations that we've built into our existing BI systems, ensuring standardized data access mechanisms, real-time, secure access to data, and a framework that will extend into the next realm of BI technology development, and Radan's vision of "Locating the right information to solve problems must be a semantic process, not requiring knowledge of data structures or canonical forms."

Profitable vs Unprofitable Decision-Making

Oracle finally gets it, at least in words. Frank Buytendijk’s blog on “Management Excellence and Oracle EPM part 1” suggests that Oracle may have tried to solve the challenge of making profitable Operational decisions by including the underlying Financial data. He further suggests that Oracle is two years ahead of their closest integration competitor. While I don’t believe the latter and have evidence as to its untruth, I do believe that Frank is focused in the right direction to suggest that a diet of pure financial data or pure operational data is drought or famine, but certainly not a balanced meal. A truly healthy business will make vital decisions that combine up-to-the-minute financial data with the operational systems data to ensure a data-enriched decision process. Decisions in a financial vacuum are anemic and life-threatening when variables such as gas prices, finance rates, currency translation and inventory levels are critical to a decision process and have a delay or periodic update cycle that is out of synch with the decision-making continuum. Multi-dimensional data still lags behind transactional data in its ability to be accessed in a time-sensitive manner due to the very systems that created the data. The power of the cube, such as delivered by Hyperion, created a one-way flow that is now antiquated in theory. The strong financial instincts of today’s CFOs and rising finance stars begs the use of this cube data downstream, co-mingled with the operational decisions of the lines of business. This is the innovation of which we speak; the ability to ask for more and initiate change to older patterns of behavior to uncover a fresh use of data, propelling the business forward into leadership.

BI Competency Centers: Do CFOs Help or Hinder?

Intelligent Enterprise Editor-in-Chief Doug Henschen moderated a webinar last week titled “Business Intelligence Competency Centers (BICCs): Many Choices, Many Pitfalls” sponsored by Forrester Research. With BI now considered “table stakes,” panelists Boris Evelson and James Kobielus of Forrester, BI consultant Claudia Imhoff and Capgemini’s Joe Moye discussed how enterprises can drive greater value from their BICC investments.

One recommendation was to cross-pollinate BICCs with other CCs in areas such as Business and IT Governance; Enterprise Architecture; Data Warehousing, Data Quality and Data Integration; ERP, CRM, Supply Chain Management, etc. While this makes perfect sense, doesn’t it seem ironic that we still need to encourage coordination after the costly lessons we (hopefully) learned from propagating BI application stovepipes?

Side note: With many of the CCs above revolving not just around competencies but applications and processes, it was interesting that James suggested BICCs be renamed BISCs (BI Solution Centers). We'll keep an eye on a Forrester report in queue on this topic for October.

The idea of coordinating CCs reminds me of conversations I’ve had with an aerospace and defense company that extended their BICC with specialized data integration technology for key applications. As a result of tapping into finance data, the company is supporting deeper BI analytics based on time-sensitive operational insights.

To boost synergy between CCs, one panelist suggested overlapping them and allowing personnel on the teams to create hybrid roles. This brings to mind the success story of a cosmetics company that adopted a war room approach to unite IT and line of business experts for projects.

The most interesting part of the discussion involved who should own a BICC: IT or line of business. Not surprisingly, opinions varied, with Evelson advocating for ownership by C-level business executives and Imhoff taking a more IT-centered approach. Evelson added that most of the successful BI environments he’s seen have had strong business ownership (for more check out his keynote at the Computerworld BI Perspectives conference Sept. 8th). Imhoff underscored the need for technical acumen beyond the skills of the business analyst – areas such as data integrity, data quality and database performance. (Rajan Chandras takes this a step further on his Intelligent Enterprise blog post, urging readers to explore the qualifications needed to influence BICC success)

Imhoff asserted that CCs should not report to the CEO’s or CFO’s offices, going so far as to suggest that CFOs may infuse too much of a finance or accounting flavor. It’s hard for me to imagine many business decisions that don’t impact profitability, competitive advantage or shareholder value, but since time ran out on the webinar, let’s open up that part of the discussion here.

What do you think? Are CFOs the best stewards of these BI centers?

Jumping Ship or Just Jumping?

I just read that Wachovia's Chief Risk Officer, Donald Truslow, is on the way out the door just a week after CFO Thomas Wurtz announced his resignation. Given the sad state of the banking giant, I wouldn't be keen to stay, either. It makes sense. And I'm sure that it makes very good sense if you are sitting in what are probably two of the hottest seats in the house when the risk around one major M&A activity, in this case the Golden West Financial Corp acquisition, may scuttle the company. So in Wachovia's case, the run for the door makes sense.

Then I read the following list of CFOs on the Move, which covers just the week of August 1: Wachovia, Campbell's Soup, The Children's Place, Navigators, Forbes.com, United Plastics Group, Icahn Enterprises, Hayes Lemmerz, ARI, Orisis, Michaels, JP Morgan Cazenove, EnBW, Friends Provident, Ascom, AP Moller Maersk, Sistema.

While I've been posting about the changing role of the CFO recently, I haven't written about the individual impacts of that changing role upon CFOs. According to Heidrick & Struggles, 106 CFOs at Fortune 1000 companies left their positions in the first half of 2008. What the heck is going on here? Where are all the CFOs going? Are these voluntary resignations, jumping ship like so many of the Wachovia team, force-outs, or is this a trend brought about by the expanding nature of the role.

Are CFOs leaving companies when there is little opportunity to participate as a contributor at the strategic level? As regulatory compliance becomes stricter, the risks associated with the CFO role increases. Well beyond job pressure, CFOs are putting their legal necks on the dotted line every quarter. I believe in this time, when the CFO manages such a large portion of the corporate risk, that the benefits of the position have to outweigh the risks they're been forced to assume. If data is accurate and trusted, performance management systems well-designed and implemented, and the business practices sound, much of the fear of compliance is eliminated.

Companies that are focused on innovative ways of running their businesses, with Finance as a key contributor to the strategic and operational vision, tend to be exciting places to work. If the CFO can trust the accuracy of data coming from their systems (and with a 3-5 year CFO tenure at the best of times, unless it's a startup, you can assure that most CFOs have inherited their accounting, G/L, performance management etc. systems), then they are freed up to focus on contributing to the company at a more strategic level.

My opinion: perhaps the incredible CFO turnover that we've seen in the past several years has less to do with the company as the role.

Thoughts?

Continuous Planning Architecture, Phase 2

Back in April, Kimberley Bermender posted on the finance systems architecture needed to support a continuous planning environment. The overall design goals included:

• Lower cost of maintenance,
• Standards-based data integration,
• Support of accurate, near real-time views into operations,
• A platform to support detecting, modeling, selecting and implementing change and then measuring results.

The main ingredients were:

• financial and operational data stores,
• an analytic (OLAP) engine – with reporting, and
• planning applications

Inherent in the architecture is the movement of data between data stores and OLAP cubes, as well as fact and metadata management. To build on that architecture, “phase 2” can include two other components that build on those design goals and get you closer to enterprise performance management nirvana.

The first is master data (or ‘reference’ data) management, and the second is a common enterprise performance management rules or calculation engine.

Master data management includes the tracking and control processes of data relationships (especially hierarchies) and instances across the enterprise. For example, product sales for a store in Ft. Collins, CO could roll-up to a ‘Central’ region one quarter, and then to the ‘West’ region the next quarter after a re-org. It’s important to keep track of which region it belonged to when doing quarter over quarter comparisons and other management reporting (not to mention statutory reconciliation and reporting). And that hierarchy could be contained in the store reporting application, the sales forecasting system, the G/L, the customer relationship management (CRM) system, and so on. Right now, those relationships are probably being manually managed and ‘lightly’ controlled. Our more complex financial systems require more automation and more rigorous control over master/reference data. And it certainly addresses at least the first 2 design considerations of Kimberley’s architecture.

For more on master data, see this DMReview landing page.

The second component is a central business rules/calculation engine. In any enterprise performance management environment, users can easily get bogged down in the definitions of data and information. For example, that Ft. Collins store could be looking at a ‘revenue’ report and not know if it’s booked revenue, commissionable revenue, recognized revenue, and so on. And even when they find out what kind of revenue it is, there can be a question of it’s accuracy: how did head office calculate it, where did they get the data from, and does it include intercompany sales or not?

Having one business rules engine lets the enterprise define ‘recognized revenue’ once, with control over the algorithms, the data refresh frequency, the data sources, and so on. Once the rules engine has certified a number, it can be used by all other enterprise performance management systems: planning can use it for prior actuals, strategic financial models can use it for long term scenarios, same store sales dashboards can use it for ranking, and so on.
The three-fold goal is to get better transparency into financial information (how did we get that number), better accountability (finance owns and certifies the number), more efficiency (define it once, don’t reinvent the wheel), and ‘believe-ability’ (start debating what to do about the results, not where the number came from).

Here’s a good article by Robert Blasum in DM Review on central rules (he also connects them to master data management)

Thanks to Kimberley and the team for letting me guest blog, please feel free to visit the Business Foundation blog over at http://businessfoundation.typepad.com/

Fuel Costs on the Mind: A Little Innovation Required

As Duke University/CFO.com released their Global Business Outlook Survey, it came as a real shock that as much as inflation or the weak US dollar, rising fuel costs were identified as a key concern for many CFOs. Equally surprising, that almost half of the companies surveyed are dealing with this by raising prices (by up to 4%), while wage increases are estimated to grow by only 3%. Most surprising, that we’re just now dealing with fuel costs as a major business impact. Fuel costs have been rising for years. Every commuter has watched their gas bills jump, often to the point of impacting their monthly household finances. As a finance community, we have only to look as far as our own households, take the lessons learned, and apply them to our companies to find cost-saving opportunities.

For several years now, chip manufacturers have battled as hard on energy efficiency as processor speeds. Why? Because energy costs have soared and companies know that there are huge savings to be found in lower energy-consuming server farms. Technology companies have had telecommuting programs for years, realizing diverse savings from facility management to employee retention. To what percent can we reduce business travel? What opportunities exist in our manufacturing departments, shipping, alternative fuel source options? What are the impacts to our internal processes and external stakeholder groups as we consider these changes?

There is still opportunity for companies to streamline operations, even within manufacturing, where most companies tend to focus efficiency programs. Unfortunately, it tends to be at points where we hit economic crises that we get creative about searching for these opportunities. This is one area where the Finance team has the chance to take a leadership role in driving change within your organization. Finance teams that have access to both the financial and operational data have a unique perspective into the entire business model. Who better to be able to identify opportunity, model scenarios and impacts to internal and external stakeholders, and educate line of business teams on potential areas for improvements across business lines?

The Global Business Outlook Survey provides a bleak picture for the economy, with raised prices and layoffs in the forecast. But it is exactly at these points when the true value of the innovative CFO can be felt across the organization. Ours is the only team that has access to the financial and operational data, combined with the tools to analyze and model the impacts of potential scenarios on the business. By working with the executive team and lines of business, we can explore creative improvements or alternatives to current processes and company business practices. The opportunities are myriad.

Tips from the Big Guys: Yahoo Shares Planning Architecture and EPM Strategies

With so much focus on Yahoo’s search advertising strategy and ongoing battles with Microsoft, a webinar that focuses solely on their internal planning and back-end processes is a welcome diversion, not to mention a fascinating education. The Yahoo EPM Webinar, sponsored by Star Analytics and Key Performance Ideas, provided insight into how one very large company deals with key performance management issues, including:

• Creating highly efficient planning systems
• Maintaining data integrity
• Improving corporate reporting standards

Bob Yau, a Director of Corporate Applications at Yahoo, walked through their Enterprise Performance Management strategy and architecture and discussed how they have successfully implemented a project to help Yahoo efficiently manage change in a highly competitive market.

Yahoo has created a technical architecture for managing and exporting Hyperion Planning and Essbase data that provides their global business community with 24x7 access to near real-time planning and reporting data. Data is scheduled and automatically exported frequently throughout the day from the Planning application and is (again, automatically) synchronized with their Oracle Data Warehouse, eliminating data latency. Other benefits (and key project requirements) include their ability to maintain corporate reporting standards and improve compliance.

While the webinar does get technical (that’s right, architectural diagrams and everything) Mr. Yau does an excellent job of focusing as much on the business requirements and user needs as the technical implementation. Mr. Yau finishes off the webinar with his ‘Top 10’ lessons learned from his implementation, which covers both technical and business experience. #10 – Partner with the business for success. Good advice. Thanks Yahoo for providing such an insightful view into some of your key processes that support your enterprise performance management.

View webinar

The "Empowered Chief Financial Officer"

In my last post, I referenced a recent CFO Research study of 171 finance executives that found that over 70% of finance activities are still focused on routine finance and accounting tasks. What the heck? That percentage really threw me. So I started looking at posted CFO job descriptions to find out what companies really want from their CFOs, and sure enough, there was the standard list. The following job description actually came with the job title "Empowered Chief Financial Officer:"

1. Prepare Management Reports
2. Manage Routine Accounting Functions
3. Manage Administration Functions

Where is the empowerment here? Then, as I continued perusing job descriptions from various sites, I started seeing some different twists on the CFO role. Job requirements included:

• Act as a change agent within and outside Finance
• Partner with business units
• Internal process improvement
• Investor activities

The primary difference that I found in the job descriptions was that these were postings for larger companies. Do these companies have their governance processes established and can now focus more effort on decision management? Are their investors demanding more participation from the CFO? Are their businesses in extremely competitive markets? All of the above?

While regulatory compliance is obviously a key concern for any public company, it became clear to me that there is a growing requirement for CFOs to broaden their organizational role. While I suggested in my last post that the Finance team should be educating, providing guidance and showing additional value to business teams, it appears that these functions are working their way into the job description, as well. Now there seems to be some opportunity for empowerment.

I’d love to hear from some CFOs out there what your job functions are looking like – are you primarily focused on control and compliance, or does a significant part of your role include collaboration with lines of business, expanded business and performance management tasks? Are you working to roll out reporting tools to expanded user communities within the business? Are you seeing your role change within your organization? What percentage division are you seeing in your tasks? Please share your experience in the Comments section.

Thoughts?

Sources include: finance.cfo.jobs.executiveregistry.com, jobs.efinancialcareers.com, www.careerbuilder.com, www.cfonet.com, www.cfo.com

Resolutions for a New Year

For many companies, June 30^th marks the fiscal year end; as the sales teams’ frenzy wraps up, the Finance team is crunching the numbers to publish reports. And while publishing the annual ‘report card’ isn’t the most glamorous part of the job, it is often the most externally visible aspect of finance, and within many companies, finance and accounting activities do consume the vast majority of the Finance departments’ time.

A Changing Role

In a recent CFO Research study of 171 finance executives, they found that over 70% of finance activities are still focused on routine finance and accounting tasks, with less than 30% of time spent on decision support. But in the next two years, over 86% of respondents anticipate incremental or dramatic improvements for supporting business management. (1)

The role of Finance is changing to take a greater part in guiding and influencing both management and business decisions alike. Many companies are realizing the value of partnering finance with business to streamline efficiency, productivity and profitability. But while the value is recognized, the time and resources dedicated to this aspect of the role still remain limited. So the challenge becomes: how do we in Finance become an active contributor in and supporter of improved business management, while continuing to support traditional accounting and finance activities?

Finance Report Card

It’s the end of the year; the company report-card is being published. Let’s think about our own organizations – how did we support innovation and collaboration through the business this year?

• Educate C-level team. If you are fortunate to have a finance-savvy CEO, much of your work is done. But in many companies, educating the executive team about the opportunities for business collaboration, and the kinds of information that finance can provide to teams, is a critical step.
• Establish relationships with business units. Adding value to business information is the fastest way to become a trusted partner to business units. Creating a two-way channel of communication allows Finance to fully understand the business issues and end-user requirements, in order to provide the most meaningful support possible.
• Collaborate with IT to find best ways to leverage operational and financial data, and to explore future company requirements for information. In order for Finance to provide strategic direction, and for business teams to make appropriate decisions, users must have access to accurate and timely information. In collaborative efforts, scope, budget and prioritization are established to ensure the project best meets the business end goals.
• Internal education. As the role of Finance rapidly expands, there is a need for a broader skillset within the team. Analytical skills must be complemented with market knowledge and an understanding the business functions. Collaboration with technology groups requires knowledge of technical requirements and capabilities as well as a common language. All of which means that ongoing education and external focus is imperative for success.
• Examine existing processes. By refining and modifying existing processes and systems, there is often opportunity for significant improvement. What changes to the planning process would yield greater insight into your market? How fast are you able to get information to business teams? Can they respond appropriately with the information provided? Are the same questions consistently repeated at executive meetings? What is the value of being able to provide this information?

Resolutions

This list just begins to scratch the surface of opportunities to work on innovation and collaboration within a business. Even if you work in an area where the company sees Finance as primarily focused on traditional reporting and accounting tasks, there are myriad opportunities to make contributions that will gradually have larger effects upon the organization. Beginning with the education and support of executive management and business units, you establish yourself as a value-adding member of a larger business team. And as companies experience faster and more significant change in order to keep up with competitive markets, the role of Finance will expand and change as well.

As many companies enter a new fiscal year, and in the tried and true tradition of New Year’s resolutions, the question to Finance: What role do we envision for ourselves in the company? What will our contribution to the company’s success look like in the following year? What changes do we need to make to be leaders within the organization? And once we answer these questions, we’ve already got our new year’s resolutions done. Closing the books is easy after that.

1) CFO Research. “The Evolution of the Finance Function: Teaming with Business Management to Adapt and Thrive.” March 2008

Thoughts from ODTUG Kaleidoscope 2008

Kaleidoscope 2008 is getting into full swing, and I've already found some nuggets of wisdom from the speakers. Ron Moore, one of the first Essbase certified consultants in the world and founder of Marketing Technologies Group (http://www.mtgny.com/), is a speaker at Kaleidoscope this year. In conversation with him about blending analytic and relational data, he said that you:

"Just can't get by on a hammer or a saw - you need both."

From the perspective of corporate data, that just rings true. Companies can't simply rely upon cube data from their analytic applications in order to make the best business decisions, and they can't rely solely upon relational data – they need both. And to create a central data store requires cooperation between the business owners (of analytic data) and IT owners (of the relational data stores).

Many companies experience a disconnect between the Finance and IT groups, as their goals can appear to be at odds. While Finance teams often implement the business systems, it is IT who inherits the issues of compliance, maintainability, and governance for those systems. But in order to successfully integrate corporate data to provide a holistic information view, the project requires the cooperation of both groups.

In order to harness the value of the content in the cube data, we need to synthesize it within relational data sources. Ultimately, a standard rows and columns relational database is the only common ground to which every application available to the information technology industry can have ubiquitous access. Trying to achieve the bridge in the absence of relational technology creates the potential for a myriad of misinterpretation and eventually the value of the cube data would get lost in translation.

Once the cube data is exported into a relational structure, the infrastructure and data are in place to provide information access to stakeholder groups across the business. A potential next project step, incorporating data from other sources such as ERP or CRM systems or operational data stores, creates a centralized, single version of the truth for all stakeholders to work from, and provides a comprehensive, holistic view of the business that includes both operational and management data.

The benefits of this level of integration to a company are myriad. But as Ron Moore so succinctly put it, it takes both the hammer and the saw to make this kind of effort successful. Finding the tools and technologies that can help bridge the inherent gap between groups is imperative to success.

As Kaleidoscope continues through the week, I'm sure that I'll hear more about opportunities to create mutually beneficial projects between Finance and IT groups and the tools to support them. With technical and thought leaders from across the country here in New Orleans, I'm sure I'll find a few more nuggets of wisdom to share this week.

Addendum

I recently attended a business meeting with Mr. Howard Dresner, industry expert and thought leader for Enterprise Performance Management (EPM), and I paraphrased his comments in my last post on Insight vs. Accountability. In fact, it was his comments that inspired the post. Today, I came across a recent post from Mr. Dresner's blog that encapsulates and extends my paraphrasing. I thought I'd share the quote, and let you have it directly from his words:

"The inclination to buy "yet-another-tool" remains strong – even though most acknowledge it's the wrong thing to do. Of course, vendors like to sell more technology. However, most organizations already have plenty. What they lack is a roadmap and the vision to properly deploy it. But, buying another tool is so much easier than addressing the real problem: a lack of management commitment and organization dysfunction."

Food for thought…

Insight vs. Accountability: Redefining Corporate Performance

Insight: The clear (and often sudden) understanding of a complex situation. (1)

Accountability: The obligation to demonstrate and take responsibility for performance in light of commitments and expected outcomes. (2)

I recently had the opportunity to hear Howard Dresner speak at a business meeting where he touched on the scariest aspect of Enterprise Performance Management – that everyone in the organization becomes accountable (my apologies for the paraphrasing). As he spoke, I experienced an 'Aha' moment. Nobody really wants that. Not really. Well, maybe the CFO, but nobody else.

In past posts I've discussed the evolution of Business Intelligence (BI) and how we've moved from information gathering and analysis into performance-driven organizations. And while I have touched on the shift needed to create a performance-driven culture, I wanted to pause and really think about this.

RESPONSIBILITY FOR PERFORMANCE = ACCOUNTABILITY

It's not enough to understand where our business impacts are occurring, or even why they occur. Thus far, companies have made considerable investments to address these issues. We need to go beyond this: we need to know the what, understand the why, and ensure that the people who can take action have the tools in place to make the best decisions, and that they are accountable for the actions that they take, as well as the actions that they don't. That is a big, scary order. Imagine if every decision you made in a day showed up on a scoreboard. Hey, this was in my area of responsibility and I just blew it off, and everyone is the wiser. It cuts against the very grain of corporate culture.

Bob Kaplan and David Norton, creators of the balanced scorecard, identified in their recent Harvard Business Review article Mastering the Management System, (3) "breakdowns in a company's management system, not managers' lack of ability or effort, are what cause a company's underperformance. By management system, we're referring to the integrated set of processes and tools that a company uses to develop its strategy, translate it into operational actions, and monitor and improve the effectiveness of both."

Many companies, recognizing the benefits of performance management, have already made extensive investments in the technologies to support true organizational accountability:

• EPM systems provide the alignment between strategic, tactical and operational performance.
• The integration of data from financial, operational and stakeholder systems provides a comprehensive, accurate view of our organizational ecosystem.
• Process tools such as balanced scorecards let us manage and monitor the transition from strategy to execution.
• As we come closer to real-time analytics, we are working with a leading, predictive view of our businesses.

With these systems in place, and as we experience unprecedented insight into and understanding of our businesses, we have the infrastructure to support enterprise performance management. We need to continue to develop the business processes and philosophy that support a discipline of continuous awareness and accountability for decision-making within the company.

Building a performance-driven, accountable culture requires a ground-up rethinking of how we do business. It takes leaders from within the organization, at all levels, to drive accountability and to have the discipline to be continually aware of and adapt their plans to subtle changes in the business. They must have a view of the broader business environment, the impacts of their decisions on their own business areas as well as other groups, and access to the right information, updated in real-time. It is a tall order, but by combining accurate data, management tools, and sound business processes, companies can drastically change their performance within the market, and realize gains that go beyond financial success and into a transformation of their corporate culture.

Sources
1. Princeton University Cognitive Science Laboratory, WordNet, Insight

2. Government of Canada Information Management Glossary, Accountability
http://www.informationmanagement.gc.ca/docs/guid-orient/concepts/concepts07_e.asp

3. Robert Kaplan and David Norton. "Mastering the Management System," Harvard Business Review

Ready for Operational Business Intelligence? A Good Read…

Operational reporting isn't new; I remember slogging through reams of mainframe-generated reports in my very first job out of college, many years ago. So why is operational Business Intelligence (BI) garnering so much headline real estate these days?

Expanding beyond traditional, strategic business intelligence, operational BI provides an unprecedented level of business insight to support the management of daily operations. And as we look at ways to extend our existing investments in analytic applications, this seems a natural evolution. But introducing operational BI into your organization comes at a cost. The impact on your data warehouse environment can be enormously disruptive if not approached with the understanding that this is a broad-scale project that will have significant impact (and benefits to be realized) across the organization.

Claudia Imhoff, recognized thought leader and expert on business intelligence, has published a new white paper on The Ever-Evolving Data Warehouse: Dealing with Changes and Pressures for BI Today that discusses the impacts of operational BI on the data warehouse environment. Some of her key takeaways regarding the impacts to data warehouse include:

• Scalability
• Performance
• Continuous availability
• Ability to combine different sources of data

While not exactly summertime holiday light reading, her white paper focuses on the impacts to the data warehouse and provides great food for thought for those of you who are considering or beginning an operational BI project. The paper digs into issues beyond the `headline-hype' of operational BI; in fact, the considerations that she discusses are applicable beyond operations and are equally appropriate for any project aimed at extending the foundation laid with your existing BI systems.

Instant Continuous Planning: Just Add Water (Part 2)

In the previous Continuous Planning post, we discussed the evolution of management processes from a lagging to leading view of the business and examined the business processes needed to support the continuous planning cycle.

Defining and evolving management processes requires the confluence of data across and between all stakeholders within the business environment, including customers, supply chain, and organizational groups such as Finance. For the Finance department, this means providing the means for continuous planning and the ability to consolidate these digested results with the organization's other data. To support this, there are a number of technologies that must be in place within the organization:

• Planning application
• Analytic application (OLAP database)
• Financial & operational data stores
• While not necessary, performance management tools such as scorecards and dashboards provide a feedback loop

Best practices dictate that the following technical and process requirements support the continuous planning cycle:

• 100% uptime of the planning application. This is particularly important for global enterprises where teams in various geographies are accessing data; no group can be shut down.
• Near real-time reporting. Incremental data updates and calculations provide near real-time reporting against plan data.
• Integration with operational and business data. Access to operational data provides necessary planning context; as well as instant feedback and adjustments to the plan. Availability of other data such as supporting detail or plan assumptions is integral within the reporting environment.
• Consistent performance. Ensuring fast and consistent performance is crucial during the planning cycle.

Architecture to Support Continuous Planning Cycle

The architectural framework required to support a continuous planning cycle includes:

• Change Data Capture. The planning application collects data and performs value-adding multidimensional calculations upon the data, but does not aggregate it. Through an intelligent backup process, only changed data is backed up and extracted from the application.
• Financial Data Store. At an established rate (every 2 minutes, for example), changed data is extracted from the planning application and is automatically loaded, with associated metadata and security, into the central repository. The shared data enables the ability to quickly digest and present data to the analytic applications.
• Load into the Analytic Reporting Application. From the financial data store, the financial assets are loaded into the reporting analytic application, where consolidations can be completed on-the-fly.
• Reporting from Analytic Applications. The reporting application should be easily accessible from a wide range of tools – including performance dashboards, scorecards, report writers, spreadsheets, and any other common reporting tools used within the organization.
• Alternative Architectural Options. Flexible reporting strategies can be a valuable extension of this architecture. For example, a planning cube can contain few dimensions and limited granularity. The reporting cube can have additional dimensions and a deeper level of detail to support robust reporting needs.

Previously, the support of this architecture required a patchwork of data movement tools and custom scripts that did not allow for the integration of data from the proprietary source systems into a larger financial data warehouse. This did not enable the sharing of data within the greater organization and generally required a costly combination of tools and consulting that needed ongoing maintenance and support.

But companies are now accomplishing this efficiently and cost-effectively, with a significantly lower cost of maintenance. With the availability of comprehensive, standards-based data integration solutions and management teams establishing best practices around their planning cycles, the transition from a lagging to a leading planning process, with accurate, near real-time views into operations, is a realistic goal for any organization. The return on this investment is the creation of an innovative, flexible, and dynamic planning cycle that allows your company to quickly recognize changes in the competitive landscape, the ability to model changes quickly, determine the best alternatives, implement, and measure results.

Instant Continuous Planning: Just Add Water

It's a strange feeling when personal and business lives intersect, and as I sit down to write about the value of continuous planning cycles in the business process, I am struck by recent personal experience.

It's March 25th, 10 pm, and I am sitting on the floor of my home office, a cardboard box beside me, as I stack piles of receipts, 1099s, stock sale receipts, etc in preparation for tomorrow's tax meeting with my accountant. I really don't know what to expect from this meeting – where am I in relation to the plans I set in January 2007? I could swear that I sat in the same place last year promising myself that I was going to improve this system.

And while some of you may relate to my experience (hopefully, as misery does love company), it gives me pause to think that, on a much larger scale, many of our corporate planning cycles don't fare much better. As a business director responsible for budget and planning cycles, when do you start your process? How many annual/monthly/weekly iterations do you go through? What is the effect of business change on your planning cycle? Are you feeling like there's a cardboard box beside you, yet?

With the demand for businesses to adapt quickly to changing markets in order to stay competitive and operate at maximum efficiency, we have seen significant streamlining of the planning process in recent years. In parallel, we've seen the tools and supporting infrastructure technologies become more sophisticated and robust in order to support operational and reporting needs. With pressure to move from a lagging to leading view of the business, we've evolved from annual budgets, to quarterly planning, to rolling 13 month plans and now we're recognizing the need for a continuous planning cycle that provides an accurate, real-time view of our operations.

I often hear that the concept of continuous planning in a fast-changing corporate environment is a Utopian vision rather than a realistic goal. And yet large, dynamic companies such as Symantec and Yahoo have successfully implemented continuous planning cycles into their business processes. So how do they approach this? What tools do they use? How do they measure results from their planning process?

Implementing a continuous planning cycle in your organization is not about buying a tool. It's not about agreeing to a process during a management meeting. Continuous planning requires the direction and support of the entire management team to reinvent the way the company approaches the planning process. It needs management to create a chain of accountability throughout the organization, from C-level to individual contributors; every person knows their role, their goals, the company's goals and where they stand in relation to meeting those goals. Continuous planning requires the implementation of best practices and an effective process within the organization, as well as the tools to support the process.

A successful continuous planning process requires collaboration between executive management, finance department and operational teams:
1. Define strategic goals.
2. Create plans, rolling forecasts & budgets for all levels of the
organization.
3. Roll out, analyze against execution & provide feedback loops.
4. Model & realign plans as needed.
5. Monitor & report, with audit information for regulatory & statutory
reporting requirements.

In a continuous planning cycle, steps 3 & 4 are iterative and constantly changing, driving the need for updated information to be delivered to the desktop at a near real-time rate.

To Be Continued... The Secret Sauce in the Technical Details

Insight on the Gartner BI Conference in Chicago

As a long time attendee of the various Gartner events, my favorite has always been the more intimate setting of the BI summit - typically held in Chicago. Boy, was I surprised at the 1200+ attendees of this year's conference and the expectation of bigger growth to fuel a move to Washington, DC in 2009. Last year’s event pales in comparison. BI advocates, typically a cross-over role between Finance and IT, have made a rather dramatic transition into the IT camp for this conference. Many of the sessions were educational and entry-level in scope and oriented to the first time architect and supporter of Business Intelligence environments. The event has clearly moved away from the user of past years.

Also notable was the absence of discussions on the relative cost savings in deploying a BI environment for better business planning and analysis. Other than the one rather cheeky session on how to negotiate a good deal with your BI vendor, I expected to hear more about cost cutting and using BI data to enable efficiencies and identify cost-prohibitive inefficiencies. The market picture has been doom and gloom and the "R" word blatantly used. Instead I heard a great deal about enabling integration and the expansion of analytic applications.

I think this is great news! Clearly the message was to expand the BI footprint and make use of the technology that can drive profitability, not focus on doing more with less. I had conversations with luminaries such as Howard Dresner and Ron Powell, but I also spoke with a number of vendors and implementers such as IBM GBS and Palladium, who had similar messaging of exploiting the existing technologies and refining processes to drive revenue and deliver data on a more continual basis to the employees who can make the right decisions in real-time. This to me is a message of expansion and focus, rather than retrenchment and limitations. I heard a great deal about the continual need for data, an almost real-time need to do continuous planning and report on finer levels of granular information in a more automated fashion. The message was clear. BI is tops in priority and destined to gain more mindshare of senior IT executives as the business expands and focuses their growth. To grow and expand you always need Innovators who can do more with less, but also the visionaries who can see the gold amongst the rock.

The Challenge Remains the Same

In the recently published "Cost Cutting in Data Management and Integration, 2008," Gartner emphasizes the need to reduce costs while continuing to support BI initiatives. Sound familiar? The operating motto for CIOs and IT teams for the past several years: Do more with less.

With recent downturns in the US economy, the business needs for the data coming from BI systems have become critical to companies’ maintaining their competitiveness. When there is less money in play, companies have to understand all facets of their business: where they are making money and where they are leaving opportunities for improvement on the table, to plan continuously, and to have the frameworks in place to change directions quickly in order to stay at the forefront of their markets. There is a pressing need for accurate, reliable data from which they can analyze and gain the insight needed to make the best business decisions possible. This source data comes from the same IT team tasked with reducing their costs.

Balancing the business need for insight into the organization and the IT need to reduce costs is where innovation can occur. Gartner’s report provides a number of recommendations for cutting costs within data management initiatives, ranging from the common-sense Optimize Data Integration Tools Licensing to recommendations that are complex and require creativity within the IT teams to successfully achieve: projects like Perform Operational Database Consolidation and Perform Data Mart Consolidation. Gartner estimates the payback from data mart consolidation as a savings of “approximately 50 percent of the total cost allocated to supporting their disparate data marts if they consolidate those marts into an application-neutral data warehouse.”

Easily said, but how to get from here to there? The solution lies in feeding a central application-neutral data warehouse with business critical data from application-specific data marts. To do this requires using intelligent data movement applications to ensure that this feeding of the warehouse is both seamless (does not interfere with the data mart applications), highly dynamic (so the data is refreshed in near real-time), persisted (ensuring a physical copy of calculated or aggregated data is available in the warehouse), and auditable (for data governance and regulatory compliance).

There are myriad opportunities to reduce costs within the IT department. The challenge is to develop innovative solutions that meet the requirements of data governance, security and accuracy, and still provide business users with the data they need to drive the company forward.

InformationWeek explores the meaning of "innovation"

InformationWeek VP and Editor in Chief Rob Preston's recent article previews an intriguing new micro-site about the broader aspects of innovation within corporations, namely the "convergence of customer-focused strategies and global networks." Contributors include University of Michigan's C.K. Prahalad and M.S. Krishnan, authors of the forthcoming book I'm eager to read called The New Age Of Innovation (McGraw-Hill). We'll explore implications of this movement on Finance Systems in upcoming posts, including something Bob Evans highlights from the book's introduction about the need for corporations to bridge the "significant gap between strategic intent and 'capacity to act'."

Enterprise software - hip again?

The previous post on finance innovators caught my attention. Early in my career, I helped document the journey of some of those same early adopters in BI and financial analytics—like Steve Beitler, former Controller at Sears, and his peers at companies like Blue Cross/Blue Shield of RI, Sealand (Maersk) and Lockheed Martin. I started reflecting on what helped their initiatives rise above the noise surrounding things like the Internet, AOL and cell phones in the '90s. Some argued BI, DW and financial systems lacked that cool factor back then, yet the enterprise solutions that startups were enabling for companies like Sears were grabbing headlines right alongside cool tools and gadgets.

It felt like déjà vu at a Red Herring magazine event this week. The entrepreneurs that converged on the soiree passionately described breakthroughs like wireless gas meters, on-demand Internet video TV without a PC (http://www.building-b.com/), mobile entertainment (http://www.mspot.com/) and a self-serve ecommerce site I like a lot called http://www.cafepress.com/. The energy and passion in the room brought me right back to my most recent stint at a venture-backed company that created collaborative technology for dynamic email applications.

Three prosciutto rolls later, I started to wonder…with all these hip ideas in new media and ecommerce, has enterprise software lost its cool factor? No sooner did conversations start to unfold with execs who are delivering interesting new enterprise solutions. Examples include a company that specializes in web-based task and project management (http://www.attask.com/), another that focuses on salesforce analytics (http://www.cloud9analytics.com/), and one that derives financial intelligence from data strewn across enterprise systems (http://www.staranalytics.com/, a company with whom I consult).


As the execs lobbed stories back and forth about their customers, it signaled that not only is innovation alive and well in the enterprise space, solutions are delivering real business value. Much like the time when Beitler and others made bold commitments to new platforms from startups, today's solutions are driven by customers who share their vision with vendors to help make their companies smarter and more competitive.

Conversations that evening helped me realize the tremendous impact and responsibility this community of entrepreneurs has during this unique moment in business. I walked away inspired by many promising young companies with solutions that aren’t just making our lives more enjoyable, our connections more meaningful and our contributions more lasting, they’re advancing technologies that help the corporations we work for, buy from and invest in operate more effectively based on timely, accurate information.

Now that’s pretty cool.

Integrating Information Across Vendor Applications

Whoever wins this week's performance management battle in the ongoing acquisition war, Doug Henschen's blog post (Intelligent Enterprise, 3/10/2008) is a direct reflection of one of the key issues that performance management customers face: While companies like Oracle and SAP buy up vendors and consolidate to strengthen and extend their market offerings and positions, their customers, many of which we share in common with these vendors, are involved in exactly the same process. The untold story from a customer’s perspective is that the mergers and acquisition strategies of vendors create enormous challenges for departments that are tasked with ensuring compliance, stability, and maintainability of critical systems and financial data. These customers have to synthesize duplicate applications and the requirement to integrate systems without disrupting workflow or degrading the integrity of data.

Performance Management systems hold some of the most important data in an organization - and key executives sign their names on dotted lines every quarter guaranteeing that the information is reflected accurately. The value of the information locked into source performance management systems drives the need to elegantly move data and metadata between performance management applications and reporting tools within the larger financial data warehouse.

Perhaps the concept of "unifying the full range of financial and operational processes in a single stack" should be reserved for that Utopian environment where there are no mergers, no acquisitions, no disparate systems, and no legacy applications. For customers in today’s global business environment, a solution that can move data, metadata and security out of these source performance management systems and into the larger financial data warehouse, where the information can be shared among a variety of vendor tools, as needed, is the hill that must be conquered in the vendor wars.

(cross-posted on Intelligent Enterprise)

Great Minds Think Alike

It seems that others are picking up on the concept of finance as an innovation center - CFO.com is holding a webcast next week on the following topic:

How the Finance Function Is Emerging as an Enabler of Innovation
Tue, Mar 18, 2008, 02:00 pm ET

If you can't view the webcast live they will provide a recording. See CFO.com to join the webcast or for more information.

The Inside Story of Financial Systems Innovators

In my career I’ve worked with and for many companies and I’ve met many different people, and one thing that I can say about them in general is that there are some who are true innovators in their professions. They view things with fresh ideas, they see solutions where others see only problems, they look at things that exist and instead of just accepting them as they are now, they come up with a better way of doing them. These are the unsung heroes of corporations everywhere. They are the people who are creating the future today, although in many cases nobody even notices what they do – except maybe that a web page loads a little faster, or a report has a little more useful data than it did before.

When it comes to finance systems – a subject near and dear to my professional heart – I see innovations like these all the time. Although a lot of money gets spent on the big, overarching, reengineering projects or enterprise application implementations, in many cases the return on such investments is marginal (or at least takes years to realize). It’s the simple, incremental changes that are often the most effective. Sometimes just a small shift in perception turns an existing concept on its head, and opens up a whole new vista of possibilities. Existing systems can be leveraged and improved in whole new ways perhaps by making just one significant (and often inexpensive) change. Such changes can be introduced to even large, staid organizations by just one visionary individual who sees what is possible and is willing to make it happen.

One example I can recall was a Director of Finance for a major retailer, who as part of his company’s reorganization of their financial systems architecture for Y2K introduced a small, insignificant product called Essbase into the mix. Despite some objections from his IT folks that it was not an approved standard product, and despite some technical challenges in integrating it with some of his legacy systems, he managed to make it the standard for financial reporting throughout the company. The value to his organization was immense, and the incremental cost a drop in the bucket of the overall system, and more than offset by the cost savings in consulting alone. By introducing this one, small innovation, he was able to radically alter his company’s financial systems for the better, and incidentally, became a rising star in both his company and his industry.

This blog is dedicated to those financial systems innovators – the finance system managers, enterprise architects, budget managers and others – who make those incremental changes possible, and to the innovations that they create. We will focus on telling the customer’s and end user’s story, and always anchor our posts with real-world examples. We will include both finance/business and IT/technical perspectives, as we want to help articulate both concrete value and practical implementations. Each month we‘ll select a different topic, and post different thoughts and ideas around it. If there’s a topic you’re passionate about, let us know and we’ll try to include it in future months. Also, if you’re interested in contributing (and we strongly encourage customer contributions), please contact us and let us know what you‘d like to post about. The list of upcoming topics will be constantly updated, so remember to check back often to see what’s coming up. Thanks for reading.