Enterprise Performance Management

Host Analytics: Where Planning and Performance Management Meet

Today we live in a new world where the Internet levels the playing field for small, mid-size and large enterprises, breaking down barriers to entering new emerging markets. And yet we also face new challenges with rapidly changing commodity prices, fluctuating exchange and interest rates and an accelerating pace of business across a global economy. Whether you are looking to grow and expand or just accelerate profits, you need a plan.

A recent Mint Jutras report posed the question: Is Planning & Performance Management a Marriage Made In Heaven? We concluded that having a comprehensive plan is the first step towards achieving any specific outcome. But to optimize growth and profits, that plan needs to be a living plan, capable of evolving as goals and business conditions change. The key to breathing life into your plan is to actively link it to enterprise performance management. While that might seem intuitively obvious, too often the plan simply goes on the shelf as you go about business as usual. To monitor, manage and predict performance against the plan, you need to marry the right solutions with the right data.

The tools available to help you succeed range from spreadsheets to suites of applications that also might range from simple, basic tools to comprehensive solutions built on modern, enabling technology. Host Analytics provides a comprehensive Enterprise Performance Management (EPM) platform that is simple and affordable enough for the small to mid-size enterprise, but comprehensive and robust enough to support a growing mid-size company as it transforms itself into a large enterprise. Delivering its solution exclusively as Software as a Service (SaaS), Host prides itself in offering an EPM solution you can’t outgrow.

The Right Mix

In our report, Is Planning & Performance Management a Marriage Made In Heaven? we found companies with World Class implementations use a more extensive set of tools to plan, monitor and manage performance (Figure 1). The tools shown in the figure below fall into four general categories: specific applications, reporting, analytics, and, of course, the ubiquitous spreadsheet. Host Analytics provides the first three as part of a comprehensive suite and also helps you control the inevitable use of spreadsheets.

Figure 1: Tools To Monitor, Plan and Predict Corporate Performance

Host Figure 1Source: Mint Jutras 2016 Enterprise Solution Study

Note that Mint defines “World Class” in terms of the performance of the implementation of enterprise software that runs the business. Survey responses are used to measure cost savings and other improvements since implementation, progress made in achieving goals and selected current performance metrics that can apply universally to any business. The top 15% in performance is categorized as “World Class” and the remaining 85% are referred to as “All Others.”

While its solution is quite comprehensive today, being a cloud-only solution allows Host Analytics to offer frequent enhancements and improvements through monthly maintenance releases and quarterly feature releases. Over the past year Host Analytics has delivered about 185 enhancements and announced some very strategic partnerships. Key investment areas include:

  • User Experience
  • Performance
  • Consolidation
  • Data integration
  • Planning
  • Modeling
  • Productivity
  • Analytics
  • Security

“We Speak Finance, not Klingon”

According to Dave Kellogg, Host Analytics’ CEO, “Our first language is finance.” Hence the applications delivered serve the office of finance. He goes on to clarify with, “We speak finance, not Klingon.” That tongue in cheek reference to the language of the alien culture encountered in the journey of the USS Enterprise (of Star Trek fame) is a subtle reference to competitors who speak only in the language of information technology (IT), which will mean little to the finance department.

As an interesting side note, the Klingons appeared in the original Star Trek series as enemies of the Starfleet Federation, but became allies in later generations of the entertainment franchise. We can only assume Mr. Kellogg is referring to Klingon in those later series because Host Analytics is actually quite IT-friendly, building on a modern technology foundation. Certainly IT is not viewed as the enemy, even if the staff does speak a different language.

However, Mr. Kellogg goes on to point out that while those in the office of finance might speak finance, they don’t care exclusively about finance. They care about the performance of all departments and disciplines across the enterprise. This is an important factor, and one covered in depth in our prior report. You need more than a financial plan. You also need an operational plan. This could potentially present a problem to a solution provider focused exclusively on the office of finance, which is why it weighs heavily in determining Host Analytics’ strategic approach to its product portfolio.

Focus, Partner and Unite

Mr. Kellogg described the company’s strategic approach at the recent Host Analytics World 2016. “We have three options to choose from. As a solution provider we could ignore the problem. But that would most likely mean the plan would be retired to a drawer and used only for executive compensation purposes. We could go a mile wide and an inch deep, attempting to build functional performance management applications for all functions. Or we could focus, partner and unite.”

Host Analytics chooses the third option, focusing on building financial apps and partnering with other companies that speak the languages of supply chain, manufacturing, services, marketing, sales, etc. Key to that decision: Host allows partners to build these apps within its Modeling Cloud. When they do, Host can bring the financial plan together with the full operational plan in a single cloud model. In doing so, Host is hoping to eliminate the need for “shadow finance” organizations that tend to spring up across the enterprise when departmental and functional needs aren’t met by a financial (only) plan.

Planning modules within the suite allow you to plan, budget, forecast and report all from one application. Modeling helps you create operational plans that align with financial plans. Multidimensional modeling helps you anticipate outcomes using financial and non-financial drivers. New dimensions can be added for granular “what if?” scenarios.

Analytics Tie It All Together: Think Quick and Qlik

Analytics are important tools in bringing the financial and operational plan together. In our prior report we noted that World Class implementations were 43% to 180% more likely to use various types of analytics.

Host Analytics has had a long-standing relationship with Qlik, who is also its customer. That relationship has now been strengthened and Qlik is embedded within the Host Analytics suite. No more exports from Host to Qlik required. Access and data is available in real time right from Host.

This partnership and integration brings data discovery and visualization tools to the Host Analytics suite. Pre-built dashboards can be easily tailored and configured by business users, adding a level of self-service and independence for the business user without over-reliance on IT. Presentation quality story boards can be created and integrated with Host’s Financial Package Publisher. The (combined) solution becomes browser agnostic (Windows and Mac), and fully supports mobile devices.

Direct integration with Host financial data comes right out of the box, but customers and partners will also be able to integrate other models and third party applications in order to mash up data from a variety of sources. Host has also expanded in-memory support and implemented incremental updates of data cubes and dashboards. Early results have yielded 50% to 90% improvements in performance across various planning and reporting scenarios.

Expanding the Circle: Workforce Planning & Analytics

While Host Analytics’ primary focus is on financials, it is not drawing a circle too tightly around finance. In fact it is expanding its boundaries to include an element of workforce management, including the delivery of workforce planning and analytics. Workforce planning is a logical extension of the financial plan since headcount determination and resulting costs are often included as part of the financial plan. The new analytics will provide improved visibility to headcount, compensation, benefits, open requisitions and other employee detail. But for more specific planning activities, such as incentive compensation planning, Host has chosen a partner that speaks that language. A partnership and integration with Xactly was also announced at Host Analytics World 2016.

How Does Host Analytics Stack Up?

We concluded our prior report with a checklist of sorts to be used in looking for a solution that effectively manages planning and performance management. So how does Host Analytics stack up?

  • Look for planning and performance management tools that complement each other. While Host positions itself as an EPM player, its planning and modeling capabilities are a good fit for many companies, particularly in the small to mid-size range. While the volumes very large enterprises must deal with might have over-taxed its solution in the past, the new in-memory capabilities might just address that.
  • Make sure you can connect your overall financial plan to your operational plan. Host Analytics focuses on the financial plan, but has recently expanded to include workforce planning. Partners are required for other operational plans, but the partnership and integration with Qlik should help bring it all together in the end, provided the necessary operational plans are available. Expect some setup work to be required if bringing together data from applications in third party applications, but those offered by certified Host partners should slide in more easily.
  • Select tools that encourage rather than prohibit collaboration. Host Analytics has embedded social collaboration with in-context discussion threads and activity streams and the ability to annotate a plan. Host has partnered with SocialCast, but also supports integration with other collaboration tools such as Slack and Yammer. In addition, new “reporting” capabilities also support export to Google Sheets and Google Drive and Host will continue to build out this integration for bi-directional updates.
  • Consider a cloud approach. Host Analytics’ solution is delivered entirely and exclusively as Software as a Service (SaaS).
  • Evaluate not only the traditional desktop/laptop user interface but also the overall user experience, including the ability to support the mobile executive, on the device(s) of choice. Ask for a demo to evaluate the overall User Experience. Host is browser agnostic and adapts well to various devices.
  • Look for solutions that play well with others. Host has designed its solution with this in mind. But don’t be afraid to ask for specifics on your own configuration of solutions.
  • Work with your information technology (IT) staff, but seek a level of independence in the planning and performance management process itself. Think of your most complex test case for planning/modeling. For example, do you need driver-based planning? Host Analytics supports it. But does Host support all the methods and/or algorithms you might need? Make sure you ask. With the embedding of Qlik, data discovery and visualization took a giant leap forward, but always ask for a test drive. It’s one thing to watch an expert make the software sing and dance. How does it look and feel and how flexible is it when you are in the driver’s seat?
  • Understand clearly what kind of reporting and analytics are available right out of the box. Same as above: look at the demo but the proof of tailor-ability is in doing. Again, ask for a test drive.
  • How much data can the solutions handle? How fast can they process it? Host now supports SQL Server 14, which provides new in-memory capabilities. In addition, Qlik dashboards preload all data needed into memory. This combined with the ability to incrementally update reporting cubes and dashboards provides good support for high speed, real-time access to data.

Conclusion

Host Analytics’ claim to be a leader in cloud-based enterprise performance management (EPM) is valid. Its platform of financial applications for modeling, planning, consolidation, reporting and analytics effectively marry the planning and performance management activities in companies from small to large. While Host “speaks finance” it has also created a platform on which partners that speak other functional languages (supply chain, sales, marketing, etc.) can add their own value. Together with those partners, along with its special partnership with Qlik, the happy couple expands to become a true blended family.

If your current financial plan sits in a drawer for the majority of the year…

If you can’t align your financial plans with your operational plans…

If you are struggling to make sense out of a collection of spreadsheets…

If you find yourself in fear of mistakes buried in those spreadsheets leading to bad decisions…

You owe it to yourself to look for a new solution that can help you plan, monitor and manage your performance. But of course, only if you want to maximize your opportunity to optimize growth and profits.

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Is the World Ready for SAP EPM 10.0?

Unified – Comprehensive – Transformational

On May 16, 2011 at SAPPHIRE® NOW in Orlando, Florida, SAP  announced the latest version of its enterprise performance management (EPM) solutions. The 10.0 release represents the culmination of a journey that originated four and a half years ago as SAP began to assemble a broad portfolio of products, beginning with the acquisition of Pilot Software and Outlooksoft. Later, in 2008 the merger with Business Objects expanded this portfolio and in June of that year SAP announced a longer term road map. Release 10.0 is the last major milestone of that journey in delivering a suite of products that SAP describes as unified, comprehensive and transformational.  The goal of 10.0 is to “move EPM best practices beyond the finance department to managers throughout the company, helping people make risk-aware decisions that positively impact enterprise-wide performance.” The tools are now in place, but are companies ready and willing to be transformed?

A Bit of History

Effective management of enterprise performance, by its very nature, is dependent on consolidating data and providing visibility. An EPM application can never be effective as a completely stand-alone function. The better it can consolidate data and present it in the proper context, the more effective business execution and decision-making. Therefore the journey of SAP’s EPM solution covers a lot of ground.

The first stop on the journey was Release 7.0, which was delivered in August 2008. This first release honored prior commitments to enhance functionality and incorporated the underlying technical architecture of NetWeaver. Specifically 7.0 focused on ERP and NetWeaver and NetWeaver Business Warehouse (BW) integration into legacy SAP applications (Business Planning and Consolidation and Strategy Management).  It also delivered Business Intelligence (BI) integration into legacy Business Objects applications (Financial Consolidation and Profitability and Cost Management). 

Release 7.5 followed later and was the first to bring the various components of the portfolio together as a suite of products, adding integration of SAP applications and BI. Then Business Objects applications were optimized for ERP (often the source of the transactional detail upon which decisions are based), NetWeaver and BW. EPM 7.5 also introduced cross-application scenarios between EPM and Governance, Risk and Compliance (GRC). But the various components were still separate applications, although with “best-of-breed” integration.

Keeping this all straight is tricky and somewhat confusing, but also reveals the extended scope of the task at hand. EPM 10.0 brings to fruition a true suite, making the heritage of each component a non-issue. The suite brings a harmonized user interface across all components, along with next-generation productivity tools. In addition to the development efforts specific to EPM, it also leverages development efforts from other parts of SAP:

  • In December, SAP launched the SAP® In-Memory Appliance software (SAP HANA™). HANA is now the technological root of everything SAP develops. The message of HANA was always about “big data”. Indeed it allows people to analyze huge amounts of data in real time even at the lowest level of non-aggregated detail. But customer examples highlighted at SapphireNow prove it is also about speed: Examples like reducing the time to retrieve data from 77 minutes to 13 seconds or from 8 hours to instantaneous.
  • In February, SAP launched the culmination of three years’ development in BI and enterprise information management (EIM) software. These were critical components of the of SAP® BusinessObjects™ analytic applications which started rolling out in the fall of 2010 and continue to be built out for specific functions and industries.  Strong BI tools are important but applications ready-built with these tools are more easily consumed by the audience for EPM – namely executives in charge of strategy and execution.
  • In March, SAP launched GRC 10.0 -solutions to help organizations move GRC practices out of the hands of a few so everyone in the organization can participate in mitigating risk and increasing corporate compliance. In concept and practice these functions should be attached at the hip to performance management.

So given this firm foundation built over the past four and a half years, how does SAP substantiate its claim of unified, comprehensive and transformational?

Unified

Unification in EPM 10.0 goes beyond the harmonization of the user interface across the various components of EPM. Yes, a shared user experience does indeed reduce learning curves and a familiar look and feel reduces the intimidation factor of something “new.” But equally important is the unification of EPM with other tools, including NetWeaver and ERP as well as desktop productivity tools. Indeed Microsoft Excel has become a universal management tool, often in place of or in spite of applications that are implemented.

Exporting data from any application to a spreadsheet has become basic functionality that is expected of modern enterprise applications, as is using spreadsheets to import data. But EPM 10.0 goes beyond this simple extract and Excel essentially becomes the user interface.

Several early customers of EPM 10.0 expressed this as one of the major benefits and also key to user adoption.

Case in Point: Under Armour, Inc.

David Roberts, senior manager from Under Armour points out most business professionals have had some exposure to ERP, which provides much of the content for performance management. “But there are a host of ERP players, and there are often very distinct differences and a steep learning curve in moving from one to another. But if the user interface is Excel, even kids right out of college know it and use it. In fact that is how we have built our Business Analytics Team (BAT). It consists of a bunch of kids out of college. We take them from all departments and teach them to collect and analyze data. BPC [SAP BusinessObjects Planning and Consolidation] is the tool used most because they have the skills to use it. We expand their knowledge, taking advantage of add-ins. [EPM can become an add-in to Excel.] User adoption is driven by the fact that it looks so easy. In fact that can become an Achilles heel. As they see it do so much, they want it to do everything.”

Who is Under Armour?

Under Armour is a sports clothing and accessories company, providing high-tech sports gear to professional and collegiate athletes in addition to offering its product lines in retail locations. In 2006 the company expanded its offerings to include footwear in 2006; it continues to expand those  offerings, announcing its first line-up of basketball shoes in Fall of 2010.

Under Armour is a publicly traded company (NYSEUA)with revenues in 2009 of $856 million and 2200 employees.

www.underarmour.com

Data can also be easily dragged from EPM to Microsoft Word or PowerPoint documents (Word and PowerPoint plug-ins are available as well), thereby saving time and effort in the effective communication of results.

While many in the finance department may be content to reside in and communicate via spreadsheets all day, it is also possible to construct personally tailored views that bring in other content, not only from SAP enterprise applications, but from the Internet as well. One could easily construct a dashboard from which 90-100% of the day’s activities, including e-mail and social media outlets, could be conducted.

 

Comprehensive

Indeed, while Excel has become an almost universal “language” for the finance team, it is not just finance that EPM 10.0 is meant to “speak” to. SAP’s BusinessObjects EPM solutions are generally recognized as delivering one of the most complete and mature sets of solutions for the office of the CFO, including strategy management, planning, budgeting and forecasting, financial consolidation, and profitability and cost management. In addition, SAP added a Disclosure Management application to help companies go the last mile in finance in producing accurate and timely financial statements.

But SAP intends for EPM 10.0 to reach beyond the finance office, targeting key decision makers in other functional areas of the business, including supply chain management, procurement, sales, manufacturing and demand planning. The new EPM release powers newly launched SAP BusinessObjects analytic applications designed for role-specific users in a variety of industries and lines of business. These offerings are quite diverse, ranging from risk reporting in banking to trade promotions for consumer products to upstream operations performance analysis for oil and gas or intellectual property (IP) rights analysis for the media.

Across the SAP BusinessObjects portfolio, the 10.0 release encompasses new offerings such as SAP® BusinessObjects™ Sales and Operations Planning. It also further enhances previous releases of the SAP® BusinessObjects™ Spend Performance Management and SAP® BusinessObjects™ Supply Chain Performance Management.

While these specific applications naturally extend to other functional areas such as procurement and supply chain management, at least in some of the early adopters, the planning and overall corporate performance activities of EPM 10.0 haven’t made it too far past the finance department. These early adopters all point to the Excel interface as a means of user engagement. But not all walks of life live and breathe Excel. In some cases perhaps the finance department, which generally owns and runs the solution, isn’t willing to open the doors. Or perhaps the overwhelming volume of data, coupled with the growing complexity of dependencies and data relationships is enough to scare many away. While dashboards and user interfaces have become increasingly tailor-able, often executives simply don’t know where to start.

And the volume is not about to decline any time soon. In fact it only stands to grow and may even grow exponentially. While HANA is certainly capable of responding, interestingly enough, the majority of the testimonials to date have been by CIOs. So making this happen still requires an underlying understanding of how the data and the applications are organized. Without being led by the hand, most executives will simply not venture down the path. Simplification and contextual cues are keys to bringing the proverbial horse to water.

Transformational

Which leads us to the final adjective SAP uses to describe EPM 10.0. Through unification of a comprehensive portfolio, SAP has put the power of transformation within reach of enterprises today. Functional components support risk-adjusted planning. In-memory computing has the potential to open new doors to companies in leveraging massive volumes of data for planning and decision-making, potentially making them more agile and responsive. New user experiences transform the way people interact with applications and data and expand views beyond the structured data within applications like ERP.

But top level executives have traditionally been hands off in terms of going to directly to the source for data. However, trends in mobility may be just the catalyst needed to prompt better engagement. EPM 10.0 includes applications for the iPad (by Apple) and the Playbook (by RIM). With the advent of newer devices that are easy to carry, even easier to use and allow for more graphical visualization, executives are increasingly going mobile and using those devices for more than email and phone. In a way, these unwired devices are tethering them more closely to the business. But the limited real estate on these devices, even on tablets, and the perspective of being “on the move” will force a cleaner approach to communication and perhaps reinforce the KISS principle – keeping communication short and simple.

In today’s global economy, where markets and technology are changing at supersonic speed, where we are bombarded with noise and drowning in data, transformation may be necessary for survival. Keeping it simple will become even more difficult in achieving the goal that David Roberts has set for Under Armour with its EPM 10.0 deployment. David asks, “How do I answer the question I don’t know to ask?”

Indeed EPM 10.0 has the power to transform the business into an efficient, risk-aware, performance-driven culture, but only if the enterprise is aware of the possibilities and open to transformation. Many have a long way to go.

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