BI, CPM and budgeting survey 2011

By Michael Burns

Welcome to our 2011 survey on corporate performance (CPM), budgeting and business intelligence (BI). When we ran our first BI survey back in 2004, it was all on its own. But surveys have a way of morphing from year to year, gathering and discarding functions and products as they go. So it is that by 2006, our BI survey had been more or less taken over by corporate performance management (CPM). Now, in a further evolution, our roundup encompasses both products, plus budgeting.

Where are the differences? Broadly speaking, CPM includes both BI and budgeting. But there are also many standalone systems for budgeting and BI. In terms of separate functions, CPM systems include forecasting, consolidation, financial reporting, strategic planning and budgeting. BI includes dashboards, online analytical processing, predictive modeling, report writing, scorecarding and visualization (graphics).

As with our latest ERP survey in September 2010, you can now complete an online survey about your requirements, then view the 10 best systems for your needs based on percentage fit calculations. You can also drill down for more details on each system. For the link to the survey, visit the online version of this article.

Since our last survey in December 2009, a number of trends have emerged. First and foremost, products are becoming easier to use. We have all seen systems that have become prickly to use because of an overabundance of features. They require power users to make them work. But Google changed the way we think about systems. The company’s success is due in part to its ability to keep things simple so that anyone can effectively use its system. Its approach allows end users to generate their own reports or analyze data with drag, drop and drill-down commands — something that in professional circles is called BI for the masses.

Keeping it simple is not just about the user interface; it’s also about the underlying technology. Some vendors offer extensive functionality but they have done this by acquiring new products and gluing the disparate systems together. Although these systems are integrated, they may rely on different databases and have different user interfaces. You will hear some vendors promoting their unified systems, which use the same databases and user interfaces, as a simpler solution.

Another trend is to bump up performance by taking advantage of declining memory prices and low-cost 64-bit computing to provide more addressable memory space. It’s much easier and faster to access information in memory than in a disk.

Some vendors are now offering Google-like information searches that include structured data (organized logically as fields in database tables) as well as unstructured data that could be in notes, documents and email.

Cloud computing makes it easier for smaller companies to invest in BI without having to worry about supporting the accompanying IT infrastructure. Cloud computing has caught on for some software products such as CRM but there is still some reluctance about having sensitive information kept off premises.

Users often tell software developers that their systems are data rich and information poor. They can’t easily get at the information they need. Developers build reports for their users but changes are always required. Many developers have arranged with BI vendors to imbed their tools in their applications.

Many companies go through hoops to get their budgets and forecasts completed. The usual method is to send Excel templates to various department heads, who eventually send their updated budgets or forecasts back for merging with corporate. This is a labour-intensive process that inevitably gets done poorly. Today’s budgeting and forecasting tools automate the steps. They include an approval process, status tracking and driver-based budgeting, in which assumptions (drivers) can be used in the calculations. There is also a move toward using statistical algorithms to help with the forecasts, as evidenced by IBM’s acquisition of predictive analytics market leader SPSS in 2009. IBM also owns Cognos, which is one of the leading systems in CPM and BI.

Collaboration tools let BI users share and discuss information with annotation or online discussions. A workflow engine can also be used for alerts and approvals. One problem with standalone CPM, BI and budgeting tools is that there may already be a workflow engine in the ERP system and it would be painful to implement two different workflow systems.

Beyond all the trends and technicalities, there is one principle that has always applied to CPM and BI: these systems are recession proof for their developers. Organizations will invest in tools to make better decisions in both good and bad times.

As with all our surveys, we were unable to validate the information supplied to us by the vendors. We don’t think there will be that many intentional mistakes, partly because the vendors will lose credibility if they are caught making false claims.

Michael Burns, M.B.A., CA•TI, est président de 180 Systems (www.180systems.com), cabinet-conseil indépendant dont les services comprennent notamment l’analyse des processus, la sélection de systèmes et la constitution de dossiers justificatifs. On peut le joindre au 416-485-2200 ou à mburns@180systems.com.