Consolidation in the SEM/Corporate Performance Management (CPM) Technology Sector A market report, March 2004 IT software companies have been hit by the recent economic downturn. Many analysts are now predicting that this is over, mainly thanks to the upturn in corporate spending on IT. During this time many companies have downsized, some have restructured. Now many need to keep up with customer demand and believe that they must grow quickly in response to the perception that companies want to deal with a fewer number of large technology suppliers. The answer so far has been consolidation. Many of market leaders including Hyperion, Comshare and Cognos, and ERP vendors such as SAP and Peoplesoft were feverishly acquiring during the dot com days. We now appear to be in round two; Oracle’s hostile takeover bid for Peoplesoft being one example. As with consolidation in any industry, the smaller firms tend to be bought by the larger companies with the general exception of some niche/specialised players. Not all mergers and acquisitions have conformed to this trend however, with large market rivals Peoplesoft acquiring JD Edwards, in part as a action to defend itself from take-over from Oracle. During the first round of acquisitions, it was no longer seen to be good enough just to specialise in one area (e.g. Oracle’s recognition for their database management system). To increase market share, some vendors are increasingly able to offer clients a wide range of services and modules so they are seen to provide comprehensive CPM suites and/or provide services over and above the CPM market. In response to this, Oracle now offer e-business suites and outsourcing among many other products and services, which are also available from many of Oracle’s competitors. It is also important to note the market space described as SEM in 2000/01, has been coined CPM by Gartner, the research group. CPM is also synonymous with the term Business Performance Management. Gartner describes CPM as an umbrella term that describes the methodologies, metrics, processes, and systems used to monitor and manage an enterprise’s business performance. In their October 2002 research ‘Introducing the CPM Suites Magic Quadrant’, Gartner classified four types of vendor within the CPM/SEM area: integrated business application suite vendors, BI vendors, Best-of-breed vendors, and Hybrid vendors. Each of the different types of vendor approach the market in different ways. The integrated business application suite vendors (such as Oracle, SAP and Peoplesoft) dominate the transactional environment and now attempt to appeal - to existing customers in particular - with business intelligence offerings. These vendors have created and are expanding their own offerings to improve the drill down and analysis of information systems and platforms to produce better reporting. Some of the ERP vendors will promote these as Best-of Breed and can fit into CPM architecture like the one depicted below:
CPM/SEM architecture highlighting the BI Analytic Applications Balanced Scorecard (BSC).
Activity Based Costing / Management (ABC/M).
Other Business Intelligence Analytic Applications: including Data Mining and Data Visualisation.
Shareholder Value Metrics. Benchmarking Techniques.
External Databases and Internet.
Data Warehouse
Enterprise Resource Planning System (ERP).
Other Legacy Systems.
The BI Vendors (such as Hyperion, Cognos, Business Objects) are active in this space on the basis that they have an opportunity with their BI software to support key management decision making processes such as planning, reporting and consolidation. Additionally, they can more widely integrate with the transactional platforms and applications that companies have deployed. An example of this is SSA’s CPM suite that incorporates Cognos’s BI suite. Best-of-breed vendors (such as Cartesis) are finding that the use of CPM/SEM systems can offer increased opportunities as their applications can support specific management processes although these will have to integrate with third party platforms and applications. The Hybrid vendors, who are not covered in this report also take up a niche position and are in competition with the BoB vendors. Unlike BoB vendors many of the hybrid vendors have their own technology platform. Understanding the technology on offer Broadly, a good way to view vendor products or services is in the context of whether organisational data has been pooled using an enterprise resource planning solution. Most companies involved with the CIMA SEM Round Table support decision making and management processes at an operational level using analytical solutions plugged into an existing transactional platform such as ERP. No one vendor 2
provides technology tools and applications to support operational processes and decision support at a management level and end user reporting. Specific point solutions are used to help organisations with challenges including: • • • • •
Improving annual planning and budgeting and developing business planning and forecasting capabilities Understanding business cost dynamics Improving month end management reporting Customer and market analysis Better performance measurement based on Scorecard type designs to ensure measures are linked to strategy and key performance drivers are understood
Our experience from CIMA SEM Round Table discussions is that the benefit of many technology tools and point solutions tends to be restricted to improving the effectiveness in performance management processes involving the following information consumers: front-line workers, management and external stakeholders. Improving information and analysis to facilitate executive decision support is a different matter. Poor information for planning, direction setting (particularly in terms of managing for value) and forecasting can be put down partly to an inadequate technology architecture. However, improved strategic planning is difficult where there is a lack of understanding of the type of decision support required at this higher level and where there can be an over emphasis on using information for tracking and control purposes. Improving executive management decision processes should not operate outside a strategy for the role of the finance function. The ultimate aim of the CPM/SEM technologies is to create an environment that has decision support and business intelligence at its core but the context should be within the specific business problems that need to be addressed. This should include defining specific questions at executive level and the type of analysis and interpretation to support these.
The technical nature of the CPM/SEM space is summarised in the diagram below:
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Analytical application systems Scenario modelling
Activity-based costing
Planning & budgeting
Customer profitability
Data mining
Risk analysis
Financial analysis
Visualisation
Text analysis Consolidation
Balance d scorecard
Spreadsheets
Two-way communication
Data warehouse
Extract, transform & load
Source systems (internal & external)
Some organisations do not deploy an ERP approach because of a perceived lack of functionality for some organisational users. Instead, they and deploy the BoB applications and point solutions for a particular need, for example in budgeting and planning, HR management, etc. While some companies feel that they may have a strategic commitment to one of the ERP vendors, there are a number of CPM offerings in the market, for example the business intelligence (BI) platform and application vendors. The crucial issue for all organisations remains securing the best fit between business need and a vendor’s CPM/BI product offering and that they can integrate with the current enterprise wide ERP/BI information systems architecture if they have one. A key challenge specifically for organisations with a transactional technology platform is understanding and managing the risks involved with integrating another vendors’ BoB or hybrid application with their own ERP platform. The aim of creating a seamless information platform where data analysis is based on the data integrity needed for decision support analysis could end to be more expensive and complex than anticipated. The changing nature of the CPM/SEM market The diagram below shows how the recent acquisitions have broadened companies’ product range. The background colour will represent a company’s core product e.g. Peoplesoft’s core product is Human Resource Management. Please Note: The diagram is not to scale and is based on the last five years acquisitions as researched from the company’s own website and the Lexis Nexis service. It should only be used as a guide. For further information on the SEM/CPM technology sector:
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Visit Gartner’s website www.gartner.com
For more information on the types of software tools available for improved analysis: •
Try reading Strategic Enterprise Management Systems, Tools for the 21st Century, Fahy M, CIMA Publishing http://books.elsevier.com/uk/accounting/uk/subindex.asp?isbn=1859714943 &country=United+Kingdom&community=accounting&mscssid=9X7PSUD4SM T98JPW4CGTU9L5FB5XBCJ5
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The CIMA view of the SEM/CPM Vendor’s recent Acquisitions
Key Red – Business Collaborative Suite Green – Additional Industrial Sector specific software Orange – Improvement of Online applications Turquoise Blue – Planning and Decision Making Dark Blue – Business Intelligence Black – Generalist Yellow – Human Resource Management Grey – Geographical Acquisition Purple – Procurement Light Blue – Supply Chain Management White – Database supplier
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1 – SAS 2 - CorVu 3 – Hyperion 4 – CODA 5 – Geac 6 – Business Objects 7 – Oracle 8 – SSA GT 9 – Microsoft Business Solutions 10 – Cognos 11 – SAP 12 – Peoplesoft 13 – ALG Software 14 – Cartesis The diagram shows how recent acquisitions have broadened software vendors’ product range. The background colour will represent their core product (as presented on the vendor’s own website) with the exception of MBS, which provides a range of business software. For example, Peoplesoft’s core product is Human Resource Management and they through recent acquisitions have acquired additional sector specific software and capability in supply chain management, business intelligence and procurement. For more information on which companies have acquired who please visit their separate page in this section. Notes to the diagram: The diagram is not to scale (so does not represent the size of market presence of the acquisition itself) and is based on the last five years acquisitions as researched from the company’s own website and desk research. It should only be used as a guide to the nature of this market and key vendors. Microsoft Business Solutions has been defined as a generalist because it is the latest entrant to the market, with no clearly defined core aim in the CPM space.
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SAP <www.sap.com> Company Overview
SAP was formed in 1972, with a vision to produce business collaborative solutions for all industries. SAP’s headquarters are based in Walldorf, Germany, and has arguably become a market leader in enterprise wide software. SAP is now the third largest independent software supplier in the world (Reference www.sap.com) Acquisitions •
Campbell Software (November 1998) The acquisition of Campbell Software has improved SAP’s ability to provide software offerings in the Retail Sector.
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PAI Inc (December 2000) SAP acquired PAI Inc to help them develop their own CRM system.
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Infinite Data Structures (May 2001) SAP improved further their CRM & TRM capabilities with the acquisition of IDS
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Top Tier (May 2001) SAP rounded off a busy month by acquiring the portal software company Top Tier.
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Top Manage (March 2002) To gain a foothold in the SME market SAP acquired Top Manage.
Current Product Offerings
The mySAP business suite offers a complete jigsaw of product offerings, irregardless of a company’s size or industry. SAP’s enterprise software suite comprises analytical applications, one of which is called SEM. mySAP Financials mySAP ERP Previous Clients Include: • • • • • • •
Bombardier Christian Hansen The Coca-Cola Company Eurotunnel Royal Mail Siemens AG South African Breweries Ltd
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Peoplesoft <www.peoplesoft.com> Company Overview
Peoplesoft was formed in the mid 1980’s by Dave Duffield & Ken Morris when they created their first Human Resources module. Peoplesoft is now the second largest enterprise application provider with a turnover, since its takeover of JD Edwards (Reference www.peoplesoft.com) Acquisitions •
Intreprid Systems (June 1998) Peoplesoft gained the possibility of expanding their customer base with this acquisition. Intreprid Systems was a retail management solutions specialist.
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Distinction Software (January 1999) Peoplesoft continued their product expansion plans by adding supply chain management company Distinction Software.
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Vantive (February 2000) In an increase of their product base Peoplesoft acquired Vantive, a CRM specialist.
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Skills Village (May 2001) With the continued development of internet solutions and internet shopping, Peoplesoft acquired Skill Village for its knowledge of E-Procurement.
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Teamscape (September 2002) The acquisition of Teamscape (a Human Resource Management specialist) provided further enhancement to Peoplesoft’s HR expertise.
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JD Edwards (July 2003) The first major acquisition in new acquisition phase has seen Peoplesoft not only acquire more products but most importantly, larger customers base with a new ability to cross-sell their products.
Current Product Offerings
Peoplesoft have two products lines: Peoplesoft Enterprise and Peoplesoft Enterprise One (this encompasses the JD Edwards products that are similar to those of Peoplesoft). The most relevant product covering the SEM space is Peoplesoft’s Enterprise Performance Management suite. Previous Clients Include: • •
Harris Bank Sprint
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Oracle <www.oracle.com> Company Overview
Oracle was formed in 1977 by the infamous Larry Ellison. Oracle was formed to turn the prototype of a relational database that Ellison, Oates, and Milner had begun to develop and turn it into a commercially viable product. Acquisitions
In order to turn from being known just as a database provider into an enterprise wide solution provider, Oracle has used a different acquisition strategy than its competitors. •
Thinking Machines Corporation (June 1999) The acquisition of TM Corp helped Oracle continue their work in Data Mining, and continuing their battle with the Business Intelligence providers.
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Geodan EDT BV (June 1999) The second completed acquisition in a month saw Oracle increase their presence in Europe. Geodan is a scheduling and planning specialist.
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Tinoway International (October 1999) In their second raid on Dutch companies Oracle acquired Tinoway International, a CRM company.
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Carleton Corp ( January 2000) Oracle’s acquisition of Carleton (an e-business suite company) has given them added knowledge into the creation and maintenance of e-business suites.
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Expanxion Software (December 2002) This acquisition appears to help Oracle in two ways; it enables them access into the automobile market (maybe even more importantly EDI), and also improves their customer base in Europe.
Current Product Offerings
Oracle is primarily a relational database provider, however due to its recent acquisitions it is now able to offer quality business intelligence, integration, ERP and CRM modules. Most of these products are available under their E-Business suite which is their first enterprise wide system, exploiting web functionality successfully. Oracle also offer outsourcing services including, the outsourcing of disaster recovery for its E-business suite (for other outsourcing options please visit (www.oracle.com). Previous Clients Include: • •
Atari BAE Systems 10
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Compass Group Lloyds TSB Sony Corporation University College London Hospitals Microsoft Business Solutions
Company Overview
Microsoft Business Solutions is a subsidiary of Microsoft Corporation, it enables Microsoft to cross-sell their products to people who use their OS system at home, and trust that their business products will be of the same high standard. Acquisitions •
Great Plains (February 2001) The acquisition by Microsoft of Great Plains has enabled then to increase their customer base, as they now have business performance products tailored for the SME market.
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Navision (July 2003) The second acquisition by MBS, purchased to compliment Great Plains.
Current Product Offerings
Microsoft offers many products under their Business Solutions header to compliment their O/S (in full) and servers, although these are not required to run on all of their products. MBS don’t, unlike other vendors, specialise in any one particular area (e.g. Business Intelligence or Performance Management/Measurement). MBS houses a complete range of products for any business regardless of size. For all products offered by Microsoft please visit http://www.microsoft.com/businessSolutions/Products/productOverview.mspx •
Great Plains A product acquired by Microsoft to add to their ‘family’, which can be used to improve the efficiency of the business processes in both the lower midmarket and the more complex upper mid-market.
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Navision Navision provides customisable business solutions for SME’s as well as allowing integration with the rest of MBS’ products
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Customer Relationship Management Microsoft also has a CRM system available for customisation.
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Previous Clients Include: • Bell Group • Network Engines Inc • Philadelphia Eagles • Seattle Supersonics • Starpoint Health • Tecniflex
SSA GT <www.baan.com> Company Overview
SSA Global was founded in 1981, with it’s headquarter base in Chicago, USA. It was originally formed to create Business Planning and Control Systems. Acquisitions •
Max International (April 2001) SSA’s acquisition of Max international continues their commitment to industrial sectors such as manufacturing, and service distribution.
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Infinium Software (December 2002) The acquisition by SSA of Infinium deepens their reach into the manufacturing sector with the addition of strong financial and human resource applications.
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Ironside Technologies (June 2003) The acquisition by SSA of Ironside Technologies (a supply and buy-side ecommerce specialist) conveys their thoughts on the importance of ecommerce and its uses in business.
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Elevon (July 2003) SSA’s acquisition of Elevon will have advanced its’ portfolio of e-commerce and collaborative software, especially in the manufacturing sector.
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Baan (July 2003) SSA’s acquisition of the Dutch ERP company may improve its product base. SSA however, is still prepared to support the older Baan programs something no heard of normally as the cost synergies are much less than originally planned.
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EXE Technologies, Inc. (Dec. 2003) SSA’s acquisition of EXE Technologies may improve the Supply Chain Management and functionality of the SSA group of technologies.
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Current Product Offerings
SSA GT has many product offerings within this space, covering almost every industry. Only the most relevant products to the SEM/CPM space are included (please visit their website for further information or click their name). SSA Corporate Performance Management is their offering, which comprises of SSA Financial Management and SSA Human Capital Management.
SAS
<http://www.sas.com/> Company Overview
In 1976 the SAS Institute was formed in Raleigh, N.C, USA, with the vision of providing superior software for decision making. SAS has nearly 10,000 employees in 200 offices around the globe. Acquisitions •
Dataflux (June 2000) The acquisition of Dataflux will give SAS products the ability to ensure that data within their programs is consistent and correctly recorded.
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Intrinsic (March 2001) SAS has acquired the UK based company Intrinsic to add the management of marketing campaigns to its product base.
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ABC Technologies (March 2002) The acquisition of ABC Technologies will add both activity based financial management with the added benefit of scorecard expertise, to the BI platform of SAS.
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Verbind (November 2002) SAS acquired some further analytical CRM tools from this transaction.
Current Product Offerings SAS’s product range is based around their expertise in Business Intelligence and analysis. Their have many industry tailored products including; Healthcare, Financial Services, and Retail. Previous Clients Include: • • • • •
AutoTrader.com Barclays Bank Kraft Sheffield Hallam University US Air Force
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Hyperion <www.hyperion.com> Company Profile
Hyperion has its headquarters in California and further representation in another 20 countries. They are world renowned for their Business Performance Management software. Hyperion currently combines many of their applications through the Business Intelligence suite to help its 9,000+ customer base. Acquisitions •
Sapling Corporation (May 1999) Hyperion’s acquisition of Sapling Corp may have bought extra analytic applications in the enterprise performance management suite. It will also provide Hyperion with added ABC and Performance Management expertise.
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Brio Software (July 2003) The acquisition of Brio software may bring easier to use query facilities and extra reporting capabilities to Hyperion’s product range.
Current Product Offerings
Hyperion’s forte is in Business Intelligence software and Performance Management which their product range is based around. Hyperion’s complete product range appears highly relevant to anyone searching for Business Performance software. Previous Clients Include: • • • • •
Capital One IBM Miami Dolphins Motorola Yorkshire Water CODA <www.coda.com>
Company Profile
CODA is owned by CodaSciSys Group with its headquarters in Harrogate, UK. CODA provides ‘strategic financial intelligence’ built around its global accountancy software package CODA – Financials. Acquisitions
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SquareSum (December 2002) CODA’s acquisition of SquareSum improves extra functionality to their customer (both current and potential) in the SME market.
Current Product Offerings
CODA spilt their products into two types, Transactional and Analytical. Their analytical products cover business intelligence such as CODA – Intelligence, and also cover strategic planning (CODA – Planning). The transactional products do exactly as their name suggests as they deal with the transactional processes and activities that take place within a company, for example e-finance covers the accounting processes that are required in a company on a day to day basis. Previous Clients Include: • • • •
Cornhill Liverpool John Moores University Kookai Virgin V Shop Cognos <www.cogons.com>
Company Overview
Cognos founded in 1969, now employs more than 3,000 people with over 22,000 customers in over 135 countries. Cognos is a supplier of business intelligence and performance planning software for any enterprise regardless of industry sector. Acquisitions •
Interweave (September 1998) Cognos’ acquisition of Interweave has enabled them to improve on their Business intelligence product by offering the added functionality of the internet.
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Adaytum (January 2003) Cognos’ acquisition of Adaytum is in many ways similar to that of the Peoplesoft/JD Edwards merger in that, it enables the buyer, to improve their product offerings with the added knowledge that there is now an improved planning module.
Current Product Offerings
Cognos are very focussed on offering enterprise wide solutions, as integration capabilities to entwine other offerings from its competitors, for example Peoplesoft and Oracle.
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They have decided to adopt the term Corporate Performance Management (Created by Gartner) instead of SEM. Cognos have four product lines in their enterprise wide suite •
Enterprise Planning Series This product range covers the planning needs of an organisation as well as a range of control and consolidation features.
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Enterprise Scorecards This product helps with metric management within a company.
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Enterprise Business Intelligence Cognos’s business intelligence suite – enables the use of many analytical applications including a dashboard.
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Enterprise Framework Services The integration software that is needed to run other Cognos products whilst using competitor’s software e.g. a competitors ERP systems.
Previous Clients Include: • • • • •
American Airlines BMW Greene King Pub Company Prudential Ricoh UK Cartesis <www.cartesis.com>
Company Overview
Cartesis was founded in 1990 to develop and market financial management software. It was spun off by the Vivendi Corporation and purchased by PricewaterhouseCoopers, in 1999. In February 2004 Cartesis was purchased by a consortium lead by Apax Partners. This will give them a platform for expansion into the whole Business Performance Market. Due to this recent change in management we expect there to be changes and improvements announced. We will be updating this Cartesis section as soon as those developments are released. Current Product Offerings
Cartesis has two product lines – The Cartesis Suite, (their main focus) and Dedicated Applications.
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Dedicated Applications covers Cartesis SECAM+ which is used to help companies deal with the ever increasing legal framework, within the UK and mainland Europe. The Cartesis Suite is split into three sections; Cartesis Magnitude (An integrated web based solution for consolidation and performance management purposes), Cartesis Inter-company Server (Which enables faster peer-to-peer reconciliation), and finally Cartesis Magnitude Planning module (designed to take care of all the budgeting, planning, and forecasting decisions that are required). Previous Clients Include: • • • • •
Air France Aviva Plc BNP Paribas Group France Telecom Unilever Business Objects <www.businessobjects.com>
Company Overview
Business Objects was founded in 1990 as a Business Intelligence vendor, with 6 core values underpinning its product offering; Leadership, Customer Focus, Transnational Identity, Innovation, Integrity, and Passion. The basis of its recent acquisition of Crystal Decisions has been to offer a broader range of software than its clients and increase it position in terms of size. Acquisitions •
Blue Edge Software (January 2002) The acquisition of Blue Edge software will have helped increase the navigation, access, reports, and analytical tools within Business Objects BI platform.
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Acta Technology (July 2002) The acquisition of Acta has given Business Objects a ‘ready-made’ Best of Breed enterprise analytical platform.
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Crystal Decisions (July2003) The acquisition of Crystal Decisions Inc will help improve the information management of Business Objects current products.
Product Offerings Business Objects core offering is their Business Intelligence software, which is incorporated within their Performance Measurement Suite. Business Objects also have an Analytical Suite incorporating their DataWarehouse along with the analytical tools that they have acquired. They also provide an Enterprise Wide Solution called Enterprise Performance Management.
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Previous Clients • • • • •
Caterpillar PepsiCo Total Volkswagen Zurich Geac <www.geac.com> & <www.performance.geac.com>
Company Overview
Geac is a global enterprise software company specialising in Business Performance. Geac has around 2,400 employees in around 55 locations worldwide. Their core solutions are in financial and human resource management, as well as an ERP system for manufacturing companies. Acquisitions •
Gazette Technologies (April 2000) Geac’s acquisition of Gazette has enabled them to provide a product within the media sector. Gazette was a data warehouse specialist for the media sector.
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OMNIA Software Products (May 2000) The acquisition of Omnia has provided Geac with the tools to provide an end-to-end ERP system, as Omnia provide the supply chain element.
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Comshare (June 2003) The acquisition of Comshare has broadened Geac’s business performance management suite, with the addition of further planning, budgeting, forecasting, and analysis solutions.
Product Offerings The most relevant of Geac’s product range is Geac Performance Management (their enterprise wide system formerly known as ComShare). Performance management comprises of 11 modules ranging from budgeting to strategy management. They also have an Internet based package called Decision, which is a highly customisable decision making package. Previous Clients • • • •
Allied Irish Bank BACS Limited Coca-Cola Swissair 18
ALG Software <www.algsoftware.com> Company Overview
Mike Sherratt founded ALG Software in 1990, with the vision of marrying ‘easy-touse’ analytical applications. ALG software is a privately owned provider of Enterprise Performance Optimisation solutions. Current Product Offerings
ALG’s Enterprise Performance Optimisation suite is a product competing in the SEM/CPM space. The suite offers a fully integrated, web based set of applications that are built to be used either as a complete suite or on their own. ALG also provide a web based budgeting program and four different web based ABC/M programs (ABC, Metify ABM Solo, Metify ABM Team, and Metify ABM Enterprise). Previous Clients • • • • • •
Abbey National British Airways Churchill Insurance Direct Line Southwest Airlines Verizon CorVu <www.corvu.com>
Company Overview CorVu Corporation is a global provider of enterprise performance management solutions. CorVu have over 4,500 customers world-wide in many different sectors ranging from hospitality to aerospace, with the goal of achieving greater effectiveness and efficiency in the decision-making and management reporting process. Current Product Offerings CorVu has two product strands CorStrategy and CorBusiness. The core product within the CorStrategy strand is Enterprise Performance Management, and within this strand is their Balanced Scorecard module. The core product within the CorBusiness strand is Business Intelligence software, which is complimented by CorVu’s Forecasting and DataMining modules. Previous Clients •
Credit Suisse
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Hilton Hotels Nottingham City Council Metlife Specsavers
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