Market interest in analytical applications has never been higher as businesses turn to performance management and business intelligence systems to help them exploit slender growth opportunities, respond to margin pressure and manage unprecedented volatility.
In this interview, Gary Simon, FSN’s managing editor, talks to Nanni Grossi, CEO BOARD International, a pioneer in unified performance management about the shape of the market, BOARD’s competitive positioning and the key developments for the future.
Editor: Has the Performance Management Industry changed the way that businesses are managed?
GG: “Definitely!!! Performance Management has changed the way that business is managed and is changing it more than ever.
After years where IT investments have been focused on the productivity improvement of operational processes (through adoption and extension to ERP applications), the marginal return in terms of competitiveness was and is progressively decreasing.
For most organizations further investment in efficiency hasn’t generated the desired pay-back. It was/is time to invest in improving the effectiveness of decision-making processes: you can have the best operational processes in the world, but if your decision-making processes don’t provide the direction and course correction required to achieve your goals, competitiveness is a matter of luck.
This is why organizations’ focus is moving from efficiency to effectiveness and why we saw (some years ago) the biggest ERP’s vendors rapidly enter the CPM/BI market.
After all making better decisions has a profound effect on improving business performances.
Have things really changed since then? This would be an interesting and long discussion - as far as we see when discussing with large companies/organization, most of them failed to achieve a real decision making improvement, despite spending a lot of money with Mega Vendors. The mega vendors offered them a patchwork of products unified under an umbrella logo, without the level of integration, flexibility and user friendliness necessary to really move the needle.
On the opposite side, a relatively small company as BOARD, with its unified approach to Performance Management continues to deliver real performance improvements for its customers – the key reason for our continued double digit growth. It’s not by accident that In recent analyst reports BOARD is considered the best product in terms of Overall Customer Satisfaction and Business Benefits – basically a market validation of our value proposition.”
Editor: Would you say that the CPM industry (including BI) has had as much impact on management processes as say ERP had on the way that transactions are managed?
GG: “Absolutely! This goes back to our core concept of aligning financial processes and operational processes and strategy. What an unified tool like BOARD does, is to enable companies to make better decisions: all key data and decision making processes are available in a single unified performance manage environment, thus giving decision makers access to information they need to manage and optimize their business performance management. ERP systems made the processing efficient. Performance Management makes it possible to make the right decisions and execute them.”
Editor: Why is a unified environment so important to the delivery of sound performance management?
GG: To make a sound decision you need several capabilities.
First of all you need to collect, integrate and analyses information at enterprise level. And this is what traditional Business Intelligence is about.
Then you need the capability to explore and interact with that information in a visual and effective way and in a self-service drag and drop mode. And this is what Data Discovery is about.
Then you need the capability to use the most sophisticated statistical techniques to get high-impact and predictive insights from your data. And this is what Business Analytics are about
Last but not least you need capability to simulate, plan and monitor the potential impact of your decisions on company performance. And this is what performance management is about.
Does it make sense to have four separate environments for this? We believe not. Unification provides clear advantages not only in terms of costs, time to solution, but also in terms of decisions making effectiveness, easiness and timeliness. For example, scenario planning can take place in minutes rather than days using data models from different tools and re-aligning all of them through metadata management. And in a unified environment it is possible to connect financial processes with operations – something that is virtually impossible in the ‘standard’ CPM.
Also, if a planning tool does not embed Business Intelligence capability, any number is very difficult to analyze and understand in its historical perspective and in detail. Finally, unless you have a super-efficient metadata management program in place, often different applications also mean different data and different versions of the truth.
In the last two years the value of an unified approach to decision-making has gained more and more recognition also from the most important IT analysts, recently Gartner start talking about the convergence of Business Intelligence, Performance Management and Analytics industry into a discipline called Business Analytics.”
Editor: Why do you differentiate BI from CPM – does it matter to CFOs?
GG: “We don’t! The distinction between BI and CPM is an artificial, product driven distinction in the eyes of CFOs. They have always needed to integrate planning and control cycle with user friendly and effective data analysis, but there wasn’t any product on the market capable to do it all in one. So organizations started to buy CPM and BI (and Data Discovery and Analytics) products just because none was offering exactly what they needed in a single integrated environment.
BOARD did it, and this is essentially the reason of our international success.
This is why we are different: we see things in the same perspective as CFOs and business users and we always tried to offer them exactly what they need for making better business decisions.”
Editor: You have taken a different approach (toolset) to building CPM capability from other parts of the industry. Why has your approach succeeded where others have failed?
GG: “The toolkit is a key part of our capability to offer an end to end planning and analytical solution.
Why? Because if you want to extend Performance Management beyond finance you need the capability to adapt to S&OP planning processes that are company specific.
Outside monetary measures, there is no a standard way of planning: every company has specific drivers (growth, profitability, market penetration, etc.) and the way in which they plan is a key part of their competitive capability, so out-of-box solutions simply don’t offer what they need.
Editor: Should CFOs be concerned about Big Data? What effect is it going to have on the performance management space?
GG: In these days everything is Big Data, except big data.
So if for Big Data we mean the capability of collecting strategic, financial and operational data in a single environment and to use them for planning, simulation and predictive analytics we believe this will have terrific impact on Performance Management and BOARD is leading the way in Performance Management with Big Data.
If for big data we mean the capability to explore unstructured textual, videos, audio data through the web in an inductive way, we do not see this to have a real impact on performance management.”
Editor: Board is known for its visualization techniques – how is the science of visualization changing and why is it important?
GG: “Unlike the traditional CPM competitors, BOARD offers a modern data discovery environment- making access to the right information easier, faster and more effective for everyone.
Thanks to interactive graphs, native drill-to-anywhere, click and point filters, and drag and drop analysis business users have at their disposal a full self-service environment that allows them to run their own analysis on the fly and save their findings in a personal environment.
All of this without any training: a revolutionary change in the in the capability to search, consume and analyze information across the organization.
Furthermore, thanks to the unification of native Business Intelligence and Performance Management unification, this new capability extends to every type of analytic application built with BOARD, closing the gap between the individual need for self-service analysis, and the organizational necessity to have a shared vision of the truth throughout the whole enterprise.
This cutting-edge capability to combine personal and organizational productivity, injecting information intelligence into the decision making processes, highlights once more the importance of a unified approach to Business Intelligence and Performance Management: no other Business Intelligence or Performance Management vendor could offer the same.”
Editor: What is the relevance/importance of Cloud computing to CPM?
GG: “We have seen some CPM vendors emerging, but customers are already spotting the limitations of a cloud approach. And we have several cases of cloud ‘win-back’.
Why? Because as of now cloud solutions are pretty rigid, limited in terms of functionalities, have inflexible processes, and keeps the finance function in a silo. Often organization are attracted by the simplicity of the model, but once implemented they soon realize that planning processes are complex and that they need something more than some predefined templates to manage them.
For the time being we see a series of technical and functional problems for our industry (starting from the needs to handle large amount of data in a short time) that still make this technology not suitable for delivering end-to-end planning and analytical solutions.”
Editor: What do you rank as the most important innovations in CPM over the last 5 years?
GG: “From our standpoint the most important innovations in the CPM space is the capability to leverage “In-memory” technologies to bring financial analysis down to SKUs level.
And BOARD did a great job in this space launching the HBMP technology.
HBMP stands for Hybrid Bitwise Memory Pattern: thanks to the adoption of a new algorithm, physical data is stored and mapped through unique bits, or rather “bitmapped”. In other words, BOARD maps the compressed multidimensional data structure (Pattern) at bit level (Bitwise) into the RAM (Memory).
The new algorithm, designed to exploit all the potential of in-memory computing, brings enormous benefits, not only in terms of performance, but also in terms of data compression, parallelism and large numbers of concurrent users.
Furthermore, unlike what happens with the majority of in-memory solutions, the algorithm is designed to ensure full bi-directionality (read-write) use of the information.
Consequently, this allows full support of write-back and “on the fly” changes of the data structure, thus keeping all the functional capabilities of BOARD intact.
Furthermore the technology is Hybrid because it allows the users to decide which data they want to run in-memory, and which to be stored on “disc”.
As of now we do not see any other BI or CPM vendor capable of combining Hybrid in memory with data entry and for sure this represents a key competitive differentiator in the Performance Management space.”
Editor: What innovations do you see coming down the line?
GG: “We believe that 2 new technologies will drastically change the Performance Management space in the next years: Mobile CPM and embedded analytics.
We are already investing on both of them and the new BOARD release will encompass both a Mobile Version supporting data entry and a predictive analytics environment that will make it easy for any business users exploiting advanced statistical and mathematical models for improving business decisions.”
Editor: Which of the new technologies have impressed you the most?
GG: “Mobile, for sure! In few years we have seen a tectonic shift in the way in which people are using mobile devices and in the overall mobile market. This shift has brought dramatic innovation in the whole software industry.
As of now these changes have already impacted heavily the Business Intelligence space, but not the Performance Management one.
BOARD will release next year a new mobile version supporting data entry, and, as far as we know, we will be the first vendor to introduce this capability, which will allow us to mobilize decision-making – pioneering a new frontier of Performance Management.”
Editor: How will the market shake out, for example, large global players, versus Cloud players, versus companies like Board?
GG: “We see a very interesting evolution in the BI/CPM market: after the mega-vendors entered this competitive arena, some specialized players like BOARD achieved impressive growth rate (much higher than the one achieved by the mega-vendors).
At a first sight this could seem non-sense: everyone in 2007-2008 was thinking that the specialized vendors wouldn’t have stood up to the competitive pressure of companies such as Oracle, IBM and SAP. After 5 years the reality is completely different: mega-vendors struggle to compete with the innovation and the expertise that specialized vendors bring into the market and due to these differential capabilities we see for the first time niche players are able to sell, and implement corporate solution in large enterprises.”