The consolidation marketplace is heating up again

18th February 2014

When Oracle announced that it was no longer going to be selling Oracle Hyperion Enterprise back in February 2012 there was almost an audible gasp from market watchers.  After all, Hyperion Enterprise had been a dependable workhorse of the finance function for around two decades and, although Oracle pledged to continue to provide support, for many finance functions the decision marked the end of an era.  




Some Oracle Hyperion Enterprise (“Enterprise”) customers will of course remain in the Oracle camp, continuing to use Enterprise and others may be tempted to migrate towards Oracle Hyperion HFM.  (An Oracle insider told FSN that the vast majority of Oracle Hyperion Enterprise customers have converted over to Oracle Hyperion Financial Management which has 3,000 customers globally).  But the remainder will use the opportunity to survey the landscape for new ideas and systems and they could be surprised by the considerable amount of change that has taken place, in systems capability, functionality, process enablement and deployment options, writes Gary Simon, FSN’s managing editor and author of the best-selling consolidation book, “Fast Close to the MAX”.

The world of financial reporting looked very different when Enterprise made its debut.  The need in those days was for a very competent consolidation ‘engine’, an accountant’s tool that could cope with the intricate rules of financial consolidation, could handle multiple organisational structures, the complexities of intercompany eliminations and variable share ownership.  But the emphasis of financial consolidation then was on a standalone tool and perhaps this is where matters have changed the most.

Although consolidation can be purchased on a stand-alone basis, these days consolidation capability generally comes bundled as part of a comprehensive Corporate Performance Management (CPM) suite, comprising budgeting, forecasting, planning, reporting and BI (Business Intelligence).  And although the fundamentals of a financial consolidation remain unchanged the scope and character of consolidation has changed in response to significant market shifts and demands. 

According to Dominic Policella, Managing Director of BOARD in the UK, it is the process that has become preeminent rather than functionality as businesses seek to squeeze more efficiency out of the financial reporting process and improve the ‘time to decision’.  And with vast improvements in the power of technology in the last few years, Policella told FSN that businesses are now able to comfortably bring financial and operating data together to make better decisions. 

So to view a consolidation system as a standalone purchase is to miss the point.  A unified tool like BOARD brings all of the key data and decision making processes into a single unified performance manage environment, giving decision makers access to information they need to manage and optimize their whole business performance, not just their consolidation. 

But BOARD is not the only software vendor redefining the consolidation space.  The last year has seen the entry of several new products backed by consolidation pioneers associated with products developed in the early 90’s who have been tempted back into the market.

Last year Michel Morel, formerly co-founder and chief technology officer of Cartesis, (a supplier of industrial strength consolidation systems before it was snapped up by Business Objects and SAP) joined Anaplan to further develop its consolidation product.  Morel told FSN he was attracted by Anaplan’s technology and the opportunity to work in the cloud.   Anaplan’s CTO, Michael Gould, (himself a serial entrepreneur) spent four years developing a single modelling environment leveraging ‘in-memory’ computing and patented HyperBlock™ technology which enables Anaplan to recalculate massive models at spreadsheet-like speed, which is important in a consolidation environment.

In April 2013 Adaptive Insights (formerly Adaptive Planning) added consolidation capability to its cloud-based CPM suite and quickly followed this up with the addition of “Process Tracker” later in the year, designed to provide visually intuitive workflow and the ability to define and monitor one-time and repeating processes.  Users can define specific deliverables, assign them to users, monitor their status, and track their closure.  Adaptive Insights believe the new functionality will enable accounting teams to be more engaged and effective in collaborating on the complex distributed processes of financial consolidation.

But not all of the innovation is in the cloud.  OneStream, is relatively new to Europe but is already making an impact at the high end of the consolidation market with its unified CPM environment and “Extensible Architecture”.  Behind the company are two industry veterans, Bob Powers, OneStream’s Chief Technology Officer who worked on Hyperion Enterprise and came up with the idea for Hyperion Financial Management (HFM), and Tom Shea, President of OneStream, who helped pioneer Hyperion’s Financial Data Quality Management product.  These second time-around entrepreneurs decided it was time to do things better and for example, OneStream’s Extensible Architecture allows companies to meet local and corporate reporting needs in a single application - something that was difficult to achieve in the consolidation products of the past without significant compromise.

The amount of change in the last year may have been bewildering for some but the good news for multinational businesses is that choice is coming back into the market accompanied by enhanced capability and the proven track records of companies and people that have done it before.