EPM at a Crossroads: Big Data Solutions

Key Stakeholders: Chief Information Officers, Chief Financial Officers, Chief Operating Officers, Chief Digital Officers, Chief Technology Officer, Accounting Directors and Managers, Sales Operations Directors and Managers, Controllers, Finance Directors and Managers, Corporate Planning Directors and Managers

Analyst-Recommended Solutions: Adaptive Insights, a Workday Company, Anaplan, Board, Domo, IBM Planning Analytics, OneStream, Oracle Planning and Budgeting, SAP Analytics Cloud

In 2018, the Enterprise Performance Management market is at a crossroads. This market has emerged from a foundation of financial planning, budgeting, and forecasting solutions designed to support basic planning and has evolved as the demands for business planning, risk and forecasting management, and consolidation have increased over time. In addition, the EPM market has expanded as companies from the financial consolidation and close markets, business performance management markets, and workflow and process automation markets now play important roles in effectively managing Enterprise Performance.

In light of these challenges, Amalgam Insights is tracking six key areas where Enterprise Performance Management is fundamentally changing: Big Data, Robotic Process Automation, API connectivity, Analytics and Data Science, Vertical Solutions, and Design Thinking for User Experience

Supporting Big Data for Enterprise Performance Management

Amalgam Insights has identified two key drivers repeatedly mentioned by finance departments seeking to support Big Data in Enterprise Performance Management. First, EPM solutions must support larger stores of data over time to fully analyze financial data and a plethora of additional business data needed to support strategic business analysis. The challenge of growing data has become increasingly important as enterprises now face the challenge of managing billion row tables and outgrow the traditional cubes and datamarts used to manage basic financial data. The sheer scale of financial and commerce-related transactional data requires a Big Data approach at the enterprise level to support timely analysis of planning, consolidation, close, risk, and compliance.

In addition, these large data sources need to integrate with other data sources and references to support integrated business planning to align finance planning with sales, supply chain, IT, and other departments. As the CFO is increasingly asked to be not only a financial leader, but a strategic leader, she must have access to all relevant business drivers and have a single view of how relevant sales, support, supply chain, marketing, operational, and third-party data are aligned to financial performance. Each of these departments has its own large store of data that the strategic CFO must also be able to access, allocate, and analyze to guide the business.

New EPM solutions must evolve beyond traditional OLAP cubes to support hybrid data structures that effectively scale to support the immense scale and variety of data being supported. Amalgam notes that EPM solutions focusing on large data solutions take a variety of relational, in-memory, columnar, cloud computing, and algorithmic approaches to define categories on the fly, store, structure, and analyze financial data.

To support these large stores of data and effectively support them from a financial, strategic, and analytic perspective, Amalgam Insights recommends the following companies that have been innovative in supporting immense and varied planning and budgeting data environments based on briefings and discussions held in 2018:

  • Adaptive Insights, a Workday Company
  • Anaplan
  • Board
  • Domo
  • IBM Planning Analytics
  • OneStream
  • Oracle Planning and Budgeting
  • SAP Analytics Cloud

Adaptive Insights

Adaptive Insights’ Elastic Hypercube, an in-memory, dynamic caching and scaling solution announced in July 2018. Amalgam Insights saw a preview of this technology at Adaptive Live and was intrigued by the efficiency that Adaptive Insights provided to models in selectively recalculating only the dependent changes as a model was edited, using a dynamic caching approach for only using memory and computational cycles when data was being accessed, and using both tabular and cube formats to support data structures. This data format will also be useful to Adaptive Insights as a Workday company in building out the various departmental planning solutions that will be accretive to Workday’s positioning as an HR and ERP solution after Workday’s June acquisition (covered in June in our Market Milestone).

Anaplan

Anaplan’s Hyperblock is an in-memory engine combining columnar, relational, and OLAP approaches. This technology is the basis of Anaplan’s platform and allows Anaplan to rapidly support large planning use cases. By developing composite dimensions, Anaplan users can pre-build a broad array of combinations that can be used to repeatably deploy analytic outputs. As noted in our March blog, Anaplan has been growing rapidly based on its ability to rapidly support new use cases. In addition, Anaplan has recently filed its S-1 to go public.

Board

Board goes to market both as an EPM and a general business intelligence solution. Its core technology is the Hybrid Bitwise Memory Pattern (HBMP), a proprietary in-memory data management solution, designed to algorithmically map each bit of data, then to store this map in-memory. In practice, this approach allows Board to allow many users to both access and edit information without dealing with lagging or processing delays. This approach also allows Board to support which aspects of data to support in an in-memory or dynamic manner to prioritize computing assets.

Domo

Domo describes its Adrenaline engine as an “n-dimensional, highly concurrent, exo-scale, massively parallel, and sub-second data warehouse engine” to store business data. This is accompanied by VAULT, Domo’s data lake to support data ingestion and serve as a single store of record for business analysis. Amalgam Insights covered the Adrenaline engine as one of Domo’s “Seven Samurai” in our March report Domo Hajimemashite: At Domopalooza 2018, Domo Solves Its Case of Mistaken Identity. Behind the buzzwords, these technologies allow Domo to provide executive reporting capabilities across a wide range of departmental use cases in near-real time. Although Domo is not a budgeting solution, it is focused on portraying enterprise performance for executive consumption and should be considered for organizations seeking to gain business-wide visibility to key performance metrics.

IBM Planning Analytics

IBM Planning Analytics runs on Cognos TM1 OLAP in-memory cubes. To increase performance, these cubes use sparse memory management where missing values are ignored and empty values are not stored. In conjunction with IBM’s approach of caching analytic outcomes in-memory, this approach allows IBM to improve performance compared to standard OLAP approaches and this approach has been validated at scale by a variety of IBM Planning Analytics clients. Amalgam Insights presented on the value of IBM’s approach at IBM Vision 2017 both from a data perspective and from a user interface perspective that will be covered in a future blog.

OneStream

OneStream provides in-memory processing & stateless servers to support scale, but their approach to analytic scale is based on virtual cubes and extensible dimensions, which allow organizations to continue building dimensions over time that are tied back to a corporate level and to create logical views of data based on a larger data store to support specific financial tasks such as budgeting, tax reporting, or financial reporting. OneStream’s approach is focused on financial use rather than general business planning.

Oracle Planning and Budgeting Cloud

Oracle Planning and Budgeting Cloud Service is based on Oracle Hyperion, the market leader in Enterprise Performance Management from a revenue perspective. The Oracle Cloud is built on Oracle Exalogic Elastic Cloud, Oracle Exadata Database Machine, and the Oracle Database, which provide a strong in-memory foundation for the Planning and Budgeting application by providing an algorithmic approach to manage storage, compute, and networking. This approach effectively allows Oracle to support planning models at massive scale.

SAP Analytics Cloud

SAP Analytics Cloud, SAP’s umbrella product for planning and business intelligence, uses SAP S/4HANA, an in-memory columnar relational database, to provide real-time access to data and to accelerate both modelling and analytic outputs based on all relevant transactional data. This approach is part of SAP’s broader HANA strategy to encapsulate both analytic and transactional processing in a single database, effectively making all data reportable, modellable, and actionable. SAP has also recently partnered with Intel Optane DC persistent memory to support larger data volumes for enterprises requiring larger persistent data stores for analytic use.

This blog is part of a multi-part series on the evolution of Enterprise Performance Management and key themes that the CFO office must consider in managing holistic enterprise performance: Big Data, Robotic Process Automation, API connectivity, Analytics and Data Science, Vertical Solutions, and Design Thinking for User Experience. If you would like to set up an inquiry to discuss EPM or provide a vendor briefing on this topic, please contact us at info@amalgaminsights.com to set up time to speak.

Last Blog: EPM at a Crossroads
Next Blog: Robotic Process Automation and Machine Learning in EPM

FloQast Supports ASC 606 Compliance by Providing a Multi Book Close for Accountants

On September 11, 2018, FloQast announced multi-book accounting capabilities designed to help organizations to support ASC 606 compliant financial closes by supporting dual reporting on revenue recognition and related expenses. As Amalgam Insights has covered in prior research, ASC 606/IFRS 15 standards for recognizing revenue on subscription services are currently required for all public companies and will be the standard for private companies as of the end of 2019.

Currently, FloQast supports multi book accounting for Oracle NetSuite and Sage Intacct, two strong mid-market finance solutions that have invested in their subscription billing model support capabilities. This capability is available for FloQast Business, Corporate, and Enterprise customers at no additional cost. The support of these solutions also reflects the investment that each of these ERP vendors has made in subscription billing. NetSuite’s 2015 acquisition of subscription billing solution Monexa eventually led to the launch of NetSuite SuiteBilling, while Sage Intacct developed its subscription billing capabilities organically in 2015.

Why This Matters For Accounting Teams

Currently, accounting teams compliant with ASC 606 are required to provide two sets of books associated with each financial close. Organizations seeking to accurately reflect their finances both from a legacy and current perspective either need to duplicate efforts to provide compliant accounting outputs or to use an accounting solution that will accurately create separate sets of close results. By simultaneously creating dual level close outputs, organizations can avoid the challenge of creating detailed journal entries to explain discrepancies within a single close instance.

Recommendations for Accounting Teams with ASC 606 Compliance Requirements

This announcement has a couple of ramifications for mid-market enterprises and organizations that are either currently supporting ASC 606 as public companies or preparing to support ASC 606 as private companies.

First, Amalgam Insights believes that accounting teams using either Oracle NetSuite or Sage Intacct should adopt FloQast as a relatively low-cost solution to solve the challenge of duplicate ASC 606 close. Currently, this functionality is most relevant to Oracle NetSuite and Sage Intacct customers with significant ASC 606 accounting challenges. To understand why, consider the basic finances of this decision.

Amalgam Insights estimates that, based on FloQast’s current pricing of $125 per month for business accounts or $150 per month for corporate accounts , FloQast will pay for itself with productivity gains in any accounting department where an organization spends four or more man-hours per month to create duplicate closes. This return is in addition to the existing ROI associated with financial close that Amalgam Insights has previously tracked for FloQast customers in our Business Value Analysis. In this document, we found that FloQast customers interviewed saw a 647% ROI in their first year of deployment by accelerating and simplifying their close workflows and improving team visibility to the current status of financial close.

Second, accounting teams should generally expect to support multi-book accounting for the foreseeable future. Although ASC 606 is now a current standard, financial analysts and investors seeking to conduct historical analysis of a company for investment, acquisition, or partnership will want to conduct a consistent “apples-to-apples” comparison of finances for multiple years. Until your organization has three full years of financial statements under ASC 606 that are audited, your organization will likely have to maintain multiple sets of books. Given that most public organizations started using ASC 606 in 2018, this means having a plan for multiple sets of books until 2020. For private organizations, this may mean an additional year or two given that mandatory compliance starts at the end of 2019. Companies that avoid preparing for the reality of dual level closes for the next couple of years will be spending significant accountant hours on easily avoidable work.

If you would like to learn more about FloQast, the Business Value Analysis, or the current vendor solution options for financial close management, please contact Amalgam Insights at info@amalgaminsights.com

VMware Purchases CloudHealth Technologies to support Multicloud Enterprises and Continue Investing in Boston


Vendors and Solutions Mentioned: VMware, CloudHealth Technologies, Cloudyn, Microsoft Azure Cloud Cost Management, Cloud Cruiser, HPE OneSphere. Nutanix Beam, Minjar, Botmetric

Key Stakeholders: Chief Financial Officers, Chief Information Officers, Chief Accounting Officers, Chief Procurement Officers, Cloud Computing Directors and Managers, IT Procurement Directors and Managers, IT Expense Directors and Managers

Key Takeaway: As Best-of-Breed vendors continue to emerge, new technologies are invented, existing services continue to evolve, vendors pursue new and innovative pricing and delivery models, cloud computing remains easy to procure, and IaaS doubles every three years as a spend category, cloud computing management will only increase in complexity and the need for Cloud Service Management will only increase. VMware has made a wise choice in buying into a rapidly growing market and now has greater opportunity to support and augment complex peak, decentralized, and hybrid IT environments.

About the Announcement

On August 27, 2018, VMware announced a definitive agreement to acquire CloudHealth Technologies, a Boston-based startup company focused on providing a cloud operations and expense management platform that supports enterprise accounts across Amazon Web Services, Microsoft Azure, and Google Cloud Platform.

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Oracle Autonomous Transaction Processing Lowers Barriers to Entry for Data-Driven Business

I recently wrote a Market Milestone report on Oracle’s launch of Autonomous Transaction Processing, the latest in a string of Autonomous Database announcements made by Oracle following announcements in Autonomous Data Warehousing and the initial announcement of the Autonomous Database late last year. This string of announcements by Oracle takes advantage of Oracle’s investments in…

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Azure Advancements Announced at Microsoft Inspire 2018

Last week, Microsoft Inspire took place, which meant that Microsoft made a lot of new product announcements regarding the Azure cloud. In general, Microsoft is both looking up and trying to catch up to Amazon from a market share perspective while trying to keep its current #2 place in the Infrastructure as a Service world ahead of rapidly growing Google Cloud Platform as well as IBM and Oracle.  Microsoft Azure is generally regarded as a market-leading cloud platform, along with Amazon, that provides storage, computing, and security and is moving towards analytics, networking, replication, hybrid synchronization, and blockchain support.

Key functionalities that Microsoft has announced include:

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What Wall Street is missing regarding Broadcom’s acquisition of CA Technologies: Cloud, Mainframes, & IoT

(Note: This blog contains significant contributions from long-time software executive and Research Fellow Tom Petrocelli) On July 11, Broadcom ($AVGO) announced an agreement to purchase CA for $18.9 billion. If this acquisition goes through, this will be the third largest software acquisition of all time behind only Microsoft’s $26 billion acquisition of LinkedIn and Facebook’s…

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Amalgam Provides 4 Big Recommendations for Self-Service BI Success

  Recently, my colleague Todd Maddox, Ph.D., the most-cited analyst in the corporate training world, and I were looking at the revolution of self-service BI, which has allowed business analysts and scientists to quickly explore and analyze their own data easily. At this point, any BI solution lacking a self-service option should not be considered a…

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The Map to Multi-Million Dollar Machine Learning

Amalgam has just posted a new report: The Roadmap to Multi-Million Dollar Machine Learning Value with DataRobot. I’m especially excited about this report for a couple of reasons. First, this report documents multiple clear value propositions for machine learning that led to the documented annual value of over a million dollars. This is an important…

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5 Stages of The Technology Expense Management Market (re: Calero Acquires Veropath)

In my recent Market Milestone, Calero Acquires Veropath to Bolster its Global Role in Technology Expense Management, I made a quick comment about Veropath as an “accretive acquisition target.” But then I realized that I hadn’t explained what that meant from an Amalgam perspective. From Amalgam’s perspective, the Technology Expense Market (aka Telecom Expense Management, although…

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