Business optimisation and accountability are among the big issues which have continued to pump life into the data query, analysis and reporting software genre. It has in the past been called the Executive Information System, the “everybody information system” (when it was realised that not just top management could benefit from a digested view of the organisation’s performance) and, in one of its most recent incarnations, Business Intelligence. The latest use to which analysis software has been put is Business Performance Management or, as Gartner prefers to call it, Corporate Performance Management (CPM). But it’s more than just the same thing under a different name. Previous analytical engines resided in something of a compartment of their own. The data from the company’s day-to-day operations was piped into them by a process known as Extract Transform and Load (ETL) and reorganised into “cubes”, a suitable format for cross-tabulating and graphing the data on multiple axes.
To make the results more instantly digestible, a few Key Performance Indicators (KPIs) are typically chosen, so a warning could be sounded if these moved outside an acceptable range.
Full-blown CPM aspires to be something more than this. Financial consolidation and financial and other legally mandated reporting is considered an integral part of CPM. The other requisite elements of a full CPM system, according to Gartner, are budgeting, planning and forecasting; profitability modelling and optimisation and “scorecarding” – the monitoring of variables and particularly KPIs. The cause and effect relationships among KPIs are often brought out by mapping them against an organisational strategy.
This combination has brought the BI set of functionalities into contact with those of ERP and often taps into other systems such as production and sales for its data. It is hardly surprising that among those vendors reckoned to be leaders in the CPM market are the traditional BI purveyors such as Cognos and SAS as well as the ERP leaders like SAP and Oracle.
Microsoft however, is predicted to come up on the rails fast with its Office PerformancePoint Server.
Scheduled for full release later this year, the Microsoft product is keenly anticipated in the market. By integrating it with the Office suite, and so aspiring to make performance data broadly available, Microsoft is attempting to “democratise access to critical business insight, enabling better business decision-making and stronger performance across your entire organisation”, noted Jeff Raikes, head of Microsoft’s business division, in a business intelligence conference early this year.
PerformancePoint Server incorporates a broad range of performance management functionality from planning and budgeting to conventional BI scorecards and dashboards, (gleaned from the company’s takeover of BI specialist ProClarity earlier this year) but this range may be a little too bewildering for broad early adoption.
Gartner points to Microsoft’s disappointing execution of adventurous plans, typified by the delays to the Vista operating system. “Microsoft faces execution challenges before it can deliver on the promise of PerformancePoint Server,” says Nigel Rayner, author of Gartner’s December 2006 Magic Quadrant study of CPM. “Consequently, organisations should not defer CPM suite evaluations pending the availability of PerformancePoint Server. There are already plenty of viable CPM suites available,” he says.
Since CPM is positioned in aspiring users’ minds as the step beyond clumsy and error-prone spreadsheets, Microsoft may glean some upselling potential from Excel’s dominance of the spreadsheet market.
Many New Zealand companies are getting the message that spreadsheets are no longer enough to monitor their business, and are starting at the small end of CPM.
The Mitre 10 hardware store is one. The home improvement chain has nearly 100 outlets and 11 Mitre 10 Mega stores and the number is growing. Stores are individually owned and each runs its own point-of-sale system. Different stores would classify the same line of goods under a different category which made comparisons of sales performance and inventory levels across the country very difficult, says business analyst Rod McHugh.
Reporting using Crystal Reports was quite basic and cumbersome. Just over a year ago, the chain implemented Q4Bis business performance management software, and introduced a more consistent analysis capability across the country. Mitre 10 now uses the barcode to identify the line of goods so like is now being compared with like.
Q4bis takes the sales and inventory data and reformats it into a set of classic business intelligence “cubes”. These allow reports of sales and inventory slicing and dicing the data in various ways, for example by store, region, department, category of goods or by category manager. One manager might oversee several lines of goods, McHugh explains, and the software allows the manager’s performance to be tracked.
But business performance measurement is not just a tool for senior executives; store manager have access to the data. “It shows managers their own data in a format they’ve never seen before,” says McHugh.
Actual performance is compared with budget, currently monthly, but data is accumulated daily. Weekly reporting is about to come on stream. Use of Q4bis “increases the visibility of data and makes management easier”, says McHugh.
Mitre 10 saw the need for improved performance monitoring in order to improve its position in the very competitive home improvement retail industry. Ease of use was an important factor in choosing the software provider. “We wanted a solution that people could pick up and use with a minimum of training.”
There was still some specialist work needed to build appropriate cubes, and Mitre 10 retained Auckland’s Cosyn, software specialists in the IBM iSeries and AS/400, Mitre 10’s hardware platform, to do this.
Mitre 10s data was “clean and well documented”, says Cosyn’s Trevor Middleton and it was straightforward to feed it into Q4bis through Microsoft SQL server. “I have administrative access to the cubes and can build my own reports,” says McHugh.
McHugh has just drawn up a proposal for measuring the effectiveness of advertising campaigns on sales. This will require more flexibility than the current monthly or weekly reports, since the campaigns run for varying lengths of time.
Unfortunately, it has not proved feasible to extend the use of Q4bis to the financial systems, but that is no great handicap, says Mitre 10 IT manager Suman Mistry. It would have been awkward to massage the finance data in the right format for Q4bis, but there is not the same need for analysis by region or line of business. “The finance data is mostly quite flat; there are only a couple of hierarchies in there.”
So a web-based program was developed using ColdFusion to present the finance data in a web-accessible format. The finances are managed by Velocity Global’s Structured Distribution System and it was comparatively easy to extract the figures from that. “Everyone has access to the data they needed already,” says Mistry, “it was just a question of presentation.”
CIO New Zealand Business Software Guide 2007
© Fairfax Business Media
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