Dave Kasabian's Pervasive Performance Management Blog

What Are CFOs Thinking? Insights from the IBM Global CFO Study

Dave Kasabian — Wed, 03 Mar 2010 13:52:00 GMT

Yesterday I attended the launch of the results of the IBM Global CFO Study. The event was attended by a small group of research analysts, IBM clients, and IBMers. The survey included input from a diverse group of over 1900 CFOs and Finance leaders. Approximately, 1500 of the participants were directly interviewed in addition to completing the survey.

There is much more information than can be discussed in a blog entry but here are some nuggets from the notes I took during the session yesterday:

70% of CFOs believe they have advisory or decision making role on the enterprise agenda
55% are dissatisfied with their operational planning and forecasting capabilities
50% lack a common planning platform
50% of finance time is still spent on transaction activities
50% produce operational metrics manually
44% have very limited or no predictive modeling capabilities
40% of organizations produce financial metrics manually

A couple of thoughts on this:
If CFOs want to drive the enterprise agenda they need to reduce the amount of time finance spends on transaction activities.

Any company that is still doing planning in spreadsheets should be ashamed of themselves. There are so many packaged planning applications of various shapes, sizes, and price points that it is conscionable to still be doing this in spreadsheets

CFOs who want to be strategic need to get more involved in the development of common and automated performance metrics. It's OK to start with financial metrics but strategic CFOs realize that financial performance is a lagging indicator and that operational metrics are what drive financial performance.

Would You Pay More For A "Rock Star" Analyst from Gartner, Forrester or IDC?

Dave Kasabian — Mon, 22 Feb 2010 14:06:00 GMT

Banning Blogging
Forrester Research recently banned their analysts from blogging about their area of coverage. This is precipitated by the recent defection of several of their "Rock Star Analysts" who took the brand they created for themselves via their blogs and started up their own boutique firms. Forrester is not alone in their stance on analyst blogging, they have just been more high profile in their stance. Gartner, IDC and other firms are also grappling with this issue. My former colleague at AMR Research, Phil Fersht, wrote an interesting perspective on this in his blog. In it he makes some very valid points about the impact the social media will have on the large analyst firms.

Paying To Retain Top Talent
In my opinion this is a defining time for large analyst firms. Will they adapt to the changing environment or try and hold on and hope blogging is a passing fad? Until they find a way to monetize it they will resist. To me it is a bad move to ban analyst blogging. It creates buzz, establishes credibility and increases the value of the analysts who do it well. It is up to the analyst firms to take advantage of that. Rock stars are worth more than average analysts, clients understand that and are willing to pay a premium for advice from them. The firms need to embrace having rock stars in their stables, demand market prices for them, and compensate them well. This is no different than free agency in sports. If you don't pay market value you will lose your best players. Like the New York Yankees, the big analyst firms can afford to retain their top talent and must do so if they expect to remain on top.

Would You Pay More For A Rock Star Analyst?
There is no doubt that blogging is creating rock star analysts whose reputation and brand has more perceived value than the firm they work for. Would you be willing to pay a premium to talk with these analysts? If not, it is not reasonable to expect your analyst firm to retain them and you should expect more defections. The downside to the client is that to continue to interact with the best analysts you may need to engage several boutique firms. The days of one-stop shopping for analyst advice may be numbered.

What's "New" in the new Gartner Magic Quadrant for Corporate Performance Management?

Dave Kasabian — Thu, 28 Jan 2010 17:31:00 GMT

The 2010 Gartner Magic Quadrant for CPM Suites is out and pretty much every vendor listed has issued a press release about their placement on the Quadrant. This is a testament to the level of influence placement on the Magic Quadrant has in the market. But how much weight should the Quadrant be given?

"...and the winner is..."
I've had more than a few clients tell me that they have made a vendor selection only to have it shot down by management because the vendor was not on, or too low on, the Quadrant. Clients should remember that this is a generic tool. Right at the top of the report it says "Users should evaluate vendors carefully, according to business needs and their broader business intelligence and performance management strategies". The Quadrant is one data point (albeit a high profile one) in the selection process and should be looked at that way. How a vendor can meet your specific business requirements should be first and foremost.

But the influence of the Quadrant is not the reason I'm blogging about it. I decided to look back at previous Quadrants and see if anything jumped out at me. A few things did.

There were no "leaders" in the Quadrant in 2004
Since 2005 the three leaders have been the same (Oracle/Hyperion, SAP/BOBJ, IBM/Cognos)
The movement of the leaders has been minimal since 2005 (in both ability to execute and completeness of vision)
12 of the 17 vendors on the 2004 quadrant were acquired by the end of 2007 (Clarity, Lawson, Oracle, SAP, SAS were not)
All of the "visionary" vendors from 2004 have been acquired
Five new niche vendors have been added in the the last two years (Bitam, Host Analytics, Prophix, Tagetik, Winterheller)

So what does this mean?
- The leaders need to get back to working on innovation rather than integration
- Non-leader visionary vendors will innovate and put pressure on the leaders to keep up
- Niche vendors will selectively innovate to differentiate themselves
- Several niche vendors will move to the innovator quadrant within a year or two
- A new wave of acquisitions will occur
- New innovative niche vendors will bubble up to fill the void
- The vendor bake-off becomes common-place again

In my opinion we are at a stage in the life cycle of performance management applications that is conducive to rapid innovation similar to what we saw in the years leading up to the major consolidation in this market back in 2007. All of a sudden there are lots of options for clients to consider and lots of vendors vying for market share. "Me too" products that don't differentiate from the leaders will not be able to compete in this market (unless strictly on price). Clients should take a good look at all their options. The niche vendors should not be eliminated based on Quadrant placement alone, and the leaders should not be eliminated on price alone. That would be short-sighted and could cost you in the end.

How Should You Deploy Business Intelligence?

Dave Kasabian — Wed, 13 Jan 2010 15:09:00 GMT

As part of my webcast series on BI in a Turbulent Economy for the IBM Cognos Innovation Center for Performance Management I recently presented on the concept of Think Globally, Act Locally when it comes to BI. What does this mean? Well, it's about taking a hybrid approach to BI strategy.

Let's take a look at the two common BI deployment strategies:

1) The Big Bang Approach

The big bang approach is defined by going for an enterprise-wide deployment of BI right out of the gate. In the big bang approach there is a corporate edict that there will be a unified and consistent approach to BI that will be governed and rolled out globally and governed centrally. For this approach diverse requirements have to be gathered, compiled, vetted, and prioritized. With diverse business requirements come diverse data requirements that need to be defined and sourced which requires more IT involvement than the silo approach.

2) The Silo Approach

In the silo approach specific BI needs are dealt with on a case by case basis. It could be defined as a ‘one-off’ approach to BI. As needs come up, the specific need is defined and scoped and a product is selected and implemented to meet that specific requirement. Very often this is done within the business unit without oversight by IT or with any sense of, or communication with, other BI initiatives that may be going on in the organization. These types of deployments tend to be functionally focused around a specific process, for instance sales analysis or financial analytics, with little if any cross-pollination of data across functional areas. This approach can be quick to implement but can also result in a proliferation of data marts without common definitions or consistent data sources.

Consider a Hybrid Approach

Think Globally, Act Locally is a hybrid approach that can provide an organization with some of the best of both worlds. This approach bridges the gaps between the Silo and Big Bang approaches. Like the silo approach it starts in a division or function and focuses on a specific measurable pain and its scope is limited to resolving that pain but in the context of strategic goals.

For more information about this and other BI topics check out my white papers and webcasts on the IBM Cognos Innovation Center for Performance Management website.

5 Predictions for Enterprise Performance Management (EPM) in 2010

Dave Kasabian — Wed, 23 Dec 2009 14:58:00 GMT

2010 Predictions for Performance Management

It is the time of year when we all reflect on the year that was and speculate on what is in store for the coming year. In the interest of brevity I've limited my predictions to 5 rather than the customary 10.

First off, I think most of us are happy to bid adieu to 2009. It was a tough year for many with jobs lost and spending curtailed. Performance Management was certainly not exempt from the impact of a down economy but I'm optimistic that 2010 will be a better year in general with some significant changes in Performance Management.

When I look into my crystal ball here is what I see:

#1. Purse Strings Loosen
There has been a backlog of demand for performance management solutions over the last 18 months. Spending that was approved and earmarked for EPM in 2009 was held back due to spending constraints.  This money will be freed up in 2010.

The due diligence (and even vendor selection in many cases) has already been done which will reduce the cost of sales and compress the sales cycle of these opportunities.  Based on the compressed sales cycle and lower cost of sale, profit margins on EPM revenue will trend higher.

#2. Mega-vendors Will Have a Big Year by Targeting Pervasive Performance Management
The mega-vendors in EPM (IBM, Oracle, and SAP) will have banner years in selling EPM into their existing client bases and adding EPM into the scope of large technology purchases and strategic initiatives. These vendors have spent a couple of years integrating acquired EPM products into their platforms and this effort will pay dividends during 2010 as their architecture catches up with their marketecture.

These (and select other vendors) will be successful in expanding the scope of their clients' performance management initiatives to include profitability analytics, strategy management, sales performance, supply chain performance and other operations areas. Pervasive Performance Management is the holy grail for the large vendors as they strive to increase deal size and differentiate their performance management offerings from smaller, niche performance management vendors. However, due to the sheer size and breadth of these vendors, performance management will remain a small percentage of their revenue when compared to BI and other core product lines.

#3.  Best of Breed Makes a Big Comeback in the Mid-Market
As the mega vendors strive to expand the scope of performance management, many niche vendors are squarely focusing on the traditionally core components of performance management (budgeting, forecasting, and financial reporting).

Many customers (especially in the mid-market) have a significant and specific pain point to address in these areas and are not ready (or able) to expand their scope to a strategic performance management initiative. Some prefer a smaller vendor that specializes in addressing their key pain rather than a software conglomerate. They want the attention, responsiveness and "skin in the game" that smaller vendors provide. In short, some prefer to be a big fish in a small pond.

The last year has seen many smaller vendors pop up to fill the void left by the acquisition of so many best-of-breed vendors. There will be a "smack-down" between all the new vendors and the mega-vendors in the mid-market. The increased number of options for mid-market clients will result in the return of the "bake-off" and "dog and pony show" as clients struggle to decipher the differences between the plethora of options.

#4. The Cloud Gets Bigger But Finance Lags
The impact of the cloud is being felt all over the software industry. In my opinion the cloud will gain significant traction in 2010 as it moves from the stage of Early Adopters to Early Majority. The cloud will become a viable option to many, many more organizations this year.

I believe this is true in many areas including Business Intelligence but not for Performance Management.  As we all know finance people tend to be a just a tad risk averse and not quite as cutting-edge as other parts of the organization.

Therefore, I see finance lagging behind the rest of the organization when it comes to embracing the cloud. While I see the cloud entering the early majority stage of adoption during 2010, those in Finance who embrace it will still be considered innovators. In my opinion in 2010 Finance should wake up to the fact that the cloud is here and it is here to stay and they should be more open to considering cloud options for performance management.

#5. There Will Be No Acquisitions in 2010
I'm not saying that Oracle, IBM, SAP and others will not make any acquisitions during 2010 - they will. But I do not see any performance management vendors being acquired during this year.

The mega-vendors will continue integrating what they have acquired and niche vendors will continue targeting their specific markets and trying to grab additional share in those markets. I don't expect much turmoil in the performance management vendor landscape this year.

How to navigate BI ROI

Dave Kasabian — Mon, 21 Dec 2009 15:04:00 GMT

BI Remains Top of Mind
BI continues to be the most strategic initiative for the CIO according to research by Gartner, IBM and others. However, even strategic initiatives struggle to get funding when budgets are tight.  BI competes for limited funding against many other strategic and tactical initiatives that often have compelling ROI cases.

ROI Drives Funding
That is why the IBM Cognos Innovation Center for Performance Management has sponsored a webcast series on building the business case for BI in a turbulent economy. As part of this series I have delivered several webcasts and related white papers. Two of these white papers are available for free download (registration required) from the Innovation Center website.

    1) Building the Case for Business Intelligence in a Turbulent Economy
    2) Funding for BI: It's All About ROI, ROI, ROI

Both of these papers provide non-vendor specific advice on understanding the challenges of garnering funding for BI and maintaining momentum during difficult times. The first paper documents six ways to strengthen the business case for BI and the second helps find the balance between tangible and intangible ROI when building a business case for BI investment. Both are quick reads with practical advice, take a look.

What Do You Want To Hear?

As always, I am interested in your feedback as I continue to evolve my content delivery to provide relevant, valuable, and digestible information to the BI and Performance Management community.

Let me know what you think of my content and what you would like to see next.

SAP's Dilemma: The Cow vs. The Cloud

Dave Kasabian — Mon, 14 Dec 2009 14:35:00 GMT

Soon after Jonathan Becher (congratulations to Jonathan on his recent promotion to Executive Vice President) took the stage at the recent SAP Analyst Summit in Boston it was apparent that this was not going to be a typical bullet point laden PowerPoint presentation on "here's what's coming in our next release". Later, in a one-on-one discussion with Jonathan, he clarified that SAP was due to provide analysts with a "5 year vision" which explained the futuristic opening to the event.

SAP's Version of HAL
Jonathan set the stage for a "futures" oriented session by virtually sharing the stage with the voice of a computer named "Teri", SAP's version of a equally omnipotent but less menacing version of HAL (from 2001: A Space Odyssey) to show the audience how easy and powerful analytics will be in the future.

Analytics & Cloud at the Forefront of SAP's Strategy
Jonathan, John Schwarz, Jim Hagerman Snabe, and Vishal Sikka spent the rest of the morning discussing how "this is not your grandmother's SAP" and how SAP is planning to embrace the cloud and continue to exploit analytics to drive growth. They acknowledged that the days of counting on 7-figure deals to drive growth are over and how SAP will deliver higher volume, lower cost solutions to the market place.

The Cash Cow vs. Innovation
This is the big challenge for SAP. Their cash cow is big honkin' on-premise solutions. Their clients continue to use (and will for years to come) these solutions and pay the hefty maintenance that goes with them. SAP's partners do and will continue to drive significant services revenue from these solutions. SAP's stance is that they have "prepared for the cloud", have embraced it with several solutions that are available on-demand, and will deliver new solutions via the cloud. They will deliver new modules via the cloud which will significantly reducing time to value; as well as reduce the frequency, cost and disruption of on-premise platform upgrades. This will be a fine line to walk but is necessary to prevent penetration into the SAP client base by SaaS competitors in a changing market place.

Will clients think of SAP when they think of the cloud? They don't yet but SAP is trying to change that.

Gartner to acquire AMR Research

Dave Kasabian — Tue, 01 Dec 2009 14:21:00 GMT

Gartner has announced it is acquiring AMR Research for US$64M. There have been rumors for years that AMR would be acquired but most thought it would be Forrester that eventually acquired them.

A Supply Chain Play
AMR's domain expertise in Supply Chain is a nice tuck-in for Gartner. There will be some overlap with AMR's Enterprise Applications Strategies and Market Services offerings. AMR has been running lean so hopefully my former colleagues at AMR will all have a soft landing as AMR is brought into the fold at Gartner. I wish them all the best.

Microsoft Declares SAP BPC a "Preferred Solution" for Planning & Consolidation: A Shot Across the Bow of Oracle and Others

Dave Kasabian — Wed, 25 Nov 2009 14:51:00 GMT

Last week SAP announced that BusinessObjects Planning & Consolidations (BPC) is now a Microsoft "preferred solution" for Microsoft customers looking for budgeting, planning, forecasting and financial close solutions. This makes a lot of sense given the legacy of BPC (Outlooksoft, acquired in 2007) was purposefully designed on Microsoft technology from bottom to top.
Woulda, Shoulda, Coulda...Didn't
In my opinion Microsoft should have acquired Outlooksoft when they had the chance rather than going down the development route with PerformancePoint Server. Outlooksoft had the right technology, a growing client base, and knew how to sell to the office of the CFO. I'm not the only one who thought an Outlooksoft/Microsoft marriage would be a good one so I'm sure there were internal dynamics that I don't know about that prevented it from happening. Regardless of why that acquisition never happened, the natural fit remains and the "preferred solution" relationship should be attractive to Microsoft customers and creates an opportunity for SAP to expand its footprint in "Microsoft shops".

What Does "Preferred Solution" Mean? Will They Be Dating Other Vendors?
I found the wording in the press release interesting. It says: "Microsoft Corporation supports the SAP® BusinessObjects™ Planning and Consolidation application, version for the Microsoft platform, as a preferred solution." The key word here is "a" rather than "the" preferred solution. Microsoft will likely continue to work with other vendors who provide planning solutions on Microsoft's technology. It will be interesting to see how this plays out once SAP and Microsoft have finished "identifying potential targeted go-to-market initiatives to accelerate the adoption of SAP BusinessObjects Planning and Consolidation among the Microsoft user base." Other vendors have been working with Microsoft to fill the void left when PerformancePoint was shut down. Will this relationship with SAP supercede the others?

Is this a tag team against Oracle? Yes, and More
Both of these mega-vendors see Oracle as the evil empire. The relationship reminds me of the alliance between the United States and Russia during World War II. They don't see eye to eye on everything but know that uniting against a common enemy will improve their chances of winning the war. Together they are looking for ways to prevent Oracle from infiltrating their turf. This relationship is a way to keep Oracle from using its planning and consolidation products as an entre into SAP or Microsoft strongholds.

I believe this is also targeted at some of the niche players that are beginning to make some headway in the planning and consolidation space. Vendors like Clarity Systems, Tagetik, Host Analytics and others have been working to fill the void left by PerformancePoint and are aggressively targeting the mid to upper-mid market for planning and consolidation. While Oracle is the high profile competitor that this arrangement targets it can also help SAP prevent these smaller vendors from establishing a strong foothold in the mid-market.

Reassurance for SAP BPC Customers on the Microsoft version
Another important thing that this arrangement does do is ensure that SAP will continue to support its BPC product on both the Microsoft stack and SAP Netweaver. This has always been their stance but there have always been rumblings in the market that once the Netweaver version went commercial (which it has), development on the Microsoft version would be phased out or at least diminished. This very public arrangement with Microsoft should quell any fears that the Microsoft version of BPC is going away.

Take a Glimpse into the Future of BI: You'll Like What You See

Dave Kasabian — Mon, 16 Nov 2009 16:42:00 GMT

As an industry follower and advisor I tend to focus on the here and now of BI and PM rather than pontificating about long-term outlooks and market predictions.

But every once in a while I let myself sit back and daydream about "the next big thing".

A confluence of circumstances made me do so recently. I was in New York City at a performance management seminar. I lugged along my laptop because I needed to do some writing on the train and I brought my blackberry to stay connected to email, IM, Facebook, Twitter, and Google Alerts. Of course opening the URL to an interesting Google Alert took 45 seconds to render and after I zoomed in a few times about half the text was legible but that meant I had to scroll left and right to read the article.

After a few minutes of frustration and an eye-strain induced headache I remembered I had brought my laptop.  I booted it up so I could browse my alerts without a magnifying glass. However, there was only one wireless network available and I have an ethical issue with paying the $14.95 ransom the Hyatt charges for access. If you travel at all you have probably felt my pain.

How Useful is Mobile Access to Information?
So I gave up and went in to hear the keynote presentation and low and behold a major topic was mobile access to BI. The demonstration of a user interacting with a dashboard on a blackberry had a big "cool factor" but I soon had a deja vu moment. Like my challenges earlier in the day, there just wasn't enough real estate on the screen to do any real analysis.  It was tantamount to an alert because all you could really do was forward it to someone with a full size screen to investigate. Still cool but not the real intent of mobile BI.

A View into the Future
When I got home that evening and was able to read my Google Alerts on a full size screen and there I found a link to a video called "The Sixth Sense" which was recorded back in February and shows technology that would address all the information access issues I had experienced that day. I suggest you take a few minutes to view this video from MIT Labs, it will make you say "I want that!" If you are short of time skip forward to the 5 minute mark and watch from there.

Pervasive Performance Management
In my opinion this video is a great example of the potential of technology to enable truly pervasive BI and performance management. It is the fusing of traditional BI, unstructured data access, contextual and guided search, and virtual screens.  The video is focused on the consumer but think about what this would do for productivity and decision making in the mobile and virtual enterprise.

The technology to accomplish this exists today, just take a look at the product innovations of the traditional BI vendors around unstructured data, the guided navigation capabilities from companies like Endeca, and the virtual screen technology shown in this video. But you won't see a combined experience like this tomorrow or even next year. It will take a maturation and marrying of these different technologies and the evolution of business culture to embrace it. But it really is possible.

I'm looking forward to the day when this all comes together but for now I'm heading back to the reality of today and bringing my laptop and my blackberry (and my magifying glass) on my next trip.

Expert Opinion Beats Predictive Analytics

Dave Kasabian — Wed, 11 Nov 2009 03:18:00 GMT

A few entries back I posted an entry about Information Builders' bold prediction that the Los Angeles Dodgers would win the World Series. Well, that didn't work out so well. The Dodgers didn't even make it to the series and the Yankees easily beat the Phillies as 9 out of 10 ESPN experts had predicted.
Is this a black-eye for predictive analytics just when its getting all the attention?
I think it is. Think about it, this was exactly the type of scenario that predictive analytics is supposed to excel in. Forty years of data, a consistent yearly outcome (a World Series winner), and tons of readily available statistics that can be correlated to previous outcomes to predict a future outcome. Surely, that would be more accurate than a bunch of guys who based their predictions almost completely on this years performance and who's hot going into the playoffs. But it was the experts who got it right.

To me it proves a major point about predictive analytics. It should not replace expert opinion, it should supplement it. I think expert opinion is more accurate for short-term plans and unforeseen anomalies while predictive analytics is better for determining correlation across performance indicators, longer term forecasting, and what-if scenario modeling.

In the coming age of widespread predictive analytics, don't get too caught up in the hype. Don't ignore the experts in your business, the ones that know it inside and out, from many levels of the organization.

Without these experts to put a credibility check on predictive analytics your company might just have bet the bank on The Los Angeles Dodgers.

Predictive analytics will be game changing but in most cases this should not be an "either or" choice. Both predictive analytics and expert opinion need to be involved in decision making. A balance between predictive analytics and expert opinion certainly would have predicted the Yankees in six...
... and Hideki Matsui as the Series MVP

Making Intangible ROI Tangible

Dave Kasabian — Wed, 04 Nov 2009 14:02:00 GMT

Last week I did a webcast for the IBM Cognos Innovation Center on the topic of BI ROI. The focus was on how to build a strong ROI case in the face of budget constriction. What was refreshing was that when surveyed many respondents said they are still able to justify BI investment based on the intangible values it brings to the organization such as:

- Faster, more informed decision making
- Process Improvement
- Resource Efficiency

But there are also many businesses where BI struggles to compete for funding against initiatives with more tangible "hard" ROI. My advice is to monetize the intangible ROI whenever possible. But what is the monetary value of things like faster decision making? At face value it seems difficult to define but it is possible to dive deeper into the intangible value to find pieces that can be monetized.

Here are a few ways to consider monetizing the above examples of intangible value:

Faster, more informed decision making
Look for an event at your company that had a negative impact. For instance a under performing region, an increase in materials cost, a missed sales forecast etc. What impact did that have on share price? There's a number to attach to faster, more informed decision making. Also, look for examples in your industry of how BI enabled faster decision making. One example that comes to mind is a medical supplies company that was $25M under forecast with 2 weeks left in the quarter. Through analysis of their customer database they were able to run a very targeted campaign at specific customers and made up the entire deficit in the two weeks. Without BI they would not have been able to make the "faster, more informed decision" that resulted in $25M in revenue.

Process Improvement
Aberdeen Research found leading companies that leverage BI on top of their ERP experience a 18% reduction in administrative costs. What would be the monetary impact if your business reduced admin costs by 18%? This is an easy one to calculate but for credibility sake cut the proposed savings in half and you will still likely come up with a sizable number.

Resource Efficiency
There is certainly value in freeing up resources to work on things that contribute more value to the organization but if the CFO wants a number on that try this. Calculate your cost of IT or of Finance and benchmark it against industry standards (The Hackett Group is a good source for this). What would be the cost savings if you reduce your cost to the industry standard? Now calculate these as a percentage of revenue. Let's say your cost is 2% of revenue and you are a $1B business, that's $20M. If you plan to grow your business by 10% your cost to support that growth will be $2M. Let's say resource efficiency allows you to cut that in half. There is $1M in savings.

These are generic ways to monetize the intangible value of BI. The more specific you can make them to your organization the more effective they will be. I'm always interested in hearing of unique approaches to ROI, if you have one take a minute to share it.

Which is better, expert opinion or predictive analytics? Does the World Series hold the key?

Dave Kasabian — Thu, 15 Oct 2009 17:20:00 GMT

In a previous entry I wrote that one of the pushbacks on using predictive analytics in the planning process is that business users think their "expert opinion" is more accurate than a statistical algorithm. Well, this week Information Builders issued a press release predicting the World Series winner based on the analysis of 40 years of historical data.

This would have been a "ho-hum" publicity stunt if they had picked the Yankees to win but instead they picked the Los Angeles Dodgers to win it all and in fact they predict the Yankees will lose to the Angels.

This is in direct contrast to the "expert opinion" of 10 ESPN Analysts:

9 of 10 picked the Yankees to win the World Series at the start of the playoffs (lone defector picked the Cardinals)
All 10 pick the Yankees to beat the Angles
5 of 10 pick Phillies to beat the Dodgers.

This sets us up for the battle of the century:

vs.

OK, maybe battle of the century is an overstatement, but could this have a polarizing impact for predictive analytics? Whatever the outcome this will give either the proponents or detractors of predictive analytics a real-life example to point to. Regardless of the outcome this brings some timely attention to the potential of predictive analytics. And for those of us with short attention spans we don't have to wait long for the results. We will know the answer in just a few weeks.

I will certainly blog again about this when it is all said and done and the winner is crowned. Who do you think is right, the experts or the numbers?

Blown Saves in the playoffs - Could you predict it?

Dave Kasabian — Tue, 13 Oct 2009 02:13:00 GMT

Closer? Yeah, we have a great closer!

I try not to watch too much baseball until the playoffs, too boring. I'll occasionally catch a summer Red Sox game down here in Connecticut when they are on ESPN or playing those dreaded Yankees on local cable.

But come playoff time I will tune in to the end of any playoff game that is close hoping for an exciting ending. This year has been unusual in that no one can seem to close a game anymore (with the exception of Mariano Rivera of course).

Take a look at the implosions of this murderer row of fearsome closers. Would your predictive analytics software have been able to forecast these performances?

Houston Street - Rockies

blew a 2 run lead and the winning run in the 9th inning of a playoff elimination game after closing 35 of 37 opportunities all season.

Jonathan Papelbon - Red Sox

blew a 3 run lead and was removed without finishing the 9th after saving 47 of 51 during the season.

Joe Nathan - Twins

blew a 2 run lead in the ninth to the Yankees after making 47 of 52 saves during the season.

I would love to hear how predictive analytics would have predicted any one of these performances based on the plateora of statistics that are available on these great players. I'm guessing team management and fans of the Red Sox, Twins, and Rockies would like to be enlightened as well. There's always next year!

Budgeting & Planning: "Thinkin' 'bout glory days"

Dave Kasabian — Mon, 28 Sep 2009 18:47:00 GMT

Glory Days
This week Bruce Springsteen is setting up shop for 5 straight nights at the Meadowlands at the age of 60. Coincidentally, this week Guy Haddleton is jumping back into the ring with a new planning product (called Anaplan) which was unveiled this week at DEMOfall 09 ,almost 20 years after he founded Adaytum.

No Sliding
I applaud Guy for not doing the infamous stage slide - that The Boss did at the Super Bowl - but his return to "the stage" did get me thinking about a recent trend in the Budgeting & Planning market.

The old guard returns
The early pioneers are jumping back into the market en mass. Why?...to try and recapture "the glory days" when their small companies dominated the budgeting and planning market.

"...I hope when I get old I don't sit around thinking about it but I probably will. Yeah, just sitting back trying to recapture a little of the glory of...glory days." - Glory Days, Bruce Springsteen, 1984

Rather than "sitting around talking about it" many of them are getting funding, building product and taking it to market.

Acquisitions have created room for newcomers
The planning market had become somewhat depleted over the last several years as many of the old guard was acquired by bigger vendors, but recently we are seeing the market become crowded again with new(er) vendors popping up often led by executives who were part of the old glory days looking to recreate the magic.

Trying to recapture...
Here is a list just off the top of my head (I've probably missed 1 or 2) of the new breed of Budgeting & Planning vendors with senior executives from the old guard:
Adaptive Planning
Alight Planning
Anaplan
Blueline Planning
Host Analytics
Tagetik
XLerant

The test of time
Can these vendors find a place in the void left by the acquisitions in this space? Can the "crafty veterans" they've brought in conjure up the past successes and wrestle market share away from the big names in this market? Time will tell but who knows... after all Bruce and the band still put on a better show than many acts half, or even a 3rd, their age.

IBM Cognos Express - Not a Jack in the Box

Dave Kasabian — Wed, 23 Sep 2009 13:20:00 GMT

While I was up in Ottawa at the IBM Cognos Analyst Summit last week they announced the launch of IBM Cognos Express for the mid-market. Express includes planning, analytics, and BI "all-in-one". A key point that they made when presenting the positioning of Express to us was that this is not just a repackaging of several products to create a mid-market "solution". The intent here is to deliver a single product not a solution. This may seem like splitting hairs but in my opinion it is an important difference in the mid-market. IBM Cognos has rearchitected functionality from multiple products to create a single product, with a single install, a single data store that does planning, analytics, reporting and BI.

Are Other Mid-Market Solutions Too Scary?
Ben Plummer, the Director of IBM's Cognos Mid-market business unit likened mid-market solutions from other large vendors to "cramming an enterprise-size package into a mid-market sized box..."It's like a Jack in the box, when the customer opens it up, it pops out and scares them."

Did IBM Cognos Take the Right Path?
I like that they have a product that removes some of the technical complexity that is typically required to support planning, analysis, and BI. I think the market will respond well to it. I do think that there are a couple of challenges. First is that they will now need to support a separate code base for the mid-market product which adds overhead by having to develop and support different products for the mid vs. large market. IBM Cognos will need to manage development resources and potentially conflicting market demands but certainly they are capable of absorbing the additional cost in doing this. The second challenge with a separate product is what if the company outgrows the mid-market product? IBM Cognos has something they call "guildpaths" to migrate a client from the mid-market product to the enterprise product but there would certainly be more effort than a simple upgrade.

What is right for your company?
You need to think about a few things:

If you plan to stay a mid-market size company you don't need to worry about the path to an enterprise solution so you should focus on the here and now and not what product you might be using in the future.
If you think you may grow out of the mid-market product (definitions vary, for Cognos Express it is 100 or fewer named users) how long will it take? If it is a few years off on the horizon, migration may not be as crucial. The reality is that new major versions often introduce new technology that require some level of migration, or your planning or business processes change enough to require a redesign of your planning application anyway after a few years.
If you expect your business to grow quickly out of the mid-market then it may make sense to go with a scaled down enterprise product for the mid-market that can be quickly upgraded to an enterprise solution.

Like with most things, there is no "one size fits all" when it comes to the mid-market.

Building the Case for Business Intelligence in a Turbulent Economy

Dave Kasabian — Wed, 16 Sep 2009 20:47:00 GMT

I have been asked by the IBM Cognos Innovation Center for Performance Management (ICPM) to develop a webcast series on building the case for continued funding and expansion of Business Intelligence initiatives during this difficult economy. Check out this link for more information about the webcast series.

The series is not vendor specific and will be of value to any company looking to: maximize the value of their BI investments; continue the momentum of their current initiatives; or build the case for new or expanded initiatives. To ensure that the webcast series is collaborative and interactive I will be maintaining a blog category (titled BI in a Turbulent Economy) focused specifically on this webcast series. I welcome your input and comments on the webcast series or any other “blog-worthy” BI or PM topics.

Real-world experiences, not just Analyst musings

This blog is not intended to be just another vehicle for an industry pundit to pontificate about where the market is going…there is plenty of that out there already. The intent is to be a forum for you and your peers to consider, debate, and interject your thoughts and real-world experiences on the topics that impact the BI and PM community. Sure, it’ll provide thought-leadership and some pithy market insight (I can’t help myself), but my goal here is to facilitate a dialog and exchange of thoughts, experiences, and ideas that drive more value from existing and future investments in BI and PM.

It wont work without sharing

To be effective this blog will require compelling and timely topics but just as importantly it requires active contribution from the community. I’ll regularly write about topics that I think are “top-of-mind” but you should drive content too. So please make suggestions for blog topics and survey questions, feel free to suggest entry topics pose questions to your peers, or just vent about an issue (change the names to protect the innocent, of course). This blog is about sharing and collaborating. As I say to my 4 year old daughter, “we all get more when we share.” So, set a good example for your kids, your grandchildren, or your nieces and nephews and share nicely.

Pay it forward

We all have our challenges in life and we can all use some help sometimes and that is certainly true in the world of BI. Don’t be “too busy” to share your BI experiences and knowledge, they can provide a lot of help to others. If you take the time to pay it forward it will come back to you in spades (or at least maybe you’ll get a warm and fuzzy feeling from it). Your participation will have a direct impact on the value of this forum.

Attend the webcasts, follow the blog,
join the community

It all starts on September 22nd when the first in a series of webcasts developed specifically to address the challenges of competing for funding for BI initiatives in a turbulent economy will be presented. Click here to register. The series will highlight and then dive deeper into 6 tactics for driving BI investment. Over the course of these webcasts you will learn techniques to:

Establish tangible and intangible ROI
Recycle, reduce, and reuse tools, applications, skills, and resources
Think Globally, Act Locally to gain and maintain momentum
Go deeper into the organization to drive more value and lower cost
Set and manage realistic expectations at many levels to ensure success
Recognize the changing champion and bring them on board

I will continually monitor overall participation and satisfaction as a barometer of the effectiveness of the webcast series and blog as well as the interest generated by specific topics. You can expect new entries from me on a bi-weekly basis as well as a response to your comments or feedback within 48 hours. I commit to continually tweak the material and topics to deliver the most relevant and valuable content possible. Your feedback will help me do that.

Will Predictive Analytics Lead The Way To Predictive Planning?

Dave Kasabian — Fri, 04 Sep 2009 19:50:00 GMT

Predictive Analytics is still searching for a home in the world of performance management
IBM's recent announcement of its intent to acquire of SPSS has gotten me thinking about predictive analytics and its potential application in the world of performance management. Pundits have been touting its potential for years without much traction in the real-world. Why is that?

Predictive Analytics remains a Black Box

Business users don't trust an algorithm to generate their forecast. "How can a calculation engine know my business better than me? I'm out there in the field every day. I know what's happening out there more than some propeller-head crazy regression analysis!" The psychology of it is that they are afraid of what they don't know (or understand) and certainly don't want to be held accountable to something they don't know or understand.

We Expect More and Better Forecasts
Everyone agrees that businesses are forecasting more frequently than ever before because of our current challenging economic times. All are trying to predict the bottom and gauge the intensity of a recovery. Will it be a hockey stick, a V-shaped or a U-shaped recovery? More frequent forecasting will help companies see the recovery coming and react to it more quickly than they did to the downturn. However, the bigger question is if we are expecting the business to forecast more frequently how far out should we be expecting our lines of business to forecast? Can we expect accurate 18 month rolling forecasts every month, every week? I think it is unrealistic to expect a detailed forecast that someone is willing to hang their hat on that looks more than six to nine months out.

Can Predictive Analytics Provide the Answer?
As we move from annual and quarterly forecasting to monthly, weekly or even daily forecasting. Let the line managers build the short-term forecasts and hold them accountable to them. But don't bog them down trying to forecast what their sales will be 18 months from now. This is where I think predictive analytics can fill the gaps. Predictive analytics can model the outlying periods and create forecasts for those periods using predictive algorithms rather than gut feel and pipeline (both of which lose accuracy significantly when looking more than a few months out).

Combined with Field Knowledge
The results of these predictive models could then be provided to the field. If they disagree with the forecasts fine, but they need to document why. Why are the numbers we provided not realistic? Is there a big deal looming 12 months out? Is there a costly initiative that the model didn't take into account? If so let's consider the impact and adapt the model, if not then the model stands.

The bottom line is that if we are expecting managers to forecast much more frequently we need to be conscious of the effort involved and the accuracy expected. Having them forecast deviation from the predictive model rather than developing a full long-term reforecast saves time and effort and more than likely more accurate rolling forecasts. I think incorporation of predictive analytics into the planning process would take full advantage of the gut instinct and business knowledge in the field and the predictive capabilities of technology without trying to make the business user think like a PhD.

What do you think? Is this a way to use predictive analytics effectively without having to push it out to the masses?

NetSuite Should Acquire Adaptive Planning

Dave Kasabian — Thu, 27 Aug 2009 16:51:54 GMT

(Caveat: I have absolutely no inside information about the strategic plans of either NetSuite or Adaptive Planning)

This seems to be an acquisition that makes sense. I know they have only been partners for a couple of months but why wait? They could continue a nice comfortable partnership but my advice would be to take the plunge and tie the knot now (note: this advice comes from a man who didn't get married until he was 40).

Why Not Wait?
Why am I pushing a quick marriage on these two SaaS vendors?

Their combined SaaS story is more powerful together than individually.
On-premise ERP vendors have successfully jumped headfirst into the BI and PM market through acquisition, SaaS ERP vendors would benefit form following suit.
It would expand their combined revenue opportunity just as it has for the on-premise vendors.
The combination provides a breadth of SaaS solutions that would increase the credibility and viability of the SaaS alternative to on-premise financial applications.
The publicity will generate market awareness that will benefit the combined entity and the overall SaaS market.

Beware of "The Seinfeld Effect" of Partnering
The reason for vendor partnerships prior to acquisition is usually to test the market for the combined product lines, determine integration strategies and expose any underlying issues with the partners' product lines.

Those of us who watched Seinfeld incessantly remember how notorious he was for finding some inane fault with every woman he ever dated on the show.

Jerry could always find some "flaw' in any person that would eventually sabotage the success of every one of his relationships. This can happen in software vendor partnerships as well. All software has "warts" but some can be removed and some need to be overlooked. Sometimes partnerships lack the commitment to overcome the barriers that need to be addressed and work around those that cannot. An acquisition creates that "for better or worse", no finger pointing, commitment to make it work that prospects want from their vendor.

So, NetSuite and Adaptive Planning, take the plunge - make the commitment. You know you both want to. Do it for yourself, do it for the SaaS market, do it for your investors. Work out a nice prenup and get on with it!

What role should SaaS play in your BI and PM strategy?

Dave Kasabian — Fri, 07 Aug 2009 14:07:00 GMT

This is a question that many clients ask. "Should SaaS be part of my BI (and PM) strategy?" When I answer yes, the obvious next question is "how?" The complete answer differs by client but there are some common threads regarding SaaS' place and fitting it into the on-premise BI environment.

Lessons Learned From LucidEra
A recent blog by Ted Cuzzillio highlights some of the challenges SaaS BI faces. He provides some great insight from Ken Rudin (founder and CEO) and Darren Cunningham from the now defunct LucidEra about why their SaaS model failed. I suggest you read the entire blog as it has some great insight from Ken and Darren about why some of their customers struggled with SaaS BI. Both SaaS users/prospects and other SaaS vendors can learn from Ken and Darren's frank discussion of their experience.

My take on their plight is that their customers were looking to SaaS BI to provide push BI vs. pull BI. What I mean by that is that their customers did not want to build their own queries and information delivery, they wanted it to be prepackaged and turnkey. The following excerpt from Ted's blog sums this up nicely:

When he questioned further, he found they'd been doing "essentially nothing interesting" with the service. They had been running the simplest reports, not asking new questions or reaching for new insight in any way. "We were offering a powerful tool," he said, "and they were saying they didn't know what to do with this thing." He compared it to installing an MRI machine in someone's living room and expecting the person to diagnose themselves.

SaaS BI has its Place
I think this highlights quite well where SaaS BI and PM fits in the overall strategy. If you are looking at a process (and related queries and output) that can be standardized and is not expected to dynamically change on a regular basis then SaaS makes a lot of sense. In this situation a SaaS solution can be implemented more quickly and at less cost than an on-premise solution. But more dynamic processes that require in depth knowledge of the data and require ad-hoc queries and information delivery tend to be addressed better with an on-premise solution.

So, in my humble opinion in most companies SaaS BI should not be looked at as your BI strategy but as supplementing your BI strategy. With that said, I think SaaS BI has a place in almost any company if requirements are properly assessed and expectations are appropriately set.