Host Analytics has added new analytics and reporting resources to its cloud-based performance management suite. Business Analytics will offer a broad set of built-in analytics and reporting capabilities or, for companies with an existing business intelligence infrastructure (from vendors such as IBM, Infor, Oracle or SAP), the option of a self-service approach. I believe these new analytics and reporting capabilities give companies considering only on-premises performance management deployments another reason to consider a cloud-based option; for Host Analytics it broadens the set of features it has to compete with other cloud-based vendors.
People in finance and accounting have been doing analytics for centuries: balance sheet ratio analysis, margin analysis and financial performance metrics (to name three) are established, well-developed techniques in finance departments. The challenges they face are not with the analytics themselves but with the data being analyzed. Our Finance Analytics benchmark research finds that, for example, only 31 percent of finance organizations consider their data used to prepare metrics and indicators to manage performance to be accurate. More than three-fourths (78%) of finance professionals said that they spend the biggest chunk of time on getting the data ready for analysis. Half (51%) of companies said that the difficulty of collecting data impedes the creation of useful metrics and key performance indicators (KPIs). These are serious issues in terms of efficiency and effective use of information.
With its Business Analytics Host Analytics attempts to address these issues by giving people in Finance access to data that currently may not be able to get, and not just financial data. In addition to prebuilt connectors for a variety of ERP systems (including those from Epicor, Intaact, Microsoft Dynamics GP, NetSuite and SAP ByDesign), Business Analytics can pull in sales pipeline data from Salesforce.com or Siebel, marketing analytics from Eloqua or Marketo, operations analytics from Plex or SAP and HR analytic data from PeopleSoft and SuccessFactors.
To cut the time spent in preparing data, self-service capabilities are important. Fully 60 percent of finance professionals in our research said that analytics are too hard to build and maintain, and half said the process is too slow. One reason for the latter is that many analytics are created by IT departments or require IT intervention.
Combining financial and operational data can address another issue we find in our research. Understandably, Finance departments focus their efforts on standard financial analytics but pay less attention to areas where the combination of financial and operational data could produce analytics that provide deeper insight or better performance metrics. For example, incorporating up-to-date pipeline or lead conversion information in a weekly or monthly financial review can be useful in providing leading indicators of out- or under-performance relative to the plan, as well as useful trend data. Having detailed headcount data can help executives uncover the root causes of cost variances to determine what steps to take – if any – and to what degree current projections must be modified to reflect recent experiences. And having ready access to source data addresses another issue: Only 31 percent of finance organizations said the data used to prepare metrics and indicators is accurate enough to manage performance.
Providing Finance, HR and potentially other functions of a corporation with self-service analytic capabilities addresses another often-unmet need. Nearly all (89%) of participants in our Finance Analytics research said that it’s important to make it simpler to provide analytics to those that need them.
The addition of Business Analytics follows Host Analytics’ introduction of its Decision Hub, which I reviewed last year. The Hub provides a common data repository for information that companies can access, which may be from third-party sources as well as internal. It is another component that makes it easier for organizations to work with a structured, common data set.
I recommend that finance organizations considering the purchase of a system that can perform any combination of planning, budgeting, consolidating and reporting consider a cloud-based approach. This is especially true for midsize companies (those with between 100 and 999 employees, by our definition) or divisions of larger corporations; both often lack the scale or resources to support the underlying IT infrastructure or find that managing these capabilities in-house chews up too much valuable management time. If your company assessed a cloud-based offering more than a year ago and decided against it, I suggest it’s time to re-evaluate your options. If your company is evaluating cloud-based performance management systems, I recommend including Host Analytics in that assessment.
Robert Kugel – SVP Research