In future posts, I will hopefully have the chance to articulate the overarching principles of our Office the CFO strategy and how our Corporate Performance Management strategy supports this, but those of you who are interested, you can watch the presentation given by Adam Thier and myself at SAPPHIRE Vienna 2007, which spells it out in great detail. As I had the chance to lead our due diligence of OutlookSoft, I want to take this opportunity to point out what we saw in OutlookSoft that made it so compelling for SAP and our customers.
The first aspect of OutlookSoft that we found compelling was unification. The entire performance management experience is driven by the same metaphors and metadata, regardless of whether or not one is conducting planning, budgeting, and forecasting, legal or management consolidation, or building financial reports. For ALL of these processes, the dimensional model is the SAME. The business rules are the SAME. The user-experience is the SAME. This dramatically reduces the TCO of the solution and makes it much simpler to design performance management processes that span the entire value chain of an organization, and not make customers pay a penalty if they want to expand beyond planning to management consolidation to financial reporting.
This is in stark contrast to the offerings of our competitors, like Oracle's Hyperion System 9, for example, which is a patchwork of dozens of acquisitions that are almost completely unintegrated across the same set of processes. The only thing integrated about System 9 is the fact that you you can get all of this disparate technology on the same DVD. Ok, that's not entirely true, it does share "common security" and a "common installer", which a few customers probably find compelling. When you use Hyperion Planning, it relies on the ancient and soon-to-be legacy technology of Essbase, a proprietary, decade-old multidimensional engine that has severe scalability issues due to its inability to handle sparse data and time-consuming cube recalculation times. Do you want to write a formatted financial report off of your Hyperion Planning data? You need Hyperion Financial Reporting. Do you want to slice and dice your Hyperion Planning data? You need Hyperion Web Analysis. Contrast this with OutlookSoft, where the EXACT SAME APPLICATION is used for financial reporting, slice-and-dice, and planning, with none of the hassles of having multiple reporting applications and legacy multidimensional databases to maintain.
And don't even THINK you can get any economies of scale by introducing consolidation capabilities into your existing Hyperion Planning landscape. For that, Hyperion licenses a SEPARATE application, Hyperion Financial Management, which is COMPLETELY DIFFERENT from Hyperion Planning. Same database? Nope. Same metadata? Nope. Same dimensional structure? Nope. Sames business rules definition? Nope. Want to bring together your actual and plan data? You do the same thing with Hyperion's own applications as you would do to port data between two applications from completely separate vendors: you move the data over using a flat file! Contrast this with OutlookSoft, where the EXACT SAME APPLICATION is used for consolidation, with the same database, same metadata, same dimensional structure, same business rules, etc. with none of the hassles of having multiple reporting applications and legacy multidimensional databases to maintain.
Now, to be fair, Oracle has proven itself astute in reconciling its large technology assets before, and that is likely to be true here as well. So Hyperion's mediocre BI tools, like Web Analysis, Financial Reporting, Interactive Reporting, and Production Reporting, that are crucial to extracting any value out of their disparate applications are almost certainly not going to live very long. With the Siebel acquisition, Oracle declared that Siebel Analytics would become the de facto BI offering (although I still don't think the Discoverer and Daily Business Intelligence teams have seen the memo yet), and this offering was re-christened Oracle BI EE 10g. And what does that mean for Hyperion's customers? It means that Hyperion customers can look forward to having to replace all of the Business Intelligence investments they made with the Hyperion tools and migrate to the Oracle BI EE 10g tools, and having yet another set of metadata, business logic, and architectural headaches to worry about. But that's not the worst of it. It has never been a secret that Oracle's database team has held the development power within the company, and they have invested a lot of energy into building up the Analytic Workspaces for multidimensional functionality within the most recent versions of the database. Given the fact that the database team rules the roost and is one of the only area of the company besides the M&A group that is still trying to innovate after Oracle's decision to turn from software company into technology holding company, it would be very surprising to see Essbase live more than a year or two, which means that Hyperion customers can also look forward to a forced migration to Oracle's Analytic Workspaces technology. After all, Oracle may provide"Applications Unlimited", but they never said anything about "Middleware Unlimited", so there is no guarantee about the life of acquired middleware products, and inexplicably, Hyperion is part of the middleware group at Oracle. I don't know about you, but any company that thinks the same group that develops the java application server should also be responsible for statutory consolidation capabilities for IFRS probably doesn't understand CPM that well. But I digress. This blog is about OutlookSoft and SAP, and why OutlookSoft's unification is so valuable for customers. That should be readily apparent now.
Another aspect of OutlookSoft that customers find incredibly compelling is its very strong usability. In looking at every CPM vendors offerings, we found that OutlookSoft far and away had the most usable applications, with powerful, patented functionality that could really extract the full value of Microsoft Office, well beyond what anyone else had been able to accomplish in the industry. With OutlookSoft, end-users can leverage their entire skill set with Microsoft Excel without having to suffer from the constraints of other vendors add-ins. ALL formatting, formula operations, and commentary, etc. capabilities can be used in Excel, while still maintaining the value proposition of a centralized performance management environment on a common database. Every other tool in the market is either "Excel-like" or "Excel-lite", placing unnecessary constraints on the users that frustrate them to no end. What's the point of giving end-users the appearance of Excel when they can't use the full power of the solution?
At this point, Oracle probably has 10-15 Excel front-end clients, many of which they acquired from Hyperion. Essbase had an Excel-client (historically one of the best in the industry), HFM had one, Hyperion Planning had one, and other applications had them as well. For many years, these multiple Excel clients didn't even work with each other. The idea then to unify all of these Excel-clients manifested itself with SmartView, which came out a couple of years ago. SmartView was a great idea, since there would finally be one Excel client for all Hyperion applications. It only had one problem: it provided the lowest common denominator of functionality across all the individual Excel plug-ins. Much of the power of the Essbase Excel add-in could not be achieved, so customers were left in a lurch. Of course, now things should be much easier for Oracle customers, since Oracle BI EE 10g, which will become the BI tool of choice for Hyperion applications, also has its own lousy Excel add-in. In stark contrast, as mentioned before, OutlookSoft has one Excel add-in, and it's way better than anything else out there.
A third aspect of OutlookSoft that is incredibly compelling is the notion of business process flows. While the dinosaur, monolithic architectures of previous generations of performance management solutions have enforced process siloes, what companies really want is the ability to manage the entire performance management cycle holistically in a process framework. OutlookSoft allows you to do exactly that. With prepackaged Business Process Flows for monthly budgeting, management consolidation, legal consolidation, CapEx planning, Workforce Planning, etc., the entire set of roles, dimensional entities, input schedules, etc. are all packaged together and can be orchestrated across the entire organization. Financial analysts can see exactly where the organization is in terms of who is in what step of a process, and end-users know exactly where they came from, where they are, and where they have to go next in the performance management process. This is a huge differentiator and something that none of our competitors do. Hyperion has been talking about adding comprehensive, suite-wide workflow capabilities to its disjointed collection of applications for years, but so far, it's still talk.
Finally, because OutlookSoft did not have to invest in stapling a large portfolio of mediocre, acquired products together, they were able to invest heavily in modern technology like Service Oriented Architecture to provide a high degree of flexibility and interoperability with other applications. For example, in the Business Process Flows capability of OutlookSoft, ANY web service that has a standard interface exposed by a WSDL can be consumed so that end-users can stitch together composite application processes using standards-based technology. Contrast this with the architectures of our competitors, who still use CORBA and decade-old MOLAP technologies as their underlying architectures and you can understand very quickly why our technology is vastly superior.
Of course, technology for its own sake has little value when it comes to business applications, and it is clear that OutlookSoft's architecture confers upon customers huge business advantages. With OutlookSoft's SOA approach, business processes can be reconfigured on the fly by taking advantage of the underlying application services available to give customers the agility they need in an environment that changes on a dime. By avoiding a pure reliance on legacy MOLAP technology, OutlookSoft can aggregate information from any level of a dimensional hierarchy, so you can see the impact of changes to your models made deep at the leaf level in the application reflected at a much higher aggregate level without having to go through the expensive and time-consuming process of recalculating cubes.
But OutlookSoft is only the end of the first chapter of our story. As we combine it with the deep profitability modeling capabilities provided by Acorn and the visionary strategy management capabilities of Pilot, and then intertwine it with the Governance, Risk, and Compliance functionality that SAP has pioneered, the end-results far surpass the depth and breadth of both vision and functionality of any other CPM vendors in the space. When combined with SAP's Business Process Platform, defined as the combination of the deep application functionality provided by our market-leading Business Suite and the enterprise class technology backbone of SAP NetWeaver, we will be the only vendor in the industry to offer BOTH the empowerment and flexibility that finance end-users need for performance management along with the enterprise class backbone that IT organizations have come to rely on.
The Next Generation of Corporate Performance Management solutions for the Finance Professional of 2010 is here. Judging from the response of our customers and more interestingly, that of our competitor's customers, it is clear that they recognize the value, innovation, and vision of what SAP is delivering, and this is only the beginning! Please contact me to learn more.
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