Ask an FEI researcher about...business intelligence.

• Author: Sinnett, William M.
• Position: Resources

After reading the article "Leveraging BPI Applications to Drive Value" in the May 2002 issue of Financial Executive, I'd like to know: What are the current trends in business intelligence, and where is it heading?

We asked Dean Sorensen, one of the authors of the article, to provide a response (and also refer to the "Special Report" beginning on page 45). Sorensen says that the trend towards integration continues as vendors look for ways to differentiate their products. Corporate Performance Management (CPM) is a term that has evolved to describe applications that have integrated planning, budgeting, reporting and performance management capabilities.

Cartesis (www.cartesis.com) has been a pioneer in integrated financial management systems. Strategic Financial Management (SFM[TM]) integrates strategic planning, budgeting, reporting, consolidation and performance measurement. "Magnitude," its high-end solution, supports SFM.

Recently, Cognos (www.cognos.com) acquired Adaytum (planning and budgeting) to improve its ability to provide CPM. However, vendors such as Hyperion, Armstrong Laing Group and SAS Institute (see table in the third column) are taking this integration to the next level by integrating activity-based costing into their applications. The result: process integration.

Sorensen believes that process integration will become even more important over the coming years as CFOs address four key business trends.

1. Expanding CFO Role

   CFOs are increasingly being expected to play a more active role in shaping and executing strategy. The ability to translate strategy into business processes provides the basis to more effectively execute strategy. Moreover, these same capabilities enable organizations to more effectively reduce costs, while simultaneously delivering superior service and value.

2. Sarbanes-Oxley Act of 2002

   Financial executives are now under greater scrutiny, with legislation such as Sarbanes-Oxley imposing new requirements. Process integration provides powerful tools to address these growing regulatory requirements.

3. Role of Budgeting

   There is growing sentiment that budgeting, in its current form, is not appropriate for today's economy. Many believe that it actually detracts from value. Process integration provides new options that aren't otherwise available.

4. Scarce Investment Capital

   In light of current economic conditions, CFOs are seeking a clearer connection between BPI capabilities and the bottom line to justify such...