Magic Quadrant for Corporate Performance Management Suites

Transcription

1 Magic Quadrant for Corporate Performance Management Suites 19 March 2014 ID:G Analyst(s): Christopher Iervolino, John E. Van Decker VIEW SUMMARY Corporate performance management suites facilitate efficient, compliant and transparent processes within the office of finance. They enable CFOs and other business leaders to effectively guide strategic direction and increase organizational agility. Market Definition/Description The corporate performance management (CPM) application suite market is mature and composed of vendors offering solutions that are widely adopted by large and midsize organizations. (Midsize businesses have approximately 100 to 1,000 employees, and annual revenue of less than $1 billion.) We categorize CPM deployments into one of two types: Office of finance CPM largely involves the improvement of financial processes Strategic CPM supports organizationwide transformation and growth Driving higher levels of CPM maturity requires CFOs to pay attention to both types of deployments (see "Getting More Value From CPM: Strategic Versus Office of Finance CPM"). Gartner defines performance management as "the combination of management methodologies, metrics and technologies that enables users to define, monitor and optimize results and outcomes to achieve personal or departmental objectives, while enabling alignment with strategic objectives across multiple organizational levels: personal, process, group, departmental, corporate or business ecosystem" (see "Hype Cycle for Performance Management, 2013"). Overlap exists between CPM and performance management, but their alignment can be improved by using well designed CPM processes. Gartner uses EVIDENCE 1 Gartner conducted a survey of application leaders in organizations using CPM products. The survey participants were customer references nominated by each of the 16 CPM suite vendors in this Magic Quadrant. These participants were asked 21 questions about their experiences with their CPM vendors and solutions. The results were used to help assess the CPM suite market. For 2013, we obtained 372 responses (up from 275 in 2012) representing companies headquartered across six regions. Regions and percent of responses per region are: North America, 57% Western Europe, 25% Latin America, 4% Central/Eastern Europe, 6% Asia/Pacific region, 5% Middle East and Africa, 3% Gartner CPM reference visits and calls throughout the year contributed to our vendor evaluations. NOTE 1 ADVANCED ANALYTICS DEFINED Advanced analytics analyzes structured and unstructured data, using sophisticated quantitative methods (for example, statistics, prescriptive and predictive data mining, simulation, and optimization) to produce insights that traditional approaches to BI, such as query and reporting, are unlikely to discover. It is frequently applied to solve business problems and identify opportunities by providing better forecasts, causal understanding, pattern identification, and process and resource optimization, as well as to assist with scenario planning processes. NOTE 2 1/26

2 the term CPM to highlight corporate finance's critical role in managing these processes and applications. Increasingly, competitive business environments require that organizations find new ways to reduce costs, while simultaneously improving their ability to manage corporate strategy. Corporate finance is uniquely situated to address both requirements; to do so, it needs improved tools that support a more strategic focus. Traditionally, finance applications have been designed primarily for accuracy, compliance and efficiency. The availability of more capable financial planning tools, expansion of related cloud, in memory computing (IMC), mobile, social and advanced analytics (see Note 1) is providing the office of finance with additional options to address its more strategic needs (see "Strategic CPM as a Driver for Organizational Performance Management"). In addition to the term CPM, vendors use descriptions such as enterprise performance management (EPM) and simply performance management. The use of one label or another is irrelevant. What's important is the recognition that no single current offering can provide end to end performance management support. Organizational performance management encompasses distinct domain specific processes. CPM's role in enabling a broader approach to performance management is firmly established; however, CPM offerings are still evolving. CPM efforts typically focus on financial budgeting, planning and forecasting (BP&F), or financial consolidation and reporting. These efforts are being extended to link to and support related operational planning processes, such as workforce, sales, capital, demand and IT financial planning, as well as other areas where driver based planning is critical. CPM suites are being extended into functional domains to support these specific processes and/or provide the process to link these operational areas back to financial and enterprise performance targets. CPM suite vendors tracked in this Magic Quadrant support office of finance CPM and strategic CPM processes; however, vendors' ability to address these two areas varies. This Magic Quadrant presents a global view of the primary vendors that offer broad CPM suites. Additional domain specific performance management offerings are not evaluated in this Magic Quadrant, but are covered in other Gartner research. Processes and characteristics can vary among product components of offerings for office of finance CPM and strategic CPM. For instance, an office of finance CPM budgeting process can have strategic value if it accurately allocates resources to initiatives of strategic organizational importance. Conversely, if the strategic planning process is inaccurate or simply a finance focused mechanical exercise that doesn't inform strategic decisions, then it can resemble more of an office of finance CPM process. This classification serves to highlight the differences among vendor offerings and market characteristics. Five Components of a CPM Suite Financial Consolidation and Close Management This type of application is a fundamental part of CPM and a core component of a CPM suite. Support for this process is central to the responsibilities of the office of finance, because it creates the audited, enterprise level view of financial information for accurate and timely external reporting, insightful management reports and variance analysis from targets. Financial consolidation and close management applications enable organizations to reconcile, consolidate and summarize financial data based on different accounting standards and government regulations. They provide financial results at local, NEXUS OF FORCES The Nexus of Forces is composed of powerful information, cloud, mobile and social computing technology. Disruptive products will leverage the combination of these forces. NOTE 3 RANGE OF MULTITENANT SAAS AND CLOUD HOSTED SOLUTIONS Cloud based solutions can be characterized by their degree of "cloudiness," which further complicates the product selection effort. At one end of the cloud spectrum are cloud hosted solutions typically offered by on premises CPM vendors that have made their traditional offerings available in the cloud, and those built from the ground up as multitenant solutions with high levels of shared technology. At the other end of the spectrum are cloud hosted offerings and multitenant offerings with high levels of shared technology (see "How to Evaluate CPM Cloud Solutions"). EVALUATION CRITERIA DEFINITIONS Ability to Execute Product/Service: Core goods and services offered by the vendor for the defined market. This includes current product/service capabilities, quality, feature sets, skills and so on, whether offered natively or through OEM agreements/partnerships as defined in the market definition and detailed in the subcriteria. Overall Viability: Viability includes an assessment of the overall organization's financial health, the financial and practical success of the business unit, and the likelihood that the individual business unit will continue investing in the product, will continue offering the product and will advance the state of the art within the organization's portfolio of products. Sales Execution/Pricing: The vendor's capabilities in all presales activities and the structure that supports them. This includes deal management, pricing and negotiation, presales support, and the overall effectiveness of the sales channel. Market Responsiveness/Record: Ability to respond, change direction, be flexible and achieve competitive success as opportunities develop, competitors act, customer needs evolve and market dynamics change. This criterion also considers the vendor's history of 2/26

3 regional or business unit subconsolidations. These applications require complex transaction processing rules to automate intercompany transaction management (elimination and matching), as well as complex currency translation and revaluation capabilities. They also maintain a detailed audit trail of all transactions to arrive at consolidated financial results. Expanded capabilities are provided in financial close solutions or by separate offerings that provide additional close management functionality. These capabilities primarily include improved close control process management, reconciliation management, intercompany activity management, journal entry control, financial control testing and tax data provisioning. Financial and Management Reporting and Disclosure The CPM financial close process has specific disclosure and reporting requirements that warrant specialized reporting tools. CPM applications that support financial consolidation and budgeting, for example, require some output to be formatted as structured financial statements; therefore, reporting tools need additional logic and presentation capabilities to handle these requirements (for example, calculation rules for creating a cash flow statement from profit and loss and balance sheet data). They should support generally accepted accounting principles (GAAP) presentation rules, such as U.S. GAAP and International Financial Reporting Standards (IFRS), to enable the preparation of statutory financial statements with appropriate commentary and supplementary notes. Many financial reporting solutions incorporate process controls for reporting and disclosure, such as templates, collaboration capabilities between the company and the financial statement publisher, business rules, workflow, and audit trails to better meet regulatory, compliance and governance programs. In addition, they should support financial reporting technologies, such as extensible Business Reporting Language (XBRL). CPM applications should provide the reporting capabilities required to produce the management reports that executives at corporate and business unit levels use to manage and explain financial performance. These solutions should also facilitate analysis by providing drill down and analytics against more detailed, and possibly transactional, data. Financial Budgeting, Planning and Forecasting In CPM, the budgeting process sets short term targets for revenue, expenditures and cash generation, and usually has a duration of one year. It typically uses financial classifications found in the general ledger to classify financial goals and targets. The budget (and the budgeting process), typically wholly owned and controlled by the CFO, needs to link with underlying finance systems. The budgeting process usually acts as more of a fixed control mechanism than does planning and forecasting. Office of finance CPM planning and forecasting processes consist of a financial modeling engine with an integrated profit and loss balance sheet and cash flow forecasting capability. This feature distinguishes CPM from other analytics applications that also create plans and forecasts (such as applications for sales and operations planning or marketing campaign planning). These capabilities support the creation, review and approval of financially focused plans and forecasts, as well as their associated workflow. They should maintain an audit trail of all associated activity. Planning generally differs from budgeting in two ways: First, the time periods involved can be longer term (three to five years is common) and, second, the focus is less on budget line items and more on business drivers that impact the financial line items. This means that planning is more relevant to operational managers who do not run their part of the business using general ledger codes. Executives use longer term financial plans to evaluate the responsiveness. Marketing Execution: The clarity, quality, creativity and efficacy of programs designed to deliver the organization's message to influence the market, promote the brand and business, increase awareness of the products, and establish a positive identification with the product/brand and organization in the minds of buyers. This "mind share" can be driven by a combination of publicity, promotional initiatives, thought leadership, word of mouth and sales activities. Customer Experience: Relationships, products and services/programs that enable clients to be successful with the products evaluated. Specifically, this includes the ways customers receive technical support or account support. This can also include ancillary tools, customer support programs (and the quality thereof), availability of user groups, service level agreements and so on. Operations: The ability of the organization to meet its goals and commitments. Factors include the quality of the organizational structure, including skills, experiences, programs, systems and other vehicles that enable the organization to operate effectively and efficiently on an ongoing basis. Completeness of Vision Market Understanding: Ability of the vendor to understand buyers' wants and needs and to translate those into products and services. Vendors that show the highest degree of vision listen to and understand buyers' wants and needs, and can shape or enhance those with their added vision. Marketing Strategy: A clear, differentiated set of messages consistently communicated throughout the organization and externalized through the website, advertising, customer programs and positioning statements. Sales Strategy: The strategy for selling products that uses the appropriate network of direct and indirect sales, marketing, service, and communication affiliates that extend the scope and depth of market reach, skills, expertise, technologies, services and the customer base. Offering (Product) Strategy: The vendor's approach to product development and delivery that emphasizes differentiation, functionality, methodology and feature sets as they map to current and future requirements. Business Model: The soundness and logic of the vendor's underlying business proposition. Vertical/Industry Strategy: The vendor's strategy to direct resources, skills and offerings to meet the 3/26

4 effects of alternative strategies, such as merger and acquisition activity. They typically represent a high level perspective of revenue, expenses, balance sheet items and cash flow. Strategic Planning and Forecasting, and Strategy Management Strategic planning and forecasting applications should not only support aspects of strategic planning, such as initiative management, but also provide links to strategy maps in scorecard applications. These applications may provide other detailed planning capabilities, such as workforce, sales, capital, demand, IT financial planning and tax planning. These applications may include functionality to extend planning to operational domains, enabling business users to model revenue streams using business drivers such as price, volume and discounts. Vendor capabilities vary, and some processes can be limited by a solution's capability to leverage transactional information, and to support in memory, social and mobile computing. specific needs of individual market segments, including vertical markets. Innovation: Direct, related, complementary and synergistic layouts of resources, expertise or capital for investment, consolidation, defensive or pre emptive purposes. Geographic Strategy: The vendor's strategy to direct resources, skills and offerings to meet the specific needs of geographies outside the "home" or native geography, either directly or through partners, channels and subsidiaries as appropriate for that geography and market. These applications should support sophisticated forecasting and modeling, which involve extrapolating new versions of plans and budgets based on comparing actual results with budgets, the analysis of historical data and what if analysis. Strategic forecasting typically differs from budgeting in that once a budget is created many organizations tend to strictly adhere to it, regardless of changes to the business environment. The goal of strategic forecasting is not only to create more accurate predictions based on experience, but also to predict alternative outcomes if business conditions change. Financial forecasting is often simple (for example, add three months' actual data to nine months' budget data). Strategic forecasting can incorporate statistical techniques to help predict performance and guide strategy. Strategic planning also involves strategy management. These solutions provide a packaged approach to support strategic planning, modeling and monitoring to improve corporate performance, accelerate management decision making and facilitate collaboration. They're usually tied to strategy maps or methodologies, such as the balanced scorecard. Strategy management comprises: Scorecards and strategy maps Used to record strategies, objectives and tasks; monitor performance; identify, explain and maintain the relationship of key performance indicators (KPIs); and enable related communications and collaboration capabilities. Initiative/goal management Includes project management like tools to enable designated managers to execute specific tasks related to a strategy. Dashboards Used to aggregate and intuitively display metrics and KPIs, enabling managers to examine results at a glance or analyze them interactively using embedded filters and drill down/across capabilities. Profitability Modeling and Optimization Profitability modeling and optimization (PM&O) includes activity based costing (ABC) and activity based management (ABM) applications that determine and allocate costs at a highly granular level for example, to determine the cost of each activity that an agent may perform across all channels in a customer service contact center. This information can be applied to various cost objects, including products, customers and customer segments, to help determine product and customer profitability. PM&O applications often take this approach further to enable users to model the impact on the 4/26

5 profitability of different cost and resource allocation strategies. This approach can help organizations determine optimal product and service offerings in packaging, bundling and pricing, as well as optimize channel strategies. PM&O applications can provide functionality that enables executives to plan the impact of different strategies on profitability from different perspectives, such as customer or product. Organizations can use these solutions to model business processes and provide other advanced features, such as constraint based, bidirectional and predictive modeling. Magic Quadrant Figure 1. Magic Quadrant for Corporate Performance Management Suites 5/26

6 Source: Gartner (March 2014) Vendor and Adaptive Insights Adaptive Insights has entered the Magic Quadrant as Visionary, rather than a Niche Player. Elevenyear old Adaptive Planning was renamed Adaptive Insights in February 2014 to reflect its expanded CPM and financial analytics product suite. It was the first pure play, multitenant, cloud based CPM 6/26

7 vendor whose offerings now include budgeting, forecasting, reporting, financial consolidations, dashboards, modeling, analysis and collaboration. With its 2012 acquisition of MyDials, rebranded Adaptive Discovery, Adaptive has an integrated business intelligence (BI) offering. Given the growing popularity of pure play SaaS CPM, Adaptive's 2013 revenue growth was much higher than the market average. It attracted $45 million of further funding during 2013, and maintained strategic partnerships with additional cloud vendors, such as an OEM partnership with NetSuite. Adaptive's product, installation and vendor satisfaction scores were among the highest in this year's survey. 1 Furthermore, it achieved these scores from a large number of CPM customers and rapid growth as the vendor built on its established BP&F user base with a broader CPM offering. The vendor's embedded CPM analytics capability has benefited from the MyDials acquisition and has continued to expand the suite's collaboration and ios mobile device support. Adaptive Consolidation was introduced in April 2013, and, as a result, is not yet as widely used as other modules in the CPM suite. Adaptive reports having more than 1,900 customers. This compares favorably with the other Visionaries in this Magic Quadrant; however, this includes a mix of small, midsize and large customers. Although Adaptive's average customer size is growing, larger organizations should evaluate references of similar CPM process complexity. The vendor has direct and/or indirect sales, consulting and support capabilities in North America, South America, Asia/Pacific, EMEA and Japan. The majority of its customers are in North America. Prospective customers outside this region should appraise the vendor's local capabilities. Axiom EPM New in the CPM Magic Quadrant for 2014, Axiom EPM was founded in 2006 as a consulting organization and is privately funded. Its solution, launched in 2008, currently supports planning and budgeting (with additional capital and workforce planning capability), strategy management, profitability modeling (including patient profitability) and financial reporting. The solution leverages a Microsoft.NET architecture. Axiom's product, installation and vendor satisfaction scores were among the highest in this year's survey, especially for consulting, sales and help desk support. The solution's interface is straightforward, and the suite is available on premises or hosted (through Microsoft's Windows Azure platform). Axiom EPM has industry expertise in the healthcare and financial verticals, accounting for approximately two thirds of its customer base. Its suite utilizes HTML5 for mobile information delivery, is binary large object (BLOB) enabled to support data types such as images and audio, and integrates with Microsoft SQL Server and 7/26

8 Oracle Database. It leverages relational data stores for complex modeling and can accommodate transactional data. Bitam Axiom EPM's office of finance capabilities are limited compared with some other CPM suite vendors. It added process controls in 2013 to support the financial close, but prospective customers with complex close requirements should assess these capabilities against other vendors' offerings. Although Axiom EPM can support a variety of industries, it has fewer consulting and support resources outside the healthcare and financial verticals. Project management should ensure that the implementation team has sufficient industry expertise. The majority of the vendor's sales, consulting and support capabilities are in North America. Prospective customers outside this region should appraise the vendor's local consulting and support capabilities. Bitam's offerings are best suited for midsize companies seeking low cost options to support their officeof finance CPM. The vendor provides CPM and BI solutions (see "Magic Quadrant for Business Intelligence and Analytics Platforms"). Its CPM suite includes Ektos Financial for planning and budgeting, Stratego for strategy management, and Papiro for organizational and transactional reporting. Bitam has consistently received above average product satisfaction scores in CPM Magic Quadrant surveys, especially related to BP&F support. Other areas of high customer satisfaction relate to flexibility, ease of use and the solution's ability to link strategic financial and operational planning processes. Bitam's CPM suite benefits from embedded functionality available in its BI offering. The vendor's solution has strong cross platform capability. It supports a Microsoft stack, as well as non Microsoft platforms, such as Oracle, SAP Sybase, Teradata, IBM Netezza and SAP Business Information Warehouse (BW). Financial, statutory and management reporting are supported via a financial analytical model based on the Artus BI platform. Bitam's operations have traditionally been limited mainly to midsize organizations in its home markets, largely in Latin America. Bitam has customers, but little brand recognition, in other regions, such as Spain, North America and Asia. Customers outside the vendor's home regions should appraise its local consulting and support capabilities. Bitam lacks more comprehensive office of finance CPM capabilities, such as disclosure management, PM&O and other close governance functionality. This may limit usefulness for large companies with more complex financial close and profitability planning challenges. Customers requiring these capabilities should evaluate complementary offerings. 8/26

9 Board International Since 1994, Board International has taken an integrated approach to CPM and BI. Its BI capabilities benefit its overall suite, especially planning, simulation and cost analysis functionality. Board's solutions target midmarket and large organizations seeking a more integrated BI and CPM approach. The vendor's HBMP IMC capability enables the support of use cases involving greater size and complexity. This enables a more integrated planning approach and improved support of global deployments. Board released v.8.0 and v.8.1 in 2013, which improve analytics ease of use, application maintenance and scalability, and provide international language support and sophisticated modeling. Board Mobile was also introduced in v.8.1, providing native ipad and Windows mobile support and a consistent user experience. Board International introduced new industry specific blueprints in In 2014, it plans to introduce a planning module that leverages its IMC improvements along with predictive planning capabilities to further improve its support of end to end planning. Although Board International offers its solution on various cloud platforms, such as Amazon, it currently has minimal experience supporting this type of offering. Board Mobile does not yet offer mobile write back capabilities; however, the vendor claims these will be released during The majority of the vendor's sales, consulting and support capabilities are located in EMEA. It has a growing market presence in North America and the Asia/Pacific region, as well as some coverage in South America. Prospective customers outside EMEA, especially those with many users and more complex use cases, should appraise the vendor's local consulting and support capabilities. Host Analytics Host Analytics is a pure play, multitenant cloud based CPM vendor and was the first in the market to offer a full multitenant SaaS CPM suite. Its offering includes support for financial consolidation, disclosure management, budgeting, planning, forecasting, reporting, dashboards, modeling, analysis and collaboration. The vendor has been evaluated in Gartner's CPM Magic Quadrant since As the traction for cloud based CPM solutions accelerated during 2013, Host Analytics' revenue growth was much higher than the market average and attracted healthy levels of investment, with $11.5 million of additional funding in The vendor has a long history of support for multitenant cloud based CPM solutions and, during 2013, it further increased its average customer and implementation size. It has also continued to develop its consulting methodology to accommodate this change. The Host Analytics AirliftXL Excel spreadsheet conversion tool was introduced along with additional UI and workflow management improvements. Support for more granular time periods was also announced for /26

10 IBM The vendor's primary focus on execution during the past year is reflected in the lower number of new features added in 2013, compared to the rate of product feature development in previous years. Cloud CPM competition has increased; other cloud CPM vendors are expanding their solutions, and on premises vendors have increased their cloud capabilities. The growing number of vendor options for the cloud may prove to be viable alternatives for some cloud CPM prospects. The vendor has direct and/or indirect sales, consulting and support capabilities in the Asia/Pacific region, EMEA, Japan and South America; however, the majority of its customers are in North America. Prospective customers outside this region should appraise the vendor's local consulting and support capabilities. IBM's customers tend to leverage the CPM suite to support a broad array of CPM processes and often focus on strategic CPM requirements. IBM's CPM platform includes solutions for planning, forecasting, budgeting, profitability modeling and strategy management. The vendor supports mobile, Web, desktop and Microsoft Excel based UIs and customizations. Cognos Insight facilitates desktop presentation, visualization and end user model creation, and Performance Modeler supports model creation and deployment. IBM also provides narrative and collaboration focused management, external reporting (XBRL) and financial close management. IBM has released Cognos TM1 and Cognos Disclosure Management (CDM) in the cloud; Cognos TM1 Mobile Contributor client for input, review, approval and comment; and IBM Concert, which enables new guided process management and collaboration capabilities across IBM's strategic, financial and operational performance management solutions. In addition, strategy management capabilities are available in Cognos TM (and Cognos Express). CDM received additional XBRL tagging and Electronic Data Gathering, Analysis and Retrieval system (Edgar) filing capabilities. IBM's acquisition of Star Analytics in 1Q13 resulted in new capabilities (IBM Cognos Integration Server) for access to Hyperion Enterprise Performance Management data sources. IBM's platform embeds predictive modeling and analysis, and leverages IMC to support large data volumes, sparse cubes and complex simulations. Cognos Controller does not support certain complex consolidation requirements, such as those involving complex ownership and intercompany relationships. Cognos TM1 requires a relatively high degree of initial configuration expertise, compared with some other CPM suite vendors' solutions. Customers with limited technical resources should evaluate related implementations and support efforts. Some confusion exists in IBM's customer base between CDM (IBM's go forward solution) and Cognos Financial Statement Reporting (FSR). IBM continues to maintain two additional planning 10/26

11 Infor user bases (IBM Cognos Planning and IBM Clarity 7). Customers using these products should evaluate their needs against product road maps to plan future application support efforts. Infor delivers a broad CPM suite and has a widespread global customer base. During 4Q13, Infor split its CPM release into two platforms. Infor will continue to provide enhancements to the 10.4 CPM product line. It also announced Infor Dynamic Enterprise Performance Management (d/epm) v This offering incorporates functionality from Infor's CPM suite, and leverages Infor's BI technology platform. Infor's new d/epm platform supports expanded CPM capabilities, such as real time forecasting and consolidations, and integrates with Ming.le, Infor's social computing platform. During 2013, Infor released new d/epm solutions contiguous to traditional CPM processes to enable more integrated operational and corporate planning related to sales and operations planning (for manufacturing), project cost ledger (for project based cost accounting) and workforce budgeting. The vendor announced new industry specific d/epm solutions for healthcare (Infor Healthcare TrueCost, part of the Infor Dynamic Enterprise Performance Management Suite), as well as new capital planning capabilities, both have planned release dates in Some d/epm suite components are available as cloud hosted services. Infor's road map includes multitenant versions for these solutions due late in Although Infor will support its traditional CPM platform, Gartner believes that d/epm will attract the majority of future investments. Infor customers should monitor the product road map and plan eventual transition efforts. Current and prospective d/epm customers will benefit from higher levels of product momentum; however, awareness for Infor's current CPM portfolio remains relatively low. Infor's d/epm suite lacks disclosure and close management capability. Customers requiring support for these and other last mile of finance processes, such as account reconciliations, should evaluate complementary solutions. KCI Computing KCI Computing supports complex planning, budgeting, forecasting, financial consolidation and close management requirements using an Excel based UI. KCI's platform (Control) supports profitability modeling, forecasting, interactive analysis, commentary management and analytics. Three complementary modules support deeper CPM processes: time series forecasting; materials costing, capacity planning and price sensitivity analysis; and project simulation, including resource and cost modeling, forecasting portfolio composition, and capacity and project profitability evaluation. 11/26

12 KCI provides a unified platform that supports a broad approach to performance management. It leverages a centralized metadata and data repository with a single point of administration that shares dimensions between models. Control's data integration supports real time access to a variety of source systems and provides workflow support for financial and operational processes, including related error detection. It also allows for drill through to underlying transactional detail. Control runs on a variety of relational databases, including Oracle, SQL Server and DB2, and can accommodate very granular financial and operational data and complex requirements. KCI Computing has offices in Torrance, California; Boston, Massachusetts; and Bangalore, India, but may be challenged to support large global rollouts across multiple regions. Prospective customers should ensure the availability of experienced resources when planning implementations or application upgrades. Although PM&O functionality is an integral part of Control, it does not support disclosure management or certain strategy management capabilities such as strategy maps. The vendor does not offer a cloud based option. KCI's suite lacks a browser interface, a capability the vendor abandoned given its customers' preference for an exclusively Excel based client experience. Organizations looking for cloud and/or browser based options should evaluate complementary offerings. Longview Solutions Longview Solutions offers both a traditional CPM suite and a tax solution. Its two products Longview Performance Management and Longview Tax share the same unified Longview 7 platform that supports office of finance and strategic CPM processes, which benefit traditional CPM and tax customers. Version simplified cloud deployments, increased dashboard interactivity and improved HTML5 rendering and Excel add in to the performance. The 7.2 release, due out in 2Q14, is a major release that reportedly will enable users to manage transactional data, such as for loan and salary planning detail, add unique transfer pricing support, and provide functionality to streamline related finance and tax processes. Longview's combination of CPM and tax offerings has created additional partnership opportunities with tax consulting vendors. The vendor is expanding its number of cloud deployments (leveraging SunGard Enterprise Cloud Services). A 30 day renewal option enables customers to conduct proofs of concept (POCs). Longview reported a decrease in revenue year over year for 1H13. Like other traditional onpremises CPM suite vendors growing their number of cloud customers, Longview must manage the short term revenue challenges associated with its increasing percentage of subscriptions versus 12/26

13 Oracle perpetual licenses to ensure continued ongoing investment in its traditional CPM and newer tax offerings. Longview's ability to provide tax data provisioning and tax planning support has created some confusion for customers regarding Longview's go forward investment in traditional CPM capabilities; however, the vendor's CPM platform has benefited from these changes. While Longview has several existing and new global customers and offices in the U.K. and the Netherlands, the majority of its customers are in North America. Oracle's EPM platform supports office of finance CPM with the Hyperion Financial Management (HFM), Hyperion Financial Close Management and Hyperion Disclosure Management solutions. It supports strategic CPM with Hyperion Planning, Hyperion Profitability and Cost Management, Hyperion Strategic Finance, and Oracle Scorecard and Strategy Management, part of Oracle Business Intelligence Foundation Suite (Oracle Business Intelligence Enterprise Edition [OBIEE]). Additional solutions for metadata management are extraction, transformation and loading (ETL); account reconciliation; and tax data provisioning. The Oracle CPM portfolio supports a broad array of processes and use cases, and is typically used by large, complex organizations. During 2013, Oracle's suite received a number of significant additions, including embedded OBIEE and mobile delivery capabilities in Hyperion Planning, improved visual rule capability in HFM, support for Hyperion Profitability and Cost Management on Oracle Exalytics In Memory Machine, a new module for tax provisioning and new account reconciliation functions. Oracle's Planning and Budgeting Cloud Service (currently due in 1Q14) will provide a viable hybrid cloud and on premises planning option intended for use with Hyperion Planning or stand alone. Oracle announced a collaborative reporting cloud service to be available in late Oracle's onpremises solution can be hosted on Oracle Managed Cloud Services. prevero The Oracle Planning and Budgeting Cloud Service was announced in 3Q12, but is not due out until 1Q14. Customers interested in this solution should monitor Oracle's EPM road map and seek customer references with similar use cases. Oracle is primarily deployed by large organizations for enterprisewide solutions. Midsize companies tend to consider that the vendor's multiproduct approach and support services are too expensive for their requirements. Oracle tends to receive low Magic Quadrant survey scores in customer focused vendor experience areas, such as contract negotiation, consulting services and help desk support. Prevero is the result of a 2011 merger between CPM vendor Winterheller and BI vendor prevero. Prevero now offers a CPM suite with embedded BI capabilities, as well as solutions for planning, 13/26

14 consolidation and treasury. It leverages Java Application Server, JavaScript and an HTML5 front end. The prevero product, installation and vendor satisfaction scores were among the highest in this year's survey. We moved it from the Niche Players quadrant into the Visionaries quadrant largely due to successfully incorporating BI capabilities into its CPM portfolio. This includes new functionality, such as interactive dashboards, more advanced modeling and simulation capabilities, and probability based predictive planning supported by its MemoLytics in memory engine. Prevero's customers use the modeling engine to fulfill a variety of needs, such as sales planning and materials pricing. The vendor has also developed industry specific offerings for utilities and airports. The vendor's offerings are available as infrastructure as a service (IaaS; software and application management performed by the customer), platform as a service (PaaS; application modeling and environment configuration is performed by the customer) and SaaS. Device independent HTML5 reporting exists for tablets and smartphones. Prevero is relatively unknown outside Germany, Austria and Switzerland (the DACH region) and has no direct support in other areas. Customers evaluating prevero in other regions will need to evaluate local support, consulting and sales capabilities. The customer base is composed primarily of midmarket organizations, although there are some larger customers. Prevero is widely adopted for its planning and modeling features, rather than for its office of finance support. Larger companies evaluating prevero for financial close support should seek customer references with similar use cases. Prophix Software Prophix Software's suite is built on the Microsoft SQL Server 2012 platform and leverages Microsoft Excel and SharePoint. The vendor's unified solution supports office of finance CPM and strategic CPM processes, including deeper workforce, project, inventory and sales planning. Prophix Software's new partnering model for consulting and resellers has helped enhance its Ability to Execute and grow internationally. The vendor has maintained revenue growth above market averages, with highest increases in EMEA, Russia and Australia. Prophix 11, released in 3Q13, includes Prophix Mobile for delivery of executive reports and dashboards via the Apple ipad. In 2014, Prophix Software plans to release new social computing capability to provide additional collaboration, process continuity and auditability, as well as a cloud based offering. Prophix's Detailed Planning Manager provides additional balance sheet planning and transactional modeling capabilities. 14/26

15 SAP Prophix financial close and governance support capabilities are not as comprehensive as other CPM vendors. For example, Prophix lacks disclosure management. Organizations with complex office of finance CPM processes should evaluate these capabilities and seek similar use cases among the vendor's reference base. Although Prophix is releasing Prophix Cloud, the customer demand for cloud has increased, and Prophix may be challenged to increase its product and service capabilities rapidly enough to meet this demand, especially given the competition from other cloud vendors. SAP's EPM solutions support an extensive breadth and depth of CPM functionality, and are typically used by large, complex global organizations. They are favored by those standardizing on an SAP ERP and/or SAP BI platform. SAP's flagship BP&F and financial close offering, SAP Business Planning and Consolidation (BPC) version for SAP NetWeaver, combines popular CPM functionality used by the office of finance into a single product. SAP's other key CPM components include SAP Strategy Management, SAP Profitability and Cost Management and SAP Disclosure Management. SAP continues to leverage its ERP customer base for market growth, and has leveraged its Hana platform to improve CPM performance in areas such as consolidations and allocations. SAP EPM Unwired Mobile platform enables new products, such as Enterprise Insight, and has facilitated additional third party development. V.3.0 was released in 4Q13, with a SAP Fiori based UI design, enhanced data input and additional customization capabilities. SAP released BPC NetWeaver v.10.1 in 4Q13. It embeds BW integrated planning capabilities (e.g., planning using BW data warehouse objects) and provides a new HTML5 UI. SAP introduced new consolidation monitoring (Financial Results Insight mobile content), as well as enhanced proportional entity and periodic consolidation support. SAP Disclosure Management integration with BPC and BW is improved, and SAP Financial Consolidation supports Hana. SAS SAP is primarily deployed by large organizations for enterprisewide solutions, although its Edge solutions target individual departments and smaller organizations. SAP's investment in BPC has favored the NetWeaver version, although SAP has committed to support BPC for Microsoft. No migration plans have been announced for SAP Strategic Enterprise Management (SEM), which SAP said it will support through SAP's EPM suite is available cloud hosted (either on Hana Enterprise Cloud, on Amazon Web Services [AWS] or through partner managed services). No multitenant public SaaS options are available. SAS's performance management suite is composed of four integrated offerings: SAS Financial Management, SAS Strategy Management, SAS Capital Planning and Management (introduced in 4Q13), and SAS Cost and Profitability Management (with expanded IMC capabilities, this new product replaces 15/26

16 what was formerly known as SAS Activity Based Management and SAS Profitability Management). These offerings draw on the vendor's business analytics competencies and are most often used by organizations with complex analytics performance management needs. SAS embeds analytic capabilities, such as correlation analysis and predictive forecasting, as well as intuitive visualizations and wizards to make these advanced capabilities more accessible to the office of finance. SAS's new Capital Planning and Management offering integrates financial and risk planning processes between the office of finance and operations, and provides additional support for certain industries. Its 9.4 release introduced new business process management capabilities in the Financial Management offering to facilitate the management of multiple workflows. SAS has embedded Web application server capabilities in its 9.4 offering to reduce total cost of ownership (TCO) and continues to expand its number of industry specific strategy management frameworks. Solver SAS customers are typically large organizations that leverage the CPM suite for sophisticated planning, forecasting and analysis, and for performance and risk management, rather than for financial close support. SAS does not offer a disclosure management solution. Other vendors have enhanced analytics capabilities in their CPM suites, which may make SAS's offerings less differentiated in the future. SAS Activity Based Management is available on the cloud via AWS; however, SAS doesn't offer cloud based options for the other components of its suite. Enterprises seeking cloud capabilities should evaluate SAS's product road map and explore alternatives. Solver, founded in 1996, is a privately funded independent firm. Along with a financial consolidation and budgeting consulting practice, Solver brought two CPM solutions to the U.S. market. Great Plains Software and SAP later acquired those products. Solver introduced BI360 in late 2009, with a focus on the midmarket. It partners with a number of accounting software vendors, notably Microsoft (Microsoft Dynamics), and has offices in Los Angeles, Calgary, Stockholm and Sydney. It maintains partnerships with distributors and regional consulting organizations in EMEA, Asia/Pacific and Latin America. Solver's unique sales channel approach has contributed to the company's growth. It has more than 145 partners, primarily accounting software partners, such as Microsoft and Sage (Sage 500 and Sage ERP X3). It also has partnerships with cloud ERP vendors Intacct, Acumatica and NetSuite, enabling BI360 to be considered a component of the initial ERP sale with partners. BI360 is built on a Microsoft platform and utilizes a Microsoft SQL database. The relational star schema allows BI360 to store transactional data for CPM and transactional reporting, providing detailed drill downs and links to operational data. 16/26

17 In January 2014, Solver introduced ios mobile reporting capabilities for the iphone and ipad. It plans HTML5 based collaboration in 1Q14, and Microsoft SQL Server 2014 IMC support late in Tagetik Solver BI360's relational database management system (RDBMS) design may have scalability issues with large data volumes; as a result, optimal performance is closely related to application design. Prospective customers should ensure their implementation partners have adequate training and experience. Although the vendor intends to develop BI360 into a fully multitenant offering, it currently lacks viable cloud capabilities, but can be hosted by third party partners. BI360 lacks office of finance CPM capabilities, such as disclosure management and strong close governance. Close support can require a more customized application design than many other CPM vendors' solutions. Prospective customers should evaluate Solver's capabilities in this area. Tagetik supports office of finance CPM and strategic CPM initiatives. It is particularly strong in office offinance CPM, offering statutory reporting functionality, as well as close management and disclosure management capabilities. Tagetik also offers cash flow planning and industry specific CPM solutions for insurance and banking. Tagetik has maintained revenue growth above market averages and has continued to increase its average implementation size. During 2013, the vendor announced an OEM partnership with SAP for SAP Hana. This should give Tagetik access to additional large customers. Tagetik is expanding its number of cloud deployments. It now has two offerings: Tagetik Enhanced Cloud and Tagetik SaaS. Both are hosted on AWS or Microsoft Azure and offer update services; however, Tagetik SaaS provides multitenancy and more flexible pricing, including a monthly option. The vendor introduced Tagetik Analytics in It includes browser and mobile based reportgeneration capabilities for ios and Android. Tagetik introduced a new operating expense planning product, and expanded its solutions for insurance and banking. The majority of Tagetik's revenue comes from Western Europe. Its SaaS option should provide additional opportunities for Tagetik to grow market share outside that region. The vendor will need to grow its base of cloud customers and continue to develop its ability to support cloud based applications to gain CPM cloud market share against pure play SaaS vendors. Tagetik is better known for its office of finance CPM than for its strategic CPM capabilities. Prospective customers requiring advanced modeling and analytic capabilities should evaluate Tagetik's capabilities in this area. 17/26

18 Vendors Added and Dropped We review and adjust our inclusion criteria for Magic Quadrants and MarketScopes as markets change. As a result of these adjustments, the mix of vendors in any Magic Quadrant or MarketScope may change over time. A vendor's appearance in a Magic Quadrant or MarketScope one year and not the next does not necessarily indicate that we have changed our opinion of that vendor. It may be a reflection of a change in the market and, therefore, changed evaluation criteria, or of a change of focus by that vendor. Added Adaptive Insight Axiom EPM Solver Dropped No vendors were dropped. Inclusion and Exclusion Criteria Market presence: Vendor has at least 20 live customers using two or more of its CPM suite applications. License and maintenance revenue was at least $5 million from CPM applications in the most recent fiscal year. Vendor has live customers in more than one of the following regions: North America, South America, EMEA, Asia/Pacific and Japan. Vendor's target customers are midsize or large companies, or large publicsector/nongovernmental organizations with multiple, diverse departments. Product capabilities: Vendor's CPM suite offering, at a minimum, supports financial consolidation and close, and financial BP&F. Although not required, disclosure and close governance are recommended. We evaluated elements of strategic CPM if a vendor supported them. Vendors with strategic CPM, but no financial CPM capabilities, were excluded. Vendor viability: Vendor must be viable, and must not be in the process of filing for bankruptcy. Evaluation Criteria 18/26

19 Ability to Execute Product or Service: This involves CPM suite functionality across the five application components. It includes the ability to support a range of organization sizes, such as large enterprisewide implementations and complex use cases. It also encompasses the underlying technical architecture. Overall Viability: This includes an assessment of the organization's overall financial health, the financial and practical success and size of the business, and the likelihood that the business will continue to invest in the CPM suite. Sales Execution/Pricing: This comprises the vendor's capabilities in all sales activities and the structures that support them. This criterion includes an assessment of the cost of CPM suite licenses, implementations and ownership. Market Responsiveness/Record: This involves the vendor's overall effectiveness in the market, including market share, the number of live implementations of its CPM suite, the number of enterprisewide implementations, responsiveness to users and capability to articulate a clear CPM value proposition. Marketing Execution: This was not rated as a separate criterion, because it was evaluated as part of two other criteria: market responsiveness/record and operations. Customer Experience: This includes the vendor's capability to deliver presales and postsales support, which enables clients to be successful with their CPM suites. This criterion also includes the quality and availability of the vendor's support desk and implementation services. Operations: This involves the organization's capability to meet goals and commitments with respect to CPM suites. Factors include the quality of the organizational structure, such as skills, experience, programs, systems and other vehicles that enable vendors to operate effectively and efficiently in the market on an ongoing basis. Table 1. Ability to Execute Evaluation Criteria Evaluation Criteria Weighting Product or Service Overall Viability Sales Execution/Pricing Market Responsiveness/Record Marketing Execution Customer Experience High High Medium High Not Rated High 19/26

20 Operations Medium Source: Gartner (March 2014) Completeness of Vision Market Understanding: This is the vendor's ability to understand buyers' needs and to translate those needs into products and services. It addresses whether vendors show the highest degree of vision, listen to and understand buyers' wants and needs, and can shape or enhance those wants and needs with their added vision. Marketing Strategy: This involves a clear, differentiated set of messages matching Gartner's vision of CPM that is communicated consistently and effectively throughout the organization and to the market. Sales Strategy: This is the strategy for selling CPM suites that uses the appropriate network of direct and indirect sales, marketing, service and communications affiliates to extend the scope and depth of market reach, skills, expertise, technologies and services to the customer base. Offering (Product) Strategy: This is the CPM suite product strategy covering breadth and depth of functionality, underlying technology and openness. Business Model: This refers to the soundness of each vendor's strategy to deliver CPM suites to the market. Vertical/Industry Strategy: This is the vendor's strategy to direct resources, skills and offerings to meet the specific needs of vertical market segments. Innovation: This refers to the vendor's unique approaches and innovations, such as use of technology, development of product enhancements, availability of licensing and execution of partnering. Geographic Strategy: This is the vendor's strategy to direct resources, skills and offerings to meet the specific needs of geographies outside the vendor's home geography directly or through partners, channels or subsidiaries, as appropriate for the region and market. Table 2. Completeness of Vision Evaluation Criteria Evaluation Criteria Weighting Market Understanding Marketing Strategy Sales Strategy Offering (Product) Strategy Low Medium High High 20/26