The goal is worthy: Devise a coordinated, faster system of top-down planning and budgeting that links the performance of business units to a company's strategic vision. But reengineering planning and budgeting is turning out to be a lot more difficult, time-consuming, and expensive than many companies ever imagined, requiring sweeping changes throughout an organization. "Training for the software can be short, but convincing people to change their processes can be another matter," Allcock observes.
On cue, a wave of new and improved software, from the likes of Hyperion, Comshare, Adaytum, Systems Union, and SAS Institute — as well as the major enterprise resource planning (ERP) vendors with their add-on modules — is turning corporate budgeting and planning on its head. This Web-based software can support thousands of users across many geographic locations and has become a collaborative tool for sophisticated analysis and planning — and importantly, one that non-beancounters can understand. Indeed, budgeting and planning packages no longer work in isolation and are often linked with an ERP system. Many of these applications use OLAP (online analytical processing) technologies to access complex databases designed to help companies monitor, report, analyze, and react to developments in their business in a timely manner.
Indeed, the benefit of Web-based products is that, with one application being shared throughout a company, both installation and maintenance are relatively fast and easy. Allcock says the "typical" Comshare MPC system costs about $40,000 for software licenses, with consulting and implementation costs as much again (the company employs third-party systems integrators such as COL in Hong Kong). That seems to appeal to users: Allcock says MPC has enjoyed the fastest uptake of any product in Comshare's history.
Contract Automation
The Binding Bits
Over the past decade, software designers have spent a good deal of time developing Web-based applications that automate just about every aspect of the buyer-seller relationship. But the creation of the agreements that bind those relationships — contracts — has largely been ignored.
The result? Producing and storing legal documents remains as big a pain in the neck as it was 30 years ago. The paper trail of tears may soon be coming to an end, however. Over the past year or so, startups such as DiCarta, I-Many, MyContracts, Webango, and TradeAccess have launched browser-based applications that automate the creation and management of legal documents. In addition, financial software heavyweights such as Oracle, SAP, and i2 Technologies have also come out with contract automation systems.
While a number of these applications automate specific parts of legal document creation, others manage the entire contract lifecycle — from proposal and negotiation, through analysis, approval and execution, to management and renewal. Some contract management programs go even further, tracking terms and conditions, as well as the relative profitability of different agreements. A few applications even prompt users through contract-negotiation steps and automatically issue checks to customers and suppliers when contracts go into effect. Some contract automation programs monitor revenue-scheduling practices and enforce compliance with generally accepted accounting principles.
This digitizing of corporate contracts makes a lot of sense in a digital economy. Increasing corporate reliance on outsourcers, application service providers, and electronic marketplaces has put a premium on the handling of contracts. In addition, commercial documents have become more complex, as companies attempt to cram rebates, chargebacks, and refunds into service agreements.
Yet surveys show that 99 percent of companies still don't have electronic or automated contract management systems in place. While many companies use spreadsheets to track agreements, few have the technology to extract and compare the content of thousands of contracts. Although a large percentage of companies deploy ERP software to automate back-office operations, most of those systems enable users to refer to a contract only as part of a sales or purchase order. As David Boulanger, an analyst at AMR Research, points out, ERP systems typically do not store contracts down to a line-item level. "The reason why some of these contract automation systems are so interesting is that they give each line item in a contract a life cycle," says Boulanger. "'It gets negotiated, formalized, monitored, reviewed, and renewed," he says.
Customer Relationship Management
Why Not ERP?
Consolidation has studded the customer relationship management (CRM) sector of late. On the one hand, "best of breed" vendors, once specialists in fields such as call center or sales force management software, have broadened their offerings. On the other, big ERP vendors like PeopleSoft and Oracle have plugged gaps in their CRM lineups by acquiring smaller product sets. Both camps have thrown in doses of in-house development for good measure.
The fortunes of SAP reflect the changes most. Just a year ago, market share studies placed the German software giant in eighth position. Now it's at number two, behind U.S.-based Siebel. In short, SAP is living the "ERP II" dream.
With Y2K relegated to history, many pronounced the death of ERP because of its focus on back-end systems at a time when outward-facing, front-end applications like CRM and supply chain management tools were becoming trendy.
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