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Portals are fast becoming the standard desktop interface for corporate employees. Will finance staffers get theirs?
Tim Reason, eCFO
September 15, 2001
Alice opened the door and found that it led into a small passage, not much larger than a rat-hole: she knelt down and looked along the passage into the loveliest garden you ever saw. How she longed to get out of that dark hall, and wander about among those beds of bright flowers and those cool fountains, but she could not even get her head though the doorway; "and even if my head would go through," thought poor Alice, "it would be of very little use without my shoulders."
Most critics have concluded that this scene from Alice's Adventures in Wonderland had a lot to do with author Lewis Carroll's fondness for opium.
But Carroll was a numbers man — he was a lecturer in mathematics at Oxford — and he was familiar with the frustration of an elusive solution.
Chief financial officers can relate. For years they have been seeking unfettered access to the full array of treasury, accounting, and supply-chain applications deployed by their companies. No small wish. While the makers of enterprise business applications have generally promised flawless integration between their products and clients' legacy programs, more often than not there've been flaws. In some cases corporate users have had to bring in third-party software vendors to help bridge the gaps between business applications, information, and hardware. Even when employees have managed to gain access to siloed systems, figuring out how to sift through the mounds of data inside has proved to be a daunting task.
If you think we're leading up to something, you're right. Like the swell garden in Wonderland, the promised land of single-entry computing is finally in sight. Enterprise portals — personalized Web pages that provide point-and-click access to almost all data and software, no matter where the stuff resides — have finally started to catch on with mainstream business users. Indeed, a number of industry experts believe that these commercial equivalents of consumer portals like MyYahoo will soon become the standard desktop interface for most corporate computer users.
Things certainly seem headed in that direction. In the past 12 months scores of US companies, including Boeing, GMAC-RFC, and Ricoh, have deployed enterprise portals of one sort or another. Admittedly, most of the deploying has been done by or for human resources departments. But now it appears that finance departments may soon be getting portals of their very own.
That's a marked turnaround from last year, when — vendor hype notwithstanding — few companies were considering deploying corporate portals for the finance department (see "Portal Envy," CFO, July 2000). One possible reason: There weren't any corporate portals for the finance department. Early offerings in the market, including TreasuryConnect.com and CFOWeb.com, were external sites hosted by outside companies and had little integration with back- end systems. That made them more like niche Web sites than true portals, and most lacked the star power needed to attract large numbers of corporate clients. Many of these sites have since gone to that great URL in the sky.
In recent months, however, software heavyweights Baan, SAP, PeopleSoft, and Oracle have pushed further into the portal business. The pushing is understandable. Depending on whom you talk to — and what their agenda is — the portal sector is expected to generate between $20 billion and $45 billion in sales by 2004.
Projections aside, the arrival of the Big Four has big implications for how finance employees will likely do their jobs in the near future. PeopleSoft and Oracle have already announced plans to roll out full- scale portals specifically geared for the finance function. Those portals will serve as launching pads for the vendors' treasury, accounting, and supply-chain modules. In addition, SAP acquired portal specialist TopTier Software in June and turned it into a subsidiary called SAP Portals. That same month the German-based ERP and E-commerce specialist signed a deal with IBM, which licensed components from SAP Portals for use with Big Blue's WebSphere Portal Server.
Smaller, pure portal players such as Plumtree Software also have finance portals in the works. Moreover, makers of nonfinancial business applications (CRM, IR, HR, and other letters) are busy configuring their software to work on the soon-to-be released portal platforms of ERP and E-commerce vendors. The upshot of all this code-writing: Finance workers should be able to access scores of applications — financial and otherwise — from a single screen on their desktops. (See "On a Desktop Near You," at the end of this article, for the names and Web addresses of companies making their presence felt in the portal business.)
Good news for the numeric-keypad set. But surprisingly, finance workers may have more to give than to gain from portal technology. "Portals tend to be about access to information," explains IBM Global Services consultant Scott Smith. "And finance folks tend to have greater levels of access to corporate information than many of their colleagues." The real benefit of finance portals, predicts Smith, will be from the wide dissemination of financial metrics to employees. "People see those metrics on their portals and want to improve them," he says. "That's where I see a lot of work for the CFO — figuring out how they want financials used and how they want them to impact what people do."
Such shaping of behavior isn't limited to employees, either. Take the case of Herman Miller, the Zeeland, Michigan-based maker of office furniture. The company began its virtual initiative way back in November 1998. Rather than hooking up workers, however, Miller management "wanted to communicate more effectively with our suppliers," says E-commerce team leader Mike Brunsting. "And we knew we wanted to do that through the Internet."
In May 2000 Herman Miller converted its supplier extranet into a true portal from TopTier (now SAP Portals), and management rechristened the company's Supplier Information Global Network as MySign. With MySign, both suppliers and Herman Miller workers are able to access the finance and manufacturing systems maintained in the company's Baan ERP system. Users of the portal can also view demand schedules, supplier performance metrics, and pricing lists. The company's initial portal was largely outward-facing, explains Brunsting: "We were exposing financial information from our business system to those key financial people at the supplier."
Currently about 150 suppliers, representing 90 percent of Herman Miller's procurement spend, conduct transactions on the portal. Most use the Web page to access demand requirements, to confirm deliveries, and to verify payments. That last item would seem to be of interest to Herman Miller's treasury department. At first the company's supply managers were the only employees using the portal, recalls Brunsting. But when suppliers began referring to MySign during calls to the accounts payable department, finance executives got real interested. Vern Van Halm examined the portal when he joined the company as manager of accounts payable in October 2000. He liked what he saw. "MySign brings together quite a few elements out of Baan into one view," says Van Halm. "Before, I would have to go through multiple screens in Baan to get the same information."
It didn't take long before Van Halm was insisting that his department be given the same view. That way, he says, he could train suppliers to use the AP information correctly. "I want the supplier to drive the accounting for us," he explains. "It's much easier to correct an unpaid invoice if a supplier flags it immediately." Once a receivable goes past 30 days, notes Van Halm, the details start getting foggy. With MySign, however, suppliers have the capability to stay on top of their Miller receivables. "The details are out there, and it is a benefit to the suppliers to use it," he says. "The fact is, they are more inclined to receive the money than I am to pay them."
No doubt. Meanwhile, Brunsting and Van Halm are looking to add more muscle to the portal: They're beta-testing a voucher-on-receipt system that ties payables to the actual delivery of products, automatically generating payment when Herman Miller receives a shipment. Two of the furniture maker's suppliers have been using the system for 15 months, with encouraging results. And while MySign already provides suppliers with metrics, Van Halm thinks that the portal should also generate financial metrics for departments within the company. "I'm already looking to pull inventory turns and AP turns out of MySign instead of out of Baan," notes Van Halm. "With Baan, the reporting is a little bit more of a hassle."
Portal Belly Mushrooms
That's the beauty of portal technology: It makes for easy entry, regardless of the software or the operating system. Applications that were never intended to speak to one another suddenly communicate.
Software makers accomplish this neat trick by embedding things called application program interfaces (APIs) into the virtual bellies of portals. APIs, which are variously dubbed pagelets, portlets, or gadgets by their various vendors, eliminate the need for complicated back-end integration between programs. Instead, data gets integrated at the portal level. Over the past year, an increasing number of business- application vendors have come out with portal APIs for their products. Obviously, the greater the API catalog, the more apps that companies can stuff into their portals. Says AMR Research analyst Lance Travis: "The builder of the portal takes care of what happens underneath in the plumbing when you drag information from one application to another."
Such ease of access, however, puts a premium on what information gets disseminated — and to whom. For instance, the data generated by the finance function (DSOs, economic profit, activity-based costing, and the like) could dramatically alter how workers view — and do — their jobs. Hence, portals offer CFOs an unusually powerful tool for influencing employee thinking. "The finance department provides extremely valuable information to the rest of the organization," says Heidi Collins, author of Corporate Portals. "Having this information available more frequently than monthly might be of great value to other members of the organization."
Tell Steve Myers about it. Myers is manager of revenue and cash accounting at Entergy, a New Orleans-based power company. Like many utilities today, Entergy is struggling with the conflicting demands of deregulation. The utility's management is attempting to create new, revenue-generating — read unregulated — business units. At the same time, executives must somehow wall off those operations from the company's remaining regulated businesses.
Entergy's nuclear group, for example, has been growing dramatically of late. The company has been busily purchasing reactors from utilities that are getting out of the nuclear power business. This rapid expansion, while good for shareholders, has created headaches for Myers. "I am struggling to provide information to the nuclear business because they are trying to tightly manage their cash," he says. "The general ledger, accounts receivable, and accounts payable systems all have information they need. But the treasury system only handles a certain level of detail." As it stands now, Myers says that finance staffers in the nuclear power group must log in to each of those financial systems individually.
The problem so concerns Myers that he is now in talks with representatives from PeopleSoft. Myers says that he's trying to find out more about the software maker's plans to introduce portal technology in its next application release. "We use the Web internally for a lot of things, and our culture is to really use technology," he notes. "I will certainly embrace portals."
Steve Myers, you're not alone; scores of finance managers are ready to embrace portals. Vendors know this, too. Over the next few months several software makers will unveil portals targeted at finance professionals. Plumtree, for example, is in the midst of devising a finance-specific package. "Every customer has a finance department, so why not provide a packaged experience for them?" asks Glenn Kelman, co-founder of the portal developer. "It's more likely that you'll see packaged solutions that address the departments every company has than packaged solutions for vertical industries."
PeopleSoft intends to roll out its CFO Portal in the fourth quarter. Rita Iorfida, vice president for financials product management at PeopleSoft, says the portal is based on the software maker's existing Employee Portal products. According to Iorfida, the finance portal is designed "to be on a CFO's desktop all day long." In other words, CFO Portal is intended to help CFOs reach beyond their immediate grasp, out to relevant systems in other departments and other companies.
Although portals should provide single-click access to, say, the general ledger, the idea is not simply to provide a desktop full of icons or a list of browser bookmarks. To be successful, argues Iorfida, a finance portal must aggregate information from all these sources — and use it to warn finance workers of impending problems. "I imagine that a CFO portal will be a dashboard or control panel to help manage the business," says PeopleSoft CFO Kevin Parker, who has been serving as guinea pig on the development of the CFO Portal product. "I think we will also be able to look beyond the enterprise to see what suppliers and customers are doing."
To help CFOs remain on top of business developments, PeopleSoft is planning to add two key pieces of technology to its portal. Self-subscribing alerts, which may take the form of emails or screen-color changes, warn users when key performance indicators fall below acceptable levels. And an active information filter — for "the tremendous wealth of information and data that comes across a CFO's desk every day," as Parker describes it — screens the influx of data that actually makes it onto a user's portal page.
Oracle, meanwhile, is planning to release a number of portlets geared to the finance function, as well as a full CFO portal package based on those portlets. "We are developing specific portals for treasury, controller, and CFO," notes Seamus Moran, director of financial portals development. The developing has run into a few unexpected snags, however. Moran claims that testing of one portlet (a real-time revenue reporter) came to a halt in May because company CFO
Jeff Henley was using it during the year-end close — and developers weren't allowed to view the numbers. Although the revenue portlet will be available "very shortly," Moran says he's not privy to the release schedule for a full-blown CFO portal.
Executives at SAP Portals, on the other hand, have not announced a specific portal solution for finance executives. But it seems unlikely that the ERP giant will ignore such a crucial part of its constituency — particularly after throwing its hat into the portal ring with the TopTier acquisition (see "Suite Emotion," below). Of course, notes Yankee Group analyst Rob Perry, "SAP's natural tendency will be to support their own applications." However, he adds, the links that TopTier had to PeopleSoft and Baan suggest that SAP Portals may well remain relatively agnostic. Herman Miller's Brunsting, a Baan user, sees it the same way. "TopTier originally had a very tight relationship with Baan," he notes. "We've had an extremely close relationship with TopTier. In fact, a lot of what you see in their portal product is stuff we got them to develop as one of their first extranet customers."
Do It Yourself
Of course, it's not as if CFOs absolutely have to rely on vendors to deliver up finance portals. If a company has a portal platform in place — not to mention a good IT staff — it can create its own customized finance portal with a minimum of outside help.
Managers at aerospace and industrial manufacturer Hamilton Sundstrand, a unit of United Technologies, appear to be headed down that very path. "Our finance group has access today to general company information and tools through the employee portal," explains Clem Wiekrykas, E-business program manager at the company's headquarters in Windsor Locks, Connecticut. "What they don't have is a specific portal community with tools geared towards finance people. We've started building that."
The building began with discussions about the portal's finance taxonomy — the directory structure of behind-the-scenes finance information. "Now we have to ask what specific information finance wants from the Internet, the intranet, back-end systems, and the directory structures," he says. Wiekrykas intends to develop "specific gadgets for finance" — that is, APIs capable of pulling and presenting relevant information from the company's various systems.
Two finance-related communities are already under construction. One, an executive dashboard, is designed to push critical company-performance metrics — many generated by financial systems — to executive desktops, where they will be more readily available. The second offering, called the Finance Community, will provide access to important financial systems and applications for employees with financial responsibilities. Workers from outside the finance department who nonetheless perform some financial tasks will also be granted entry into the community.
The cost of all this? Executives at Hamilton Sundstrand aren't saying. But portals don't necessarily come cheap. Hewlett-Packard, for example, ended up spending $20 million constructing its employee portal last year. The gateway, called @HP, allows nearly 90,000 employees in 150 countries to update human resources records, change benefit electives, and book business trips, among other things. Despite the upfront outlay, a spokesman for the company claims that @HP has delivered a return on investment of $50 million since the portal went live in October 2000.
It's hard to tell what kind of payback financial portals will generate — if any. But as Wiekrykas points out, there is a direct connection between improved financial oversight and share-price stability. "The companies that have been successful in maintaining their earnings estimates," he notes, "are the companies that are managing their numbers well." Seeing those numbers on a daily rather than on a monthly basis can't be a bad thing. "If you don't know for a month that a mistake is happening, that's real money annualized," offers Wiekrykas. "That's true for sales data, working capital — you name it. Any delay is costing you money."
Tim Reason is a contributing editor at eCFO.
Innies and Outies
While portals are ideally suited for managing corporate supply chains, experts say it's probably a lot smarter to start with an in-house deployment. "Most company IT services are inward facing, not external facing," notes Glenn Kelman, co-founder of portal provider Plumtree. "Thus, portals are typically rolled out first to employees, then to partners and customers." Employee rollouts usually start with an HR portal because it's relevant to the largest number of employees. After that, says Kelman, managers often zero in on specific company functions. The usual suspects: sales and marketing. As AMR Research analyst Lance Travis says, customer care and sales professionals "are the people that need bits and pieces of information from the finance, sales, and inventory-management systems."
Generally speaking, companies tend to construct different portals for different user groups. But at aerospace and industrial manufacturer Hamilton Sundstrand, company management is going one step beyond: Managers there are attempting to design an über portal. The key to such an endeavor, experts say, is entitlement — that is, who gets access to what, and how much of it. "Our ultimate intention is to have one portal for employees, customers, and suppliers, with appropriate levels of access for each," explains E-business program manager Clem Wiekrykas.
Wiekrykas started work on the company's employee portal in November 2000, immediately after parent company United Technologies selected Plumtree as the platform to be used throughout the corporation. The Hamilton Sundstrand employee portal was first rolled out in February, and it has continually evolved ever since. The desktop gateway provides every employee with access to human resources and benefits functions. But management also created a "community" on the portal just for employees within HR, which provides them with access to confidential records and other information needed to perform their jobs.
The company has since launched a number of other function-specific communities, including ones for IT, engineering, E-business, and customer service, as well as its Engine & Control Systems and Space Systems International business units — about 15 communities in all. But before customers and suppliers are given access, says Wiekrykas, Hamilton Sundstrand employees must be comfortable using the portals. "Essentially, we want our employees to debug the system," he explains. "That's why we were quick to roll out our customer service community: I want our employees to be able to answer questions that might arise when we roll out to customers and suppliers." —TR
One of the more immediate effects of portal technology has been its profound impact on the philosophy of software deployment. An exaggeration? Hardly.
Consider SAP's most recent Sapphire conference, held in Orlando in June. In the past the speakers at these extravagant ERP events have openly decried the concept of best-of-breed business software. Instead, the lecturers have steadfastly insisted that finance applications — and anything remotely related — ought to be part of a single, overarching suite of products.
But portals have slammed the door shut on that idea.
"We, SAP, never achieved our dream that we could cover all application areas and supply a complete suite of business functionality to our customers so they can run only on SAP," conceded CEO Hassno Plattner in his opening address. The software giant, he announced, was embracing a portal strategy that would allow customers to tie together applications from archrivals such as PeopleSoft, Oracle, and Baan, as well as CRM and supply-chain providers such as Siebel and i2. In fact, SAP acquired portal maker TopTier and turned it into a subsidiary called SAP Portals.
"We have learned that never, ever will the world be standardized on one set of systems, on one set of applications, not even on one set of protocols," noted Plattner. "We have to face the situation that there is a heterogeneous landscape inside [each] company as well."
A fairly remarkable admission, considering that SAP spent years trying to dominate that landscape. But Oracle and PeopleSoft have embraced portals as well. "The days of big-bang implementations of an entire suite of applications are over. Nobody does that anymore," grants PeopleSoft CFO Kevin Parker. "It is entirely reasonable to expect that a company will have an i2 supply chain with PeopleSoft financials and a CRM from Siebel."
Seamus Moran, Oracle's director of financial portals development, notes that portals don't actually solve the incompatibility problems of proprietary software; they simply avoid them. "Portals just look at things — they are a gateway to the information," he explains. "When you click on something in a portal, you are opening an avenue to that specific application."
Of course, some observers say the ERP vendors' earlier push for "one company, one system" was doomed from the start. "The fact is, customers were never going to be brought into a single ERP system," argues AMR Research analyst Lance Travis. "And when the Internet came around, the problem got even bigger because when you wanted to hook into your partners, you couldn't dictate what systems they would be using."
In light of all this, it was hard to miss the irony of SAP's hiring rock band Aerosmith to entertain the attendees at Sapphire. As the band broke into its signature song, frontman Steven Tyler lustily exhorted an audience of finance types to "Walk This Way." Only the day before, SAP had finally stopped telling them to do just that. —TR