Slicing Up Data


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Maybe the fact that a $49 product like Simply Accounting 2005 offers 30 key performance indicators should say something about the spate of analytical tools hitting the market. And it also says something that Simply Accounting will define terms such as current ratios for its users. The tools available at all levels are getting more sophisticated and easier-to-use.

"We don't want to make the assumption that Simply Accounting users would know what a current ratio is," says Scott Zandbergen, marketing manager for the Accpac product.

Whatever the level of knowledge users have, vendors believe that they need new products to help make sense of their accounting data. And a flood of new products is hitting the market. But in most cases, vendors don't know just how receptive their users will be.

Partner Insights

"In general, analytical tools are very hot," says Jack Ades, a partner with Interdyn AKA, a New York City-based Great Plains reseller. "But it's been hard to come up with the killer analytical tool that does it all."

The sheer number of products available to the mid-market still remains a problem, says David Cieslak, a principal with Information Technology Group, an Encino, Calif.-based Best Software reseller.

"The problem is that there are so darn many of them. We haven't seen anything bubble to the top as the runaway hit," says Cieslak. "Better, smarter dashboards just don't have a steep adoption curve." Still, clients are interested.

"There is some work there and there are some dollars there," he says.

Not everyone needs the killer tool. Not all organizations need the same measurements. The calculations needed by a company using mid-market accounting software trying to make use of its accounting data aren't the same needed by a small or midsized accounting firm trying to analyze data in a practice management system to improve its marketing.

In the 1990s, many placed their hopes into systems using Online Analytical Programming. These systems performed multi-dimensional analysis, with pre-built calculations, usually termed "cubes," providing much of the functionality. OLAP tended to be expensive and the cubes were resource hogs. OLAP is around, but it's not the hot technology it once was.

"The problem is that KPIs vary by the individual organization," says Jim Foster, executive vice president of Best Software. "Your business partners have to be astute to that."

Often, analytical tools have often been low-cost affairs with little flexibility, or high-end products such as Cognos and Hyperion that are both expensive and complicated.

But from the lowest-cost product to the most expensive, these applications are part of a continuum of applications that may turn data into a more useable form.

Less than a year ago, CCH introduced ProfitDriver and PracticeDriver. ProfitDriver joined Accpac's Custom Financial Optimizer-both based on the same Australian package. Later, CaseWare also entered the growing market of "what-if" tools with CaseWare Scenarios. And at the end of 2004, Dexter, Mich.-based Creative Solutions moved into the field with Financial Analysis Solution, which starts at $600 for an annual subscription.

"It's a means of comparing the financial data of a particular client against peers," notes Jack LaRue, CSI's vice president of marketing. "This can be peers that an accounting firm has, or it can be against industry standards." In the initial release, CSI had not yet included industry benchmarks to its software, but expects to do so. The ability to recalculate changes will also follow in 2005.

The CSI package, which integrates with General Ledger Solution and Trial Balance Solution, will perform ratio analysis, as well as enabling users to aggregate data from their clients. For a firm that specializes in dentists, the practitioner could say, "Give me the information on a specific dentist compared to the aggregate group," he continues. The initial release of the CSI product is available via the Web, not on CD.

In general, these packages let users change data in, say a profit and loss statement, and automatically recalculate all related data so that companies can see how a change in the cost of one product would affect overall profitability.

It's not clear that the vendors know how these products will be received. ProfitDriver's release by CCH was somewhat low-key, and Foster notes that while Accpac has CFO, it has not been aggressively marketed.

However, Best Software just fielded another analytical application with its release of the e-Analytics Portal, developed by e-Analytics, a sister firm to Miami-based Dynamic Software Solutions International, an Accpac reseller. The tool gives firms that use CPAPractice Manager the on-screen drill down in analyzing their practice management data. (See related story, page 25.)

Meanwhile, CCH has begun giving ProfitDriver a harder push, having just signed Comprehensive Business Services as its first reseller - the first, in fact for any of its software products. "They've [CBIZ] already had some success with the product," says Mike Sabbatis, vice president of sales and marketing. He says CCH is open to enlisting more resellers, but is not ready to announce any additional dealers.

Sageworks, a Raleigh, N.C.-based company, is also adding "what-if" capabilities to its ProfitCents product line. Web-based ProfitCents initially focused on performing ratios and explaining the results in plain English.

"Now, we offer a benchmarking product, an analysis product, and a projection or scenarios product," says CEO Brian Hamilton. ProfitCents Projection, along with the other capabilities, is in a suite that is priced at about $500 a seat.

"We are saying if you are a CPA and have analytical requirements, you get them in a one-stop shop at ProfitCents," says Hamilton.

The capabilities in the "what-if" tools increasingly resemble those available in budgeting, planning, and forecasting applications, all of which appear to be converging.

For example, Adaptive Planning, a Mountain View, Calif.-based company, has launched a product of the same name, which has the same ability to manipulate financial scenarios.

"We often tell people that we have a budgeting, forecasting tool," says Robert Hull, CEO of the Mountain View Calif.-based company. He says Adaptive provides a variety of analytical capabilities in its Web-based package that strives for an Excel look-and-feel. The application will integrate historical data with budget forecasts. "On top of all that," he says, "We also provide you with the ability to look at KPI in a dashboard type format."

The Mid-market

The ability to solve problems with analytical tools hasn't been any easier to solve on the high-end than it has been with retail products.

"I've witnessed this complaint over and over. 'We've been collecting all this data in our business systems. How do I do something with this data?'" notes Chris Lenzo, director of products and operations for Macola. "Everybody knows how to create a pivot table in Excel. As the measuring systems have evolved-KPIs, balanced scorecards-they all seem to be trying to answer the same question: 'What does this mean and how does it impact my business?'"

Exact's answer is Business Analytics, written by Exact partner Vanguard Solutions. Starting at $5,000, Business Analytics offers a variety of ways to slice and dice data.

It provides a pre-built set of analytics that can be run against the Macola data stored in a pivot-table-like environment. It draws on data in company's applications, but it's not a data warehouse. While Business Analytics builds cubes, a high level of data compression means the application has a low resource use.

The software enables a user to perform such calculations as looking at accounts receivable or accounts payable, "any way you would like to slice or dice it. It has graphics and reporting engines," he continues.

Microsoft Business Solutions has also increased the number of analytical tools available through its four general ledger lines, although the company relies on its FRx software for much of its analytical functionality.

"That's by far the tool that's used most heavily," says Jeff Young, general manager for Great Plains and Solomon. "We continue to think about how deep financial reporting turns into analytics."

MBS's FRx subsidiary is also part of the trend towards reporting, budget, and forecasting tools that offer similar features and share common data. "There is a lot of cross-over functionality," agrees Andy Kamlet, FRx's vice president of marketing. "In the next release, we'll show the convergence happening." For example, the FRx Forecaster to be released in the spring will have updated calculation capabilities.

MBS has also has increased the analytic abilities of the accounting packages, although it is highly recommending tools developed by two of its resellers, Professional Advantage for the Great Plains line, and NexVue Information Systems for Solomon. Not only do those products provide analysis, they also are suited for serving vertical markets, says Young.

A Big Demand

Solomon reseller Dan Schwartz, who owns Stamford, Conn.-based NexVue, developed his own software six years ago because he wasn't happy with the tools available.

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