Taking Data Apart

Tools are proliferating as businesses strive to turn their data into information they can act on.

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A food manufacturer, a client of Rina Accountancy, an accounting firm based in Walnut Creek, Calif., was struggling with what to do to improve cash flow and deal with major debt commitments. The client had spent time manipulating the numbers in his profit-and-loss statement. But Tim Tikalsky, head of Rina's consulting department, says that what the client really needed was a study of his company's balance sheet. While the client had been juggling the numbers in Excel, the standard for much budgeting and analysis, Tikalsky used ProfitDriver, a data analysis tool marketed by Riverwoods, Ill.-based CCH.

"I spent 10 minutes plugging the numbers in ProfitDriver into its sensitivity analysis, and the first thing that came up was 'Increase your prices,'" says Tikalsky. "He said, 'I can do that.'" The change was possible only "a couple of pennies" on each product and because the pricing fit nicely into price breaks in the competitive landscape.

"He did it and the rest is history," says Tikalsky, who continues to use ProfitDriver at the client's board meetings to make presentations to analyze results.

Partner Insights

eAnalytics eAnalyzes Financial Data

Sometimes, users just don't understand business intelligence tools. Consider one prospect that objected to the price tag for eAnalytics, an application that integrates with a variety of Sage accounting packages

"She said, 'I'm not paying $6,000 to $8,000 for a report writer when I can get Crystal [Reports] for $300,'" relates Peter Kaufman, the Miami businessman who owns Accpac reseller Dynamics Software Solutions International, and a sister company that markets the eAnalytics Portal.

Kaufman says that eAnalytics is not a static reporting tool like Crystal. Instead, it produces a data warehouse. "It's designed for crunching massive volumes of data," he says. That can make it a suitable tool for companies such as distributors that can have up to 50GB of data. The system will perform calculations such as realization analysis, profit analysis, and compare budget to actual figures. The tools it features include performance dashboards, balanced scorecard views, statistical and sales data maps, pivot tables, and charts.

Kaufman's organization markets editions for Sage Accpac ERP and Pro ERP, as well as for MAS 90/200/500, and the Abra human resource application. There are two versions, one for the reseller channel to market. The other is designed for CPA firms.

"Every CPA firm has some custom computation that we end up adding. Different firms have different thresholds of what they expect to bill. Some people have multiple levels of billing codes," he says.

The system has different pricing for different applications. For Accpac and MAS 90, the price is $10,000 for the portal, including unlimited users, for the basic analysis. Modules for inventory, payables, receivables, and manufacturing are priced at $2,500 each.

CPA pricing is based on the number of users, not the number of modules. The price is $6,000 for one user, $8,000 for two, with prices ranging up to $30,000 for unlimited users.

Accounting firms using the product typically have more than 50 employees, although there are two with fewer employees. Kaufman says that eAnalytics is being used by Cherry Bekaert and J.H. Cohn, which each have 150 to 200 users.

In the world of analytical software, applications such as ProfitDriver aren't among the most sophisticated offerings. But they are tools that can enable accounting firms to shift their focus from historical numbers to a more consultative approval.

"It's the whole concept of performance management. It's looking at processes in the organization, and measuring the performance of those processes," says Tikalsky, whose consulting operations spans a variety of non-traditional practice areas that include business valuation, cost segregation, litigation support, and process improvement.

There are many products such as ProfitDriver that can generate ratios. This particular variety can also dynamically recalculate financial statements. If a business wants to see what happens if it changes cost of goods sold, or seeks a higher operating margin, a change to one measure will result in all dependent numbers in the statement being recalculated.

It's that what-if ability that makes these products useful. Most often, the applications are not sold to clients, but are used by firms like Rina to generate analysis that can be used as a foot in the door.

"That's why ProfitDriver is a giveaway," says Tikalsky, who is also certified in performance management. The firm will put a client's financials into ProfitDriver and communicate the results. Often, the client will hire Rina to suggest and implement improvement most because they believe that "You know our business better than I do," says Tikalsky, relating a common reaction.

There are a number of these scenario-generating products, including the appropriately named CaseWare Scenarios from CaseWare International, Financial Analysis CS from Creative Solutions, and Comprehensive Financial Organizer from Sage Accpac, which is based on the same Australian product as CCH ProfitDriver.

While it's safe to say that these products have proven valuable to firms that are able to perform analysis and suggest and sell new services, they haven't been a hit. But they are part of a renewed interest in analytical tools that include a variety of applications such as forecasting, budget, consolidation, reporting tools, and one of the decade's sometimes scorned buzzwords, business intelligence.

All of a sudden business intelligence is a hot phrase-again. It had some life before. But this time, there is something different; something more practical. There is confidence that BI can deliver on its promises.

The Truth and Nothing But

One phrase captures the impetus to find tools that can analyze the data in business computers. That phrase is, "One version of the truth."

That is because many organizations have data spread out among different applications, different networks, and different servers and desktop PCs. One common complaint is that business people often spend much of their meeting time trying to find where different financial figures originated. And one of the ways that many different versions of "the truth" appear is through the use of that universal tool, the Excel spreadsheet.

Vendors have been getting into the market by adopting packages that were already on the market. CCH, through the former Sage Practice Solutions, is marketing e-Analytics, whose owner, Peter Kaufman, owns Dynamic Software Systems International, an Accpac reseller. Exact Software began marketing a package from Vanguard Systems, which it later acquired. In March, Microsoft agreed to market BIO, an analytical package for the Dynamics SL application, under Microsoft's name.

BIO, written by NexVue, a Dynamics SL reseller based in Stanford, Conn., is not a new product. It has been on the market for about two years and will continue to be marketed by the VAR.

BIO was designed to meet the needs of mid-market companies in the area of business intelligence market, says Dan Schwartz, NexVue's president. Before his product hit the market, Schwartz says that most BI applications have been enterprise-level, such as Cognos and Hyperion.

"There has been very little acceptance of BI in the middle market because of cost, complexity, and reliability," says Schwartz. NexVue's idea was to design a BI product for the middle-market based on the Microsoft platform and that was based on business issues.

"We took it from a business angle first, rather than technology first," he says.

Vendors with Analytical Tools

Business Objects

San Jose, Calif.

(866) 681-3435

www.businessobjects.com

CaseWare International

Berkeley, Calif.

(800) 267-1317

www.caseware.com

CCH Tax and Accounting

Torrance, Calif.

(800) PFX-9998

www.prosystemfx.com

Creative Solutions

Dexter, Mich.

(800) 968-8900

www.creativesolutions.thomson.com

eAnalytics

Miami

(305) 461-9191

www.e-analyticsportal.com

Exact Software North America

Andover, Mass.

(800) 468-0834 ext. 2650

www.exactamerica.com

Microsoft Dynamics

Fargo, N.D.

(888) 477-7989

www.microsoft.com/dynamics

NexVue Information Systems

Stamford, Conn.

(203) 337-0800

www.nexvue.com

Q4Bis

Irvine, Calif.

(949) 442-8326

Sage Accpac

Pleasanton, Calif.

(800) 773-5445

www.accpac.com

SageWorks

Raleigh, N.C.

(877) 724-3967

www.sageworksinc.com

Vanguard Solutions

Analytics

Glen Ellyn, Ill.

(630) 545-1600

www.vanguardsolutionsanaltyics.com

The user interface was designed for a self-service approach so users could learn how to use it with minimal training, "and that means under an hour," says Schwartz.

Whether anyone would agree that NexVue's approach is the best one, most mid-market vendors concur with Schwartz's description-that previously most BI products have been too pricey and too complicated for mid-market users.

BIO will remain focused on the Dynamics SL market as Microsoft is building its business intelligence platform on SQL Reporting Services, which it introduced three years ago. This approach will be applied to Microsoft's other mid-market accounting packages, Dynamics AX, GP, and NAV, formerly known as Axapta, Great Plains, and Navision, respectively.

That vision was outlined at Microsoft's recent Convergence user conference, where analytical tools were an important topic.

The Excel Factor

Many vendors are dealing with the fact that Excel is embedded deeply in most the financial departments of most companies. As a result, even Microsoft has developed an approach of having applications that work with Excel, instead of trying to replace it.

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