Management systems for financial performance (FPM)

As a rule, systems belonging to this category represent tool kit of planning, the reporting and analytics allowing the companies to manage financial information.

Appointment of FPM

Using the FPM systems, the companies can:

• Control financial statements and disclosure of data. Management of finance is regulated by a difficult complex of the precepts of law developing into a set of accounting procedures and regulations concerning that, how exactly the organizations need to collect and prepare reports on financial results. For firms of some directions of business doing the international business of state companies and to that similar disclosure of financial data is obligatory, this process just and can support FPM systems.

• The FPM systems can provide timely and objective data on a financial status of the organizations for operating managerial supervision behind their activity, control and efficiency analysis of activity and profitability of business. Here widely used instruments of monitoring of KPI (key performance indicators), instruments of creation of difficult distribution models of costs for assessment of business potential of products and clients belong. Often for these purposes powerful tools of analytics, graphic visualization are used, mobile applications are involved.

• FPM systems also allow to perform financial planning and forecasting, including to build the forecasts of the budget used by the companies for strategic control of finance and anticipation of changes. Such opportunities of FPM become even more relevant during the periods of economic instability. Using planning tools of the company can create plans, budgets and forecasts for the different temporary horizons, at different input and using models of calculations excellent from each other.

Merits and demerits

Analysts of Forrester Research note that FPM systems often have also shortcomings. First of all, it is complexity of data loading in such systems from software integrated business (process often is long and covers a set of sources: several accounting programs, data of purchasing systems, inventories, data on receivables and so on).

There are also difficulties with submission of data in different controlling organizations, the state departments where standards of submission of information occasionally are registered very strictly up to specific formats of unloading. Sometimes systems lack flexibility: traditional process of budgeting takes a lot of time, it is much more, than occasionally is available for decision making in the changing conditions.

Nevertheless, new technologies are actively built in FPM systems, increasing their flexibility and performance. It is about calculations in RAM, solutions for processing of "Big Data", demand for mobile and SaaS of FPM grows. Also financial data are analyzed even more often together with data on the external environment: financial metrics, currency rates, data of security markets, even data on weather and road traffic if it is critical for business. For example, such opportunity is given by Host Analytics within the product Decision Hub. Vendors of FPM work on simplicity of updates and a usability.

World market

Market size

According to IDC of May, 2012^[1], the world market of the FPSM systems (financial performance, strategy management, and GRC applications market – so it is called in terminology of the agency), reached the volume of $3 billion at the end of 2011 that is 16.3% more, than the previous year.

Among vendors, according to IDC at the end of 2011, 62.5% of the market were the share of the three of IBM, Oracle and SAP in comparison with 61.4% in 2010. According to forecasts of the company, in 2012 the market had to show also good results.

The largest vendors

In 2013 experts of Forrester Research The Forrester Wave^[2] estimated the key solutions presented at the world market by FPM on 55 criteria concerning opportunities of systems, plans of vendors for their development (development strategy) and the width of use, satisfaction of users and capabilities of systems to meet corporate needs.

As a result the largest players of FPM called the companies Adaptive Planning Host Analytics IBM Infor Longview Solutions Oracle Prophix Software SAP SAS, Tagetik Software and Tidemark Systems.

The largest players in the world market of FPM systems

Forrester Research, 2013

Forrester makes a reservation that from 11 vendors only the Oracle company refused to provide necessary data, but, in view of its significant role in the market of FPM, experts after all turned on it in final assessment and the scheme, having carried to leaders.

Along with Oracle group of leaders IBM, SAP, Tagetik Software and Host Analytics formed. The last two are specialized players, however, the first has a great number of large customers and provides very deep functionality, and the second is in the lead in deliveries in a cloud segment.

Infor, SAS, Adaptive Planning, Longview Solutions and Prophix Software treat strong players. So, at SAS very flexible solutions for predicative planning and strategic management, Adaptive Planning is quickly growing SaaS player, Infor successfully combines the checked technologies and innovations.

Prophix Software represents balancing and available solutions for the average amount of business, and Longview Solutions - complex solutions for the most exacting needs. Tidemark Systems, a startup visionary, whose offer is under construction on user-friendly, social, cloud and mobile computing and also big data.

Notes