Oracle Pushes Deeper Into Performance Management

Oracle's announcement of its Enterprise Performance Management (EPM) System this week provides the clearest view of its business intelligence strategy since its $3 billion-plus purchase of Hyperion in 2007.

The company is touting the EPM product's now-complete integration with the Oracle family of applications -- the Siebel customer relationship management tool, PeopleSoft, J.D. Edwards, and the rest -- as well as its ability to hook up with third-party databases and business applications, including SAP. "The nice thing about this system is that it doesn't require a customer to have the Oracle transaction system," says John O'Rourke, senior director of product marketing with Oracle. "It integrates with a variety of different data sources and transaction systems."

That will be welcome news in the market, according to John Colbert, vice president, research and analysis, with professional services firm BPM Partners in Stamford, Conn. Participants in BPM Partners' 2008 BPM Pulse survey were asked where they would look for advances in business performance management and business intelligence technology. While about 30 percent said they would look to their own ERP provider first, "a good chunk -- about 20 percent plus" said that they would also consider looking at other ERP vendors for an opportunity to learn more about these technologies, Colbert reports.

"And that's what performance management is all about --having a variety of disparate systems and pulling a significant volume of data into a repository or data structure where it can then be shared by a large number of users," he adds.

Oracle EPM System has numerous features that will interest finance users, including tight integration with Microsoft Office. For example, you can embed analytic information into a PowerPoint presentation, and then when you go to meetings, the system can connect to the server and update your slides with the latest data. When you're working on financial reporting documents you don't have to leave the system to make annotations or send notes to people; you can simply annotate the document itself.

A function called Calculation Manager lets you define business calculations and formulas centrally so you can ensure that you're using a particular formula (a cost allocation formula, let's say) consistently across different processes, such as planning and consolidation.

But the most significant new functionality is a module called Oracle Hyperion Profitability and Cost Management, which "enables companies to pinpoint their most profitable assets and identify opportunities to improve resource alignment and profitability," according to the product announcement.

In the current economic climate, those capabilities are high on companies' wish lists for any BPM purchase. Oracle is trailing its competitors here: SAS Institute and SAP have established products in this space, and Cognos has a relationship with Acorn Systems to provide a similar capability to its clients. But the field is still wide open, according to Colbert. "Profitability optimization is hard to do," he says. "It's a fairly technical, fairly detailed overlay of very granular data. The challenge is: Who can do it right -- without creating a major implementation project out of it?"

That remains to be seen, but there's no doubt Oracle's package will be a strong contender. "They seem to be singing the right songs," says Colbert. "It'll be interesting to see how the market accepts it."