Você está na página 1de 70

M249 Test Prep Material

CPM includes the processes used to manage corporate performance, such as strategy formulation, budgeting and forecasting; the methodologies that support these processes, including the balanced scorecard, or value-based management; and the metrics used to measure performance against strategic and operational performance goals. CPM also comprises a series of analytic applications, such as BP&F, financialconsolidation, and financial-reporting solutions, which provide the functionality to support these processes, methodologies and metrics, targeted at the CFO, finance team, senior executives and corporate-level decision makers (see the market definition below). CPM projects typically focus on BP&F, or on financial consolidation and reporting. But CPM applications are also key in linking strategy to operational execution; they also leverage BI investments to bring consistency to financial and operational reporting, which can improve corporate governance, and can help address compliance issues. Increasingly, CPM applications can be used to identify the drivers of profitability to help organizations pursue profitable revenue growth. However, there is a lack of knowledge among most finance and business users about the potential of these applications, and few companies appear to be leveraging them to their fullest extent. The CPM suite market continues to experience strong momentum, growing nearly 28% during 2008. This is partly explained by an internal change in the way that Gartner analyzes the CPM market. In previous years, we identified the market as a composite of embedded CPM functionality in ERP and BI products, as well as stand-alone CPM suites. This year, we based market sizing only on stand-alone CPM suites. Figures for the previous year were, therefore, revised to account for this change in methodology, which concluded that the overall size of the market is now $1.867 billion, worldwide. This significant growth is due not only to acquisitions, but also to a strong execution by the top vendors' cross-selling and upselling CPM into their large user bases. Smaller vendors (such as Clarity Systems, Tagetik, Prophix Software and Exact-Longview) continue to do well and have been able to capitalize on the opportunity created by Microsoft's road map changes. Several factors contributed to the continued growth in CPM revenue during 2008: Microsoft is not included in upper quadrant. 1

Market Overview The market in 2009 was defined by the David and Goliathian struggle that occurred between resilient BI pure-play vendors and ostensibly omnipotent megavendors. The frenzy caused by major BI platform market consolidation in 2007 and 2008 gave way to a postacquisition hangover in 2009 in which megavendors customers reported greater overall dissatisfaction due, in large part, to the often messy postacquisition digestion process. Yet, despite megavendor acquisition growing pains, stackcentric buying led by applications and information infrastructure dominated BI platform investment decisions in 2009 with the top five vendors controlling 75% of the market. At the same time, however, based on the research conducted for this report and interactions with Gartner customers over the year, there is significant, if not euphoric, satisfaction with, and accelerated interest in, pure-play BI platforms. This is particularly true for smaller, innovative vendors filling needs left unmet by the larger vendors. To understand this paradox, it is necessary to consider a number of factors that are driving the BI platform buying decision today: Growing bifurcation of stack versus departmental BI buying. Market bifurcation continues toward strategic IT-led stack-centric buying based on dominant applications or information infrastructure stacks on the one hand, and business and department buying on the other hand. Pressured by new economic realities and the need to quickly demonstrate business value, business users often with an enterprise BI standard in place are increasingly turning to innovative, pure-play vendors offering highly interactive and graphical user interfaces built on alternative in-memory architectures to address their unmet ease-of-use and rapid deployment needs. The perceived benefit is so compelling that business users are making this choice, despite the risk of creating fragmented silos of applications and tools. Last years Visionaries become this years Challengers. Driven largely by business user buying, the data discovery tool architecture pioneered by last years Visionaries (for example, QlikTech [QlikView] and Tibco Software [Spotfire]) and new Magic Quadrant entrant Tableau is now becoming much more accepted in the industry. Organizations are rapidly embracing the idea of providing data to end users and empowering them with an ability to navigate and visualize the data in a surf and save mode as an alternative to a report-only architecture. Threatened by the success of these vendors (and adding to their credibility), traditional BI platform vendors are attempting to imitate them with easy-to-use interactive visualization alternatives (for example, Microsoft with PowerPivot, SAP with SAP BusinessObjects Explorer, IBM with IBM Cognos Express, and Information Builders with WebFocus Visual Discovery) often incorporating in-memory technology. This imitation, coupled with a growing recognition by user organizations that data discovery tools can be used as full-functioned BI platforms for a broader range of BI platform capabilities and use cases (beyond rapid prototyping), justifies the significant move of these vendors from the Visionaries to the Challengers quadrant. A Z-shaped movement in the Magic Quadrant from the Visionaries to Leaders quadrants is typical, as a vendor that may have been visionary in a specific segment becomes subject to a broader visionary lens and expanded buying requirements. The response of the traditional BI vendors to these new market Challengers will accelerate in 2010 and will likely lead to further industry consolidation, while at the same time putting pressure on Challengers that dont improve their enterprise capabilities and continue to innovate. Acquisition transition takes its toll on customers. Customer turmoil from acquisitions typically follows a life cycle. Initially, there is significant customer concern because of uncertainty about product road maps and commitment. This is followed by the actual execution of the acquisition transition in which support, contracting, pricing, sales territory alignments and products are often changed. This transition process takes time and is not easy on customers. Successful acquisitions at some point complete the transition and reach a new normal for customers. While Oracle, which acquired Siebel and Hyperion in 2005 and 2007 respectively, seems to be successfully exiting the back of this curve, as shown by significantly improved Magic Quadrant customer survey results this year over last, weak customer survey results for IBM and SAP suggest that they are still in the throes of this transition. This heightened level of customer dissatisfaction revealed in the customer survey is reflected in these vendors Ability to Execute positions. Shift from measurement to analysis, forecasting and optimization. While reporting remained the dominant style of information delivery of BI in 2009, the increased proliferation of interactive visualization tools pushed the power of data analysis and discovery into the hands of a larger number of users than ever before. Moreover, driven in part by the economic downturn, the need for more accurate forecasts and optimized business processes, and to identify leading versus lagging indicators, was on the rise. In response, IBM acquired predictive analytics market leader SPSS in the only major acquisition by a BI platform vendor in 2009. At the same time, many pure-play vendors (Information Builders, Tibco Software [Spotfire], MicroStrategy) and most of the megavendors (SAP, IBM, Microsoft) either introduced or matured capabilities to make statistics, predictive analytic models and forecasting algorithms more consumable in reports, dashboards and analytic applications. These advances constitute important steps toward increasing the availability of predictive analytics to business users beyond the traditional statistician

installed base. This shift in market center for predictive analytics has also resulted in a narrowing of Completeness of Vision leadership between SAS and many of the other BI market players.

Economic conditions driving interest in low-cost alternatives. BI spending remained firm in 2009 as organizations turned to BI to survive the worst downturn in modern history. While projects to improve decision making, identify operating efficiencies and risk, and attract new customers more cost-effectively continued, the need to do more with less more quickly increased interest in lower-cost options. Beyond Microsoft, the traditional low-cost BI platform, organizations showed an increased willingness to consider open source for their enterprise BI platform deployments, and interest in BI embedded both in packaged analytic applications and in business process platforms, and, to a lesser extent, in alternative deployment models, such as software as a service (SaaS). In response, this report includes commentary on some alternative vendors in these categories, which, while not meeting the inclusion criteria for the Magic Quadrant itself, offer a viable alternative for some organizations with specific requirements.

There are an awful lot of terms at their, message terms you may have heard; Business Optimization, New Intelligence, Smarter Planet, the Informationled-Transformation. But I want to do is put those in context so that you understand the logic for those different pieces.

So this is a conversation roadmap assuming we are going to talk about all those terms that are flying around. Here is how they would flow in a conversation around how we can literally help our customers to transform their businesses using information. The theme that starts out is the Smarter Planet one where the world is changing and it's becoming more interconnected and instrumented and intelligent. What that means is that organizations can wrap their arms around a new kind of intelligence to optimize their business. That kind of links Smarter Planet down to New Intelligence. Then we want to link that to what people do every day and so that is the next piece of the conversation on that second kind of tier there which is that really it's about an analytics and optimization strategy so that information is prioritized by what's important. That is the information that truly helps to drive business outcomes that transform your business. That is based on three fundamental pillars. One is the ability to plan and information agenda which it was the information agenda and the BAO or Business Analytics and Optimization Strategy Services. One piece is establish a flexible information platform which is all about the IOD software and solutions and the information architecture. Then the bottom right box there is it really where business analytics fits in. That is all about what our division does. You can see that there are arrows here to note that you can start anywhere. There is no sequencing so that first you have to do that in next you do this and next you do that. That is where we and our division, Business Analytics fit into the overall marketing engine and message platforms that are out there.

How our segment is going to use this conversation; typically we will start out at the Business Analytics level. Somewhere where someone wants a report or scorecard, or dashboard or predictive and really our conversation by in large is going to be at that level. After we have closed the deal or given the prospect or client what they want around that we may want to broaden up opportunity by talking to them about the Information-led-Transformation with the new intelligence and Smarter Planet themes in there. Typically our conversation will be at the business analytics level. When we are talking about it to executives or we want to include a component of thought leadership we will go the other way. We might start out as Smart Planet and then talk about the new kind of intelligence and Information-led-Transformation and then bring it down to our division and what we can do to help the customer make their business smarter. So there are two ways to think about the conversations while typically we will be the one on the left hand side where we really talk about Business Analytics.

So that is the overview on the messages. Now I want to get into how we will deliver these messages and what things we would say to open up opportunities for us. For those of you who are aware of the performance management framework we kept a framework and we have adapted the questions for couple of reasons. Number one is we needed to bring in that notion of predictive analytics and all the great stuff that the SPSS team brings to our portfolio. The other thing we needed to do was to decouple the capabilities we had in the rings from equaling any one product. So because we've got a lot of things now that will perform the analysis function for us based on what the requirement is and so we want to talk about broader grouping as opposed to one-to-one mapping.

Here is just a quick storyboard of how we are going to lay out an argument. We are going to talk about Business Analytics and we are going to talk about how performance and decision-making is central to optimizing performance. We are going to talk about decision-making that is aligned and people are informed and actually engaged in making the decision and it really does produce a better decision. Then we will talk about the three questions that really find the answers to those questions of the ones that drive the performance. We changed the menu will note now that we are talking about 'what is happening' which includes how to be get to this point which is the current status as well as some history. The 'why' and this is really about understanding trends and correlations, drivers, anomalies and cause and effect. Then 'what is likely to happen' and this is a question that is going to encompass probable outcomes and the 'what if' sandbox function that's in TM1 and predictive and scenario analysis. It also includes planning, budgeting and forecasting because we talk about recourse allocation here and setting targets on behalf of those resources.

Now we want to talk about business analytics. What we want to lay out here it is that this is a number one concern for CIOs. If our own first-hand research as well as Gartner's the last couple of years. This has been the number one top agenda item, top priority for CIOs. We want to lay that out so that we make that point in the conversation. The CIOs study is up on W3 and ibm.com. If you haven't read it I encourage you to download it and use it as a leave behind with your customers and prospects. There is a lot of great stuff in there and this might pique their interest to flip through the study and understand a little more background.

Data Trusted Information Decision Making Performance. This is kind of a core message. I'm communicating it using slides as a backdrop because I can't draw it out in this forum. I really urge you to use this as a white board or draw it out on a piece of paper for clients. A couple of reasons for that is number one I think it's just far more engaging and people are more interested in watching a story unfold as opposed to getting a pitch. So use the white board, use a napkin or use a piece of paper but I really do encourage you to write this out and explain it to your client or prospect as you are telling the story. Stop at points to make sure they are with you and they don't have any questions. That way it will be a far more engaging conversation. We really condensed it so you can drop it into lots and lots of conversations. So if someone says what is business analytics all about? You can say give me two minutes and I'll write out the high points for you and we can figure out if there is an opportunity in your organization to get engaged. This is the first kind of pillar that we want to do. We want to make sure we link to business outcomes, so how the organization is performing back through decision-making and down into the trusted information and the data that drives that. So drawing at these four boxes to the left of the paper as an anchor would be great. Then I would say something like how business analytics helps to improve business performance is through decisionmaking. If you think about it every decision that's happening in your organization is based on the information that people have on hand. That information is created from data and that data is grouped and categorized and designed and information that business decision makers use to drive better outcome.


In that way Business Analytics gives organizations the ability to kind of unlock the value of transaction systems and warehouses because they take the investments that have been made into those assets and bring it to the front line and make it actionable to improve business performance. Business Analytics gives decision-makers across the organization a clear view of what they need to do and how they need to do it.


Here we want to kind of dry of the three rings if you're doing this as a Chock Talk. So typically what I do by the way in terms of representing marketing and sales at customer service is I draw a little stick men around and we've got them shown here as pictures. I draw them as little stick men and then the three rings are the three questions. Decision-makers need to find answers to what's happening in their area of the business. This happens through highly visual dashboards and scorecards and financial and operational reports. It happens through realtime activity monitoring and by using those capabilities decision makers gain immediate insight into what's going on in their business. They have the ability to dig deeper and discover why (this is the second ring) why things are on or off track by analyzing trends and anomalies and collations as well as history and context. Than knowing what's likely to happen equips decision-makers with the foresight they need to intervene. Simulation with predictive modeling and what-if analysis enables decision-makers to predict and act. That means they can change the current course to improve the outcome. Financial and operating planning, budgeting and forecasting puts resources in the right place and set targets for those allocations. Those are the three basic questions and by finding answers to those questions, by providing decision-makers with what they need to finance that question they are able to figure out what we need to do and how we need to do it.


What is happening, why is it happening, what is likely to happen. This is where we get into the kind of 'why IBM' peace and once we've laid out these three circles and by the way these are not sequential either. You don't want to go first you got to do this and next you've got to do this and next you can edit it as. You just want to lay them out as a group because the real differentiation we have is that by informing decision-makers across the organization, by engaging them in improving the business outcomes and aligning them with consistent objectives, that's what we are all about. What sets IBM apart is our full range of capabilities and a consistent view of trusted information across the organization. So we are not fragmented by function or segment or data stores, we are unified across the organization, common dimensions and all that stuff is shared across the organization for a consistent view of what's important.


For this last build and just hit this point home about the differentiation, we would drive in just a shadow I guess or architecture of a couple of layers of the supporting platform and say these capabilities are part of one complete solution and because of that the value to the organization increases exponentially. If you think about it every time you strengthen or add one piece to a complete solution you build the whole thing. So information and the decision-making impact it has when it's delivered into the right hands, when it's accessible, when it's consistent across all the different functions of the organization, then that's when you can have a real profound impact on the business outcomes of an organization.


So that Chock Talk that I just delivered that you can deliver with your prospects is where I think the line share of our communication to our customers and prospects will happen, around the whole notion of Business Analytics and a highlevel view of what we bring to organizations through our capabilities and solutions. If you want to add on the Smarter Planet theme, (inaudible) a couple of slides that will enable you to do that and I suggest you just put them into the front and or back end of your pitches. I will give you the associated messages or communication that I would do if I were standing in front of these slides. To introduce the Smarter Planet theme I really do talk about the world getting smarter. It's increasingly instrumented, interconnected and intelligent and there is a whole bunch of new information that's coming out of this instrumentation, interconnectedness and intelligence. That is creating for organizations the opportunity for a new kind of intelligence that they can use in their business to drive better outcomes. The bottom line is that organizations have to improve their ability to turn the information and the data that is already existing in their organizations into information that decision-makers can use to improve business outcome.


Organizations can take advantage of these advancements to generate more revenue, cost contain, expenses, to manage risk and you can literally transform the organization with information because today business as usual isn't going to do it for you. There are all sorts of issues around how we are currently managing the business. For example retail and consumer products industries typically lose a vote $4 billion annually due to supply chain and inefficiencies. 59% of businesses do not have access to consistent information across the value chain that is most useful to them for managing the business. According to a recent Callahan study companies spend more than $360 billion annually turning information on the documents they receive every day into something that they can use as a relevant to run their business. So when you think about it in that context, the way we are doing stuff now is ineffective and it's expensive and it just doesn't work to enable the business optimization that is required for today's shifting and competitive environments. We have the advancements at our disposal to enable us to do better and that is one of the things that's driving this Information-led-Transformation.


When you think about the changes that we just talked about, the instrumentation, the interconnectedness and intelligence in our environments you can see that we are producing a massive lot of new information from news sources with new needs to leverage it. This really compounds some of the challenges that we've been having for a while now but it's just on a new scale. So the volume and variety of information both structured by the way and unstructured is just exploding. Once literally all the information that came to us was authored I somebody but now it's machine generated. It's coming out of our RFID tags and microphones and meters and so on and yet all that information is not grouped into a way that managers can use it to make decisions. So 1 in 3 of us have to make decisions based on without the information we need at our fingertips. There is an inability despite all this information to see around the corner, to look at what's likely to happen and out of that mindset make the right decisions about where we want to go to move forward. So 3 in 4 of us say we just don't have that information. All of those things really have led us to the point where Business Analytics is the number one concern for CIOs. This is where I would transition to the first Chalk Talk decked that I laid out earlier. So if you wanted to bring the loop back into if this was on the back end of a conversation you are having with customers, these four slides I just laid out would be the context that links Smarter Planet through to the issues that despite all the opportunity for this new kind of intelligence, here's the most reality for organizations and that's why Business Analytics is number one. I would leave the trail back to Business Analytics. If I were in a thought leadership conversation or an executive level conversation where I wanted to start with Smarter Planet I would put these four slides in the front end of the pitch and then bring it to the number one concern and get into the Chalk Talk. So that is the flow both for the Business Analytics kind of chalk talk and laying out what business analytics, this broader view of analytics is all about for our customers and how we would link it to kind of air cover that you will get from marketing as it relates to Smarter Planet and the Information-leadTransformation.


So now you should be able to deliver the Chock Talk to your customers and prospects as well as to make the links down from Smarter Planet to selling our software solutions. We've got to do a better job of that this year because we really need to use these messages to open up new opportunities for us in accounts.


General notes Market Opportunity o IDC 2.3 Billion 2009 industry o 2/3 of most successful reps selling FPM o 32% of all FPM buying on reporting and analytics FPM o Driving Performance Compliance and performance Status quo failing 62% encountered major risk event, 42% not prepared for the event Performance management lead in the company from Finance CFOs taking the next step with FPM Need to address performance gaps with enough lead time to make changes Solutions small problem with presentation is examples are enterprise companies o Enterprise Planning Takes too long and too much effort Connect planning, performance management and strategy Visibility, penetrating insight Cognos 8, 10 and TM1 o Reporting and analytics Proactive analytics with TM1 to address key performance pains Cognos 8, 10 and TM1 o Scorecarding o Close > Consolidate > Report (CCR) o Address > Drive > Extend > Advance o IBM Cognos solutions owned by Finance o Independent system that spans all data and applications o Viewpoint for governance o BI for express authoring mode o Analysis for Excel o BI Go! For dashboarding o BI Go! Mobile Building Opportunity Relevant in risky times


Our first fact today really comes from industry analyst IDC who puts the market for financial performance and strategy management software at over $2.3 billion for the upcoming 2009. Now in this October update, they cite trends for 2009 that include trends around consolidation, predicting it to remain strong and may even see a slight increase driven really by emerging markets. In the latest from Forrester Research, in a still yet to be published work actually, they cite growth rates for software in their business performance solutions category of nearly 13%. This category of BP solutions is comparable to our FPM portfolio today. Indeed, a vibrant market following this era of vendor consolidation. And finally, our last two statistics come from our very own experience serving FPM requirements worldwide. 32% of all the FPM buying agenda opportunities we closed in Q4 were on financial reporting and related analytics. This agenda joins planning and consolidation as a key FPM play. We believe that it's really a direct result of enterprises trying to get a handle on performance in uncertain economic times. Indeed, our most successful reps and your peers are using FPM to change the game. 2/3 of these reps that have achiever more than $1 million in revenue have engage FPM products in a significant way. The average revenue from FPM products for these reps is $555K per rep.


The status quo is failing the office of finance. Under intense compliance and performance pressures, neither dimension of that mandate being optional, excellence is expected around both. And the tools that finance relies on most (spreadsheets) have proven difficult to deploy for collaborative and analytic processes; disparate finance systems often limit accessibility of data and make one version of the decision-making-truth elusive; business risks abound and these risks put financial systems and processes to the test: plans and forecasts are unreliable, analysis to drive growth and profits or cost cutting and stronger cost discipline response to business challenges is slow at best.


The finance function and our customers are stepping up to the challenge. Nearly 70% of finance execs surveyed anticipated serving as the performance management experts for the rest of the company. And we know from our friends at Hackett, who serve as thought leader advisory to our very own Cognos Innovation Center for Performance Management, that the rewards for doing PM well are considerable. Done well, performance management means outperforming peers by a measure of 2.4x. And when you look still harder, you find that delivering 'corporate performance' is most reliably and inextricably linked with senior finance executives achieving the next career step. Truly good news for your team's morale and a fine reward to a job well done for our customers.


You're probably familiar with the performance management framework from other work you've done. But driving performance in turbulent times requires that whole companies assess quickly performance gaps with enough lead time to make course corrections that will ultimately help the entire company meet or exceed corporate objectives. It means answering these 3 basic questions: How are we doing? Why? What should we be doing? Let's see how the finance department puts this simple but colorful framework to work to be able to a catalyst for better business outcomes.


'CFOs have an opportunity to enhance their role as a trusted advisor, to help protect the enterprise's franchise, improve their enterprise response to turbulent times, and help the enterprise reprioritize'.


The reality is that the finance office has its finger on the pulse of major actions intended to drive out costs, improve profits, generate cash, all while managing risk. In fact, just to note a few, finance actions, as an example, in their own office they're going to pursue investments that help build sustainable, cost effective compliance with regulation such as Sarbanes-Oxley and similar regulatory requirements internationally. And they are looking at investments that also eliminate manual effort, like spreadsheet based planning and analytic processes. These are top of the list projects. These projects will help drive both dynamic and sustainable enterprise wide and enterprise deep FPM processes. How is it that our companies are going to protect profitable customers and manage away or manage to improve the performance of the unprofitable ones? How is it that product actions we take to eliminate unprofitable products and non-value added activities can contribute to the bottom line? What actions can we take with our suppliers to leverage our best suppliers and manage what is increasingly a considerable supply chain risk? What workforce actions can finance support to make sure that we are retaining the best and retraining the rest? What front office actions can we help to improve sales forecasting to manage pipeline risks, and use that better information base to improve working capital plans, whether they be about inventory or receivables. And finally in partnership with the CIO, what IT actions can we take in this economic circumstance to perhaps eliminate redundant projects or focus on faster, bigger payback? Indeed the influence and reach of the CFO's office increases in these turbulent times, and technology enabled solutions are appropriate interventions in these times that have a performance dividend over the long haul. So the office of finance is not just for finance processes anymore, but an entryway that offers sponsorship into may cross enterprise initiatives.


IBM Cognos helps companies struggling with annual budgeting, quarterly forecasts, and other financial planning that simply takes too long and requires far too much staff effort to update and maintain. increasingly, enterprise planning demands connecting financial and operational planning and performance management processes together in a connected, dynamic planning and forecasting nervous system. The best forecast incorporates the latest release the forecast is committed from, for example unit volume forecast, which originate with business managers in customer facing departments like sales and marketing. These demand forecasts are validated by capacity, production, and inventory plans by business managers and operations. And only then is the financial consequence of this top line forecast process truly in the hands of finance. And if revenue forecasts signal a downward drift versus targets or the latest plans, the enterprise may require a recalibration of expenses in capital expenditures; the signal needs to propagate out to business managers once again in some (maybe many or maybe all) departments to realign with new targets across workforce plans, investment funnels, other initiative plans. The time to align the organization will determine who wins and who loses as conditions change materially and often in an uncertain economic climate. Improved visibility, penetrating insight and complete control will be the capabilities that win. 26

Today, most organizations have operational and mission critical data spread across a number of different data sources and application environments. This creates silos of information. These silos let you see slices of performance, but often mean you miss the value of seeing the whole picture. As a result, companies have less visibility to the profitability of business units, of products, of customers, channels, markets; silos of spreadsheets and home build reporting systems used to gather, report and analyze data are often very cumbersome, error prone and very fragile. Companies need independent analytics, reporting, analysis systems really that span all of those enterprise applications from CRM systems, to supply chain systems, to supplier relationship management systems and consolidate that information into one unified view. Think of financial reporting analytics as really a platform capability that helps companies eliminate that wasted effort, inconsistent information, and improve the decision quality. Now what we're finding is IBM Cognos solutions in this area really gives companies an ability to get a complete consistent view of enterprise performance, build a continuous and confident connection to enterprise data sources, and instantly create this sort of business scenarios in an interactive and instantaneous way. That is providing a vital foundation for decision making, about performance and profitability, the profitability contribution of sales, marketing, operations, HR, IT programs and many other departments. think about financial reporting and analytics really as exposing the information, creating the information with the scenario analytics necessary to support decision making


Today, most organizations have operational and mission critical data spread across a number of different data sources and application environments. This creates silos of information. These silos let you see slices of performance, but often mean you miss the value of seeing the whole picture. As a result, companies have less visibility to the profitability of business units, of products, of customers, channels, markets; silos of spreadsheets and home build reporting systems used to gather, report and analyze data are often very cumbersome, error prone and very fragile. Companies need independent analytics, reporting, analysis systems really that span all of those enterprise applications from CRM systems, to supply chain systems, to supplier relationship management systems and consolidate that information into one unified view. Think of financial reporting analytics as really a platform capability that helps companies eliminate that wasted effort, inconsistent information, and improve the decision quality. Now what we're finding is IBM Cognos solutions in this area really gives companies an ability to get a complete consistent view of enterprise performance, build a continuous and confident connection to enterprise data sources, and instantly create this sort of business scenarios in an interactive and instantaneous way. So think about financial reporting and analytics really as exposing the information, creating the information with the scenario analytics necessary to support decision making.


In the area of strategy management and scorecarding, what has become clear is that this is an enterprise concern. At the highest levels, it's about strategy management and scorecarding, ensuring that enterprise scorecards reflect the best laid strategies of management's intent on how they're going to achieve their highest level objectives; that it provides a repository for initiatives that are actively being managed by cross functional teams; and that these scorecards are connected to line of business scorecards that help ensure some governance around the process of executing strategy. But we also know that there is a wide array of scorecards that happen at a departmental level, that ensure the visibility and the continuous monitoring of the execution of strategy by various departments, whether there is sale strategy scorecards, or supplier scorecards, or customer satisfaction scorecards. These are all vital to keeping the metrics that matter in the face of business managers as they execute strategy.


In the area of financial management and control, companies often struggle to create a timely, reliable view of actual financial performance. Processes in this area are often error prone and are taking too much time and effort. In particular, it's difficult to create the level of financial transparency to transaction systems that accelerate and support the financial close process. It's challenging for many of our customers to create the consolidated results that fully incorporate foreign currency translation and translation adjustments, elimination of inter-company transactions across multiple business units. And today's environment is really characterized by multiple general ledgers that are rolled up in the company hierarchy using hardwired spreadsheets and often custom software, or perhaps first generation consolidation systems. Acquisitions and divestitures of whole businesses really strain that whole consolidation business logic that is often hardwired into these home built software systems and legacy consolidation tools. Adjustments that are layered in are often error prone, and create delays in reporting. Significant staff effort is often required to make these systems responsiveness to those business change conditions as we've noted. Spreadsheet based reporting capabilities then struggle to meet the new financial and management reporting requirements. They struggle to meet the distribution requirements for example of this important financial performance management data back, feedback really, to internal stakeholders to the business. And of course, as we've learned with Sarbanes-Oxley, that huge introspection that many companies went through, that internal control surrounding these processes often requires too much staff effort to overcome. 30

The result is an inability to ensure regulatory compliance in a cost effective manner and deliver timely, reliable financial and management reporting.


Our experience tells us that addressing performance management challenges in discreet but well designed steps yields predictable and significant impact. The performance management roadmap we see here helps customers realize the maximum business value from the investments and people, process, and technology changes. We find that this discipline is equally effective across all financial performance management processes. Step one is about structuring and automating the key financial processes, often times moving beyond spreadsheets or spreadsheet only systems. Step two is about adapting and sustaining best practices. Step three is about extending enterprise wide often connecting financial operational reports, analytics, metrics and plans as we identified a bit earlier in our conversation. And finally step four is about advancing performance management by connecting performance management processes together. It's really a strong case for partnership with Cognos. Our Cognos solutions better deliver the best in class and 'owned by finance' solutions that are vital to phase one and frankly all the steps down this road. We better connect financial and operational performance management processes and practices, enterprise wide and enterprise deep. We stand as uniquely able at being this independent performance management system that spans all data, all transaction systems, and enterprise investments.


In the area of enterprise planning, our solutions are supported by IBM Cognos 8, both planning capabilities and business intelligence capabilities, because there is no planning process without related reporting and analysis. Our planning solutions are often powered by IBM Cognos TM1, and also supported by solution assets that included performance blueprints. In the area of financial reporting and analytics, this is a great opportunity to put the latest installment and innovation of Cognos TM1 and Cognos 8 BI to work. In addition, in the area of financial reporting, IBM Cognos 8 financial performance analytics allows reporting off of transaction systems, operational transaction data from GL, AR, and AP systems. In the areas of consolidation and corporate reporting, IBM Cognos 8 Controller, Business Intelligence, and perhaps extended reporting and analytics with IBM Cognos TM1 are the products to serve customers. In that area as well we have performance blueprints that help address specific pain points on management reporting, internal controls, and coming soon XVRL formatted output.


Finally, in the upper right hand corner, in the area of strategy management and scorecarding, our lead solution there is IBM Cognos 8 scorecarding supported by Business Intelligence. IBM Cognos 8 Business Viewpoint is an example for governance of the common dimensions that are employed in performance management applications, hierarchies, and the like; a very important addition to the portfolio. IBM Cognos 8 BI with it's Express Authoring Mode, which is very simple and easy to use for a financial manager hoping to create financial reports. IBM Cognos Analysis for Microsoft Excel (CAF), a great alternative for ad-hoc analytics and analysis all from relational as well as OLAP sources.

IBM Cognos FPM Enterprise Planning and Analysis Foundation Knowledge 70% of our FPM revenue is generating to a planning agenda. This agenda allows you to create a strategic relationship with our customers as well as a competitive advantage. the needs of finance are global regardless of industry and geographical location. IBM Cognos is not a newcomer here we have developed and championed useful frameworks like the PM framework noted here on the left to identify business impact of improved PM decision making. These frameworks help identify both short term intervention they can have particular fast and high payback in turbulent times as well as creating momentum with the transformation of our companies capabilities of competing in this new economic reality. TM1 gives companies dynamic control over their vital performance driving processes, plans and forecasts dynamically linked to corporate PNL, balance sheet and cash flow projections. Forecasts are refreshed on a quarterly, monthly or even event driven as need basis. We take customers from a limited reach low speed to high participation high frequency, we take them from financial only focus to planning, to driver base connecting across the organization and operations. And finally we did static long horizons and transform that into a rolling and dynamic horizons. TM1 is a core component of our Cognos 8 platform which is a patented 64-bit read-write in-memory OLAP engine that provides compact data storage and exceptionally fast performance. It has a model design and data access that presents business information in familiar formats, that familiar format is multi-dimensional which is the way we think in terms of budgeting and planning within the office of finance. It also has an ease of use thanks to a development environment that enables users to create sophisticated applications with no need for programming or traditional IT skills. Primarily development is in Excel, a tool we're all familiar in the office of finance but extending that capability to meet the enterprise needs of your planning processes across your organization. 34

Also there's an intuitive flexible approach which enables users to express complex, multi-dimensional business rules simply. It also uses analysis and planning together to provide greater accuracy in your forecasting process. And finally as I mentioned earlier it is a component of the Cognos 8 PM platform driving FPM across all our solutions.

Step one addresses initial needs. This typically is the entry point in which a prospect needs to solve a specific planning issue, i.e. expense, account etc. Our main competitors are vulnerable in these key areas and our customers are needed, with Hyperion taking an application approach to planning which cannot extend to the entire organization it is forced to either introduce other application or supplement their planning capabilities with that space. SAP through the outlook acquisition PBC also takes a very limited application role to planning Analysis of plans centers on exploring performance gaps, validating corporate drivers and assumptions, defining what if scenarios whether that be organizational, product family, product/channel mix etc. At the end of the day what we're trying to do is validate our planning assumptions, Cognos TM1s patented 64-bit read-write in-memory OLAP engine allows to optimize for large data volumes, that's how we can span both financial requirements and operational requirements. It provides instantaneous updates and the ability to stream data so your only limited in your analyze by what data you can get into TM1 because of its ability calculate on demand. It also has the ability to drill through to transaction systems for greater detailed analysis. So as you do your analysis your able to drill down to 35

the transactional record that are driving business analysis processes. It also supports multi-dimensional analysis so you can build complex views of your organization. It also has advanced sorting and ranking to provide key insights into identifying exceptions to your assumptions. And finally it does all this in a familiar Excel and web interfaces so it can easily be adopted by Power users and people throughout your organization. With TM! your able to move from analysis to modeling for your forecasting seamlessly all within the same product. And as always our main mantra here is owned by finance and the business user. We provide both familiar web and Excel deployment with rich workflow as well as application linkage so you can start small and expand across your enterprise wide and again there's a component of the Cognos 8 platform. Let's move onto to phase two or step two of our PM journey. Performance blueprints have long been a key asset in validating our value and reducing risk of adoption with Cognos products. These valuable assets are also being redeveloped in TM1, the four most popular function blueprint expense, workforce, capital and integrated finances will be rolled out in Q1 and Q2 thanks to the hard work of Clint Barker and the innovation center. So in summary IBM Cognos TM1 extends planning solutions to planning applications that require large data volumes and constantly changing data requirements. It adds unique analysis capabilities for existing solutions. So you shouldn't shy away from a Cognos planning customer who's looking to expand their solution set. It also provides an exciting fusion of planning and analysis capabilities for future applications and finally provides an additional tools to meet the demanding needs of the entire organization. Relevant information > Actionable insights > Smarter decisions > better business outcomes

Clarity Systems Sales Cheat Sheet FOR IBM INTERNAL USE ONLY
Products Clarity Systems Financial Statement Reporting (CLARITY FSR) solution helps organizations resolve challenges in the key reporting process connected to close, consolidate, report, as well as providing support to companies meeting electronic filing mandates and XBRL initiatives. CLARITY FSR enables development of new IBM solutions which Support and extend deployments of Clarity Systems with IBM technology _ Extend solutions through integration with market leading business analytic solutions portfolio Business Intelligence Financial and Predictive Analytics Financial Consolidation 36

CLARITY 7 provides core financial management solutions for finance: budgeting, forecasting and corporate reporting. IBM products target financial performance and strategy management solutions centered on the coordinated operational and financial performance management processes that include integrated business planning, business intelligence, financial analytics, profitability, predictive analytics, global consolidation and corporate reporting, compliance and risk management.
Competitive Advantages of IBM Clarity FSR

Proven software (multiple releases since 2007) Integrated XBRL Also used for regulatory reporting (e.g., eTariff), CSR reporting, public sector reporting Reduces risk while simultaneously reducing costs of compliance Links the final report to the source data Enables audit-ability of each section of the report Delivers multiple output options including XBRL A platform for GAAP to IFRS conversion Other problems that competitors have: difficulty handling detail tagging (Level IV) (e.g., no tagging within footnotes), minimal business rules, no snapshots / versioning, no sophisticated formatting features

For finance departments dealing with increasingly complex regulatory reporting requirements, IBM Clarity FSR is the only enterprise software that automates the external reporting process (e.g., Annual Reports) by linking the report to the source data, enabling auto-generation of the latest version of the report. Market Problems Need an Alternative to Manual External Reporting Processes: Must Comply with SOX Section 302 Corporate Responsibility for Financial Reports Must Comply with SOX Section 404 Management Assessment Of Internal Controls Impact on Management: Must Comply with SOX Section 404 Management Assessment Of Internal Controls Impact on Auditors: Must Comply with XBRL: Must Comply with IFRS in Canada: In the Future, May Need to Comply with IFRS in USA: Corporate Social Responsibility:
Key Benefits Summary

Reduce risk Improve productivity A single environment to produce all external documents in the most appropriate output technology (including XBRL) Comply with the SEC XBRL mandate (for companies that file with the SEC) A platform for GAAP to IFRS conversion (definitely in Canada, maybe in the future in USA, but not in the UK since they already use IFRS) Also used for regulatory reporting, CSR reporting

Manual External Reporting Processes:


Not Knowing that an Automated Solution Alternative Exists: This was a completely new market when IBM CLARITY FSR was launched in January 2007 and is still a relatively new market now. There is no real competition for IBM Clarity FSR (other than Manual Processes) and most companies are not aware that a solution could automate their external reporting process. Movaris (now Trintech) Might Claim to be a Competitor But Is Not: The closest thing to a competitor is Movaris (recently acquired by Trintech), a small company focused on Financial Close Reporting and Compliance that frequently talks about The Last Mile in financial reporting, but their offering is used by finance organizations to standardize, track and review financial close tasks during the auditing and reporting processes. We have yet to lose a deal to Trintech, and weve yet to see them convince a prospect that they can automatically create the full reports. Oracle Hyperion Financial Close Management and Oracle Hyperion Disclosure Management: o Oracle Hyperion Financial Close Management o Oracle Hyperion Disclosure Management

IBM has completed its acquisition of OpenPages, Inc., a leader in Enterprise Governance, Risk, and Compliance Management software. As part of Business Analytics, OpenPages enhances our Integrated Risk Management solutions, extending our ability to help businesses establish and maintain a comprehensive, consistent view of risk factors across the enterprise, including operational risk, financial controls management, IT risk, compliance and internal audit. OpenPages is a recognized industry leader by key analysts, with a strong base of loyal, satisfied customers and deep domain expertise. OpenPages is uniquely able to address enterprise-wide Governance, Risk and Compliance requirements, with a flexible platform that has been proven to scale, and is designed to provide an enterprise-wide view to risk exposure. OpenPages was positioned as a market leader for the third consecutive year in the recently released Gartner Magic Quadrant for Enterprise Governance, Risk and Compliance Platforms. OpenPages OEMs (embeds) IBM Cognos Business Intelligence


The Last Mile in Financial Reporting

The Last Mile

Planning Modeling

Budgeting Forecasting

Consolidation Reporting

Board Book, 10-K, 10-Q, Annual Report, Prospectus

Manual processes dominate The Last Mile Extensive use of MS-Word and MS-Excel, shared via e-mail Data accuracy issues Collaboration is difficult No internal controls No audit trail High degree of risk Manual process is repeated each reporting period
2 2011 IBM Corporation

Automated method to produce statutory, regulatory and internal reports 10K, 10Q, 8K, MD&A, Annual, Board Book, Prospectus, Flash or Management IBM Cognos FSR key features: Dynamically driven from a central database Leverage the formatting capabilities of MS-Word and the calculation features of MS-Excel Collaborative environment Security driven access with full audit trail Workflow for report reviews and approvals



FPM Presentation on Planning Heat Map


The notion here is that on the left, where it is red you have higher risk and lower reward actions and interactions with your customers and prospects. On the left, your conversations focus on solution capabilities, on features, on functions. As you move to the right, through to the yellow, you focus on the benefits the solution capabilities deliver, and on the far right where's it green, are conversations focused on the business value achieved, or the result from those benefits. It might still be competitive and an uphill battle, but you have a better chance of winning than if you focused on capabilities and features. At the same time, if you open up with value, your customer might respond, 'wow, if this is true what they can deliver, this might be my project, this might help me move my career forward in this organization'. You set the evaluation criteria, you can set the agenda and you'll be invited back for the next opportunity, the next and the next.


From a real practitioner's perspective; planning is all about resource allocation. It's about increasing their speed of reaction to what's happening in the market, allowing them to gain competitive advantage.


You can imagine after a couple months and sometimes even after a couple of weeks, the budget gets stale or out of date. Therefore, the third process here, forecasting, becomes the most critical and important one, because it contains the most current estimates for the balance of the year, taking in all new information and market conditions.


As you can see, it's all interrelated and Finance can act as the key catalyst, ensuring that all of the roles are facilitating the coordination of plans across the company, ensuring that the operational tactics are aligned with the financial targets etc.


You'll have a difficult if not impossible time winning, and unless you uncover the prospect's perspective, that is to say their perspective not yours, of the benefits they are missing today, you'll be hard pressed to establish a strong enough business case to actually win your opportunity.





financial statements need to be rewritten into a single currency, corporate and other types of allocations are made, minority interest holdings are calculated as well as intercompany eliminations where one may sell a good or service to another sub owned by the same parent company. When you speak with Controllers about their consolidation cycle some of the more common pain points multiple accounting software systems that are not integrated data collection and consolidation of the trial balances can be quite laborious and error prone a merger, acquisition disposition or percent ownership multi-currencies

So what makes the Cognos solution different and better? The fact that it contains out of the box functionality, a menu and parameter driven application approach that requires no programming is the key to keeping both the implementation and ongoing support cost low. The fact that there isn't the need to have programmers write code every time a change is needed, say for percent ownership or an intercompany offset with foreign currency enables the finance users, not the IT department to own the solution.


selling TM1 independently of Controller it is important to know that the TM1 sold with Controller V8.5 is a restricted license and does not allow access to the write-back capabilities or the planning capabilities of a TM1 full-license. There is the option of purchasing a TM1 full-license if there is a need for planning, budgeting, forecasting and what-if analysis.

IBM Cognos Controller 8.5 selling scenarios

New Cognos customers: Sell Controller with BI if only need is consolidation, reporting and analytics. A less robust option would be to sell Controller as a stand alone solution if there is resistance. If planning is also required sell full use TM1 licenses (utilizing write-back capabilities) Existing Controller customers: Upgrade to Controller 8.5 & sell BI Upgrade existing customers & sell full use TM1 license (reporting, analysis & planning) Cognos BI, Planning or TM1 customers: sell Controller

Qualifying the customers pain

1. How long does it take to close the books? How frequently?
Number of days Monthly, quarterly Spreadsheets

2. Is there a consolidation now or planned if so, how is it done?


First generation solutions Hyperion Enterprise, ERP Time spent on mechanics Number of people Time spent on data validation, reconciliations What elements are difficult to complete or missing What elements are manual

3. How efficient is the CCR process?

4. Are the Auditors/Controller meeting compliance requirements? 5. Do you see areas for reducing your internal audit fees?

The top five points are the most important. If you cannot get positive responses from these there must be other very good reasons for you to continue. This is especially true with Oracle Hyperion's HFM being the consolidation market leader as the major competition.


First it is finance managed, Controller has a proven record for offering short implementations and low maintenance. There is minimal IT involvement because it is an application approach, there is no programming, it is a menu driven and parameter driven process that allows finance users to easily operate and this reduces and eliminating errors, speeds up development time, and makes it more adaptable to business changes. Controller provides comfortable work environments like the web and Excel. Web includes full user functionality for all actions and Excel is for finance analysts that need a direct, secure interface to the data. Finally, the centralized access and control across the enterprise makes Controller secure and easily deployable.


Specific to Cognos Controller its capabilities are interwoven with solution best practices. For example there are now over 200 pre-built working reports that automatically support any implementation and make the closing cycle more efficient. There's also out of the box global design that provides for reporting against multiple regulatory requirements and understanding the adjustments. And there's rich functionality to achieve automation of currency exchange, inter company adjustments, minority interest, SOX and the newer enhancements mentioned earlier: flexible allocations, advance formula calculations, conformance and the financial analytical publisher.


There are 5 existing performance blueprints for Controller. One that is particularly relevant for up selling Cognos 8 BI to Controller customers is the Management and Financial Reporting blueprint This blueprint provides examples and templates for creating more robust financial reports as well as scorecards and dashboards utilizing the complete Cognos 8 BI suite. There are also four Controller related blueprints that are under construction which will tighten the interrelationship between Controller and the other Cognos solutions even more. Two that are particularly relevant include adopting the management and financial blueprint for FAP and delivering a closed loop expense planning blueprint for FAP as well.


A major message IBM Cognos has been spreading for sometime involves radiating FPM beyond the Office of Finance. The fact that Controller interfaces with TM1 and that TM1 is a data source for BI makes the suite much more powerful and all encompassing to both finance and users in other departments. Coupled with other data sources Cognos 8 BI is able to access the PM standardization platform is clearly in place to meet company's total PM needs.


Winning the Mindshare of the CFO

What used to be a position that had its hand on the pulse of the organization has transformed to the position that tries to make sure there is a pulse on the organization. Survival has become a priority rather than many of the prior reported indicators.


Everyone is trying to avoid or at least minimize risk in all forms. Companies have difficulty obtaining financing, demand for goods and services is off dramatically and companies are fighting for survival. Management reaction has shifted the focus on financial matters to a very short-term approach. Cash has always been keen but now it's more like oxygen; without it you're dead. Short-term cash savings are absolutely necessary to survive in the short term. The CFO is on the hook to drive cost and of the business, demand quick payback on investments, waste no capital and make everyone accountable. In many cases corporate actions have dictated the company's strategy be examined and in many cases reset to reflect the new focus. Business cases are revisited to ensure that payback, risk and return meat the renewed strategy. Proposals and strategies that don't fit the survival plan are often eliminated.


Several studies indicate that the items on this list although certainly incomplete contribute to the nightmares for CFOs and financial people in general. Forecasting, transparency (the new super buzzword), flexibility, accuracy, SOX etc. are all factors that need high priority attention. SOX has challenged everyone. If CFOs signoff on bad data they could go to jail, not just a little audit point in the annual report, jail. Where is our growth coming from? What are we going to do if this downturn continues? How do we react to shimmer all issues that certainly keep the CFO of that night. What is our current ratio? That is the ratio of our current assets to current liabilities. That gives you basically a feeling of can you cover your existing liabilities, your existing short-term liabilities with what you have in current assets. Will we be around next year? How long will our cash last? Are we going make a profit this year? Are our cash equivalents truly liquid? How many days in cash do we have left? What is the status of our line of credit? 59

Excel spreadsheets being bandaids for poor accounting systems.

Getting to the CFO directly while ideal is not the primary objective. This means be prepared or have somebody with you that can assist. Nothing could kill and meeting quicker than trying to talk to an item that you're not well-versed in.


The key to the truly effective conversation is in the business value. Transformation of the decisionsupport process, quicker reaction to the ever-changing market realities, transparencies, these among many other industry-specific value identifiers will get better attention. You will be able to establish some of the evaluation criteria and improve the chances of getting invited back to assist with the strategy, not necessarily with the CFO but with the trusted staff and with the CFO's endorsement.


Before we jump into the guidance I want to take a few moments to focus on the foundational basis that drives the majority of the objection. In fact close to 80% of objections is based on one of the first two 62

bullets that you see on the slide. Misinformation; generally misinformation is what comes to the customer or the prospect from the competition. Not always, but majority of the time it comes from the competition. The second is misunderstanding; simply that, a misunderstanding of what it is they've heard, read, or seen about the solutions that we provide. Understanding and recognizing that the majority of objections comes from one of these two, can really change the conversation that we have with customers. Our job then becomes simply to understand deeply, clearly and clarify what is the root of whatever it is they're saying. Now the other 20% of objections are based on the last 2 bullets. Sometimes it's actually based on fact and we need to acknowledge the part of the objection that's true. It could be on contract terms, it could be on implementation facts, it could be on product capability. But we want to acknowledge that. Now we may chose not to acknowledge that in a room full of people. We may chose a different way to acknowledge that. But we want to acknowledge the part that's true. And the last foundational basis is might be simply an excuse. It may be that your prospect is already made a decision and they're just looking for an excuse to get out of the conversation with you


So the model that we're going to focus on is starts with the 4 Ps. The first of the 4 Ps is pause.. One, is that it's a symptom of grouped sell versus team sell. If I as a speaker pause and one of my teammates from the back of the room might jump in thinking I don't know the answer. If that happens 2 or 3 times, well I'm going to lose credibility. So I don't want to be competing with my own teammates. The problem is you end up consolidating their objection. Perhaps they haven't even completed their question yet, or they may even answer their own objection before they even need you to respond. So the first thing we want to do is pause. And once we've done that, we can one of two ways. First we can probe, to make sure we truly understand the question. If for example your customer says I don't know Colleen, this looks complex. The point is make sure you really understand the question before you answer it. Second alternative is to paraphrase which is simply to net it out, particularly if you have a long winded person or a quiet person who is sitting in the front of the room. And then the last P is to provide the response. It takes a lot of patience and internal finitude to pause, to hold your tongue especially when we know it's a competitive set up. Practice in advance seems obviously and in fact that's why you're listening here, but it often doesn't happen. If you know you're going to get hit with the same objection over and over whether it's about an acquisition or a buggy software or whatever, prepare for it. The last piece posture, especially when it's a show stopper. When someone asks a question we know we have a real difficult time with, guess what's the natural body language?

Handling Objections
First, when speaking to our expertise in FPM you should include relevant customer success stories and reference, positive analysts coverage such as the Gartner Magic Quadrant. Secondly, include total cost 64

of ownership, independence from and ERP perspective, easily deployment and development, office of finance independence, and also that we have the industry 64 in memory technology which is Cognos TM1. Another objection area we here related to the FPM platform is the fact that we have separate products for consolidation and planning. While Hyperion has separate products a number of competitors have an all in one solution. Some of these include SAP, with our BCP offering, long view, SAS and . If you are working with a customer, whether consolidation requirements are light, and the customer does not need controller you may be able to position Cognos TM1 and an all in one solution if they're not already using Cognos planning. You can speak to the challenges of using an all in one tool. In the case of consolidation the technology solution has to be optimized for processing the organizational roll up of financial data which involves elimination, journal entries and currencies in translation. Data is not necessarily changing at the pace of what you would see in a budget or forecast process. There will be periodic refreshes of the data when loading updated, trial balance files from source systems. Journals will be entered and there may be some limited data input for supplemental schedules. In the case of planning, technology solution has to scale to a significantly larger number of users, support sophisticated calculations for drivers based planning, support a continuous re-write activity from contributors and also the system typically involves more dimensions. There is a continuous changing of the data and re-aggregation. In numerous cases the production plan that is used to drive the manufacturing driven components of the PML based on a completely different set of sales assumptions than the sales plan. This obviously gives the financial plan at a whole and the integrity of the plan is often poor. But leveraging the FPM platform will provide the organization the ability to develop operational planning models specific to the needs of the business area and establish linkage to a financial planning and integrated fashion. Tying this back to my example before, often late in the budget process, sales will want to change their numbers. Without an integrated model, the manufacturing side will not be able to float through changes at the lowest detail and should account for this change. A high level adjustment will be made across the sales. It will be difficult to assign any accountability to deliver the plan as a whole because this adjustment is outside of the detail.


One of the objections we often see with respect to reporting relates to application based reporting versus platform based reporting or reporting through the BI layer. It is important to have a reporting strategy for every opportunity. Showing everything isn't always appropriate. Looking at reporting from two different angles will help. First, you need to understand the reporting that is necessary to facilitate the process while it is being performed. Secondly, you need to look at the reporting requirements for this information once the process is complete and additional people will need to access the information. When BI is included, continuing to view reporting from the missing angles can help distinguish reporting capabilities embedded within the tools. For example with in controller, the Excel base reporting can be positioned more as a tool for financial statement review, account reconciliation, consolidating reporting with journal detail or generation of statutory reporting just to name a few examples. Typically customers will just purchase controller licenses for people who contribute or participate in the consolidation process. Broader reporting and data consumption can be achieved through published data and reporting through BI. The flexible reporting options need to be positioned as an advantage to the customer matching functionality of what we can provide towards what is appropriate given their requirements in their environment. The inclusion of BI in a solution proposal can become a challenge if the finance group has been self sufficient to this point, does not really understand the value of BI or is adverse to IT support implications. It will be more difficult to win finance over unless there is a broader value proposition for Cognos BI, beyond simply provided extended reporting capabilities for one process or data set. The IT organization needs to be on board and included in the process. From a cost perspective, additional information and implementation costs will need to be justified through the articulation of the value proposition. We already talked about implications of other road maps with respect to reporting and both that section and as well as this section will discuss the importance of developing a strategy 66

With respect to ERP relationships we often see 2 objection types. The first one deals with the customers preference to look at the ERP vendor first to address their inaudible needs of the ultimate goal of vender consolidation. With respect to integration and as you know Cognos is ERP agnostic and will always strive to support the accessing data to any source. But Oracle and SAP will continue to claim that their BI and FPM solutions will support environments using other ERPs, their motivation and RND opposites will always favor their solutions first. Also, under consolidation may not be to be integration. You should encourage customers to understand the integration points with either ERP vendors, often Cognos will provide better integration in either case. From the respect of dependencies on ERP components, as ERP vendors need to create the tighter integration between FPM and the ERP platform there will be more dependencies between the environments. Given that, there will be a list of future upgrade efforts that will involve disruptions of total solutions versus being able to address FPM and ERP upgrades as base initiatives. Lastly, customer will find that although they already have this ERP vendor in house, the Cognos solution could favor a lower total cost of ownership. From a consolidation perspective, while they are some companies who consolidate their data within the GL we typically see that the reporting component is still an issue since a report writing capabilities to create financial reports simply are not robust enough. Often there are multiple ERP systems and one is being used as the main consolidator. There are going to be challenges with mapping the data and, and an FPM solution will provide appropriate mapping capabilities that could be maintained by finance instead of IT code or mapping tables. It will also provide transparency to the mapping for control purposes. Is there efficiency and centralized process point of view and also from the stand point that Excel is now the broken record since the GL may not reflect final consolidated results. From the eliminations perspective you should question how many eliminations are automated or based on static journal entries. Using a consolidation tool will provides purpose type functionality to automate elimination that should change accordingly if the organization structure changed and the point of which the entry should 67

be reflected is now different. Lastly, you should also probe more into currency translations, of information based on the legal management view, control our stats requirement and security.

When talking to a customer who is using Microsoft Excel as their FPM platform here is some talking points to challenge why that does not make sense. Using Microsoft leads to islands of data. There are multiple spreadsheets and data bases which lead to inconsistent business roles, calculations or roll ups of data there for reporting. Spreadsheets and data bases sitting on various deliveries and laptops will be dependent on your team file server back up processes or in the individuals backing up their information. Anyone that can add this to their server can copy a workbook or data base onto a memory stick and walk away with multiple user's data. Potentially taking it to someone outside the organization or even a competitor. Linking FPM to system strategies, objectives or initiatives at the organization level, finance level or the IT level, will improve the perception of value. Customer case studies or references should be referenced be used to really enforce your messaging and lastly the benefits message will be more impactful if you can find opportunities if you can extend their leverage beyond platform and finance. When qualifying benefits there will be 2 types. The first type will involve the opportunity to redeploy resources from non-value activities to value added activities. The first triangle graphic on this slide shows the typical company profile where the base of the triangle shows a significant amount of efforts spent on collecting and reporting the data. The second type of quantifiable benefit will be true cost savings. Typically the opportunities will be quantified expectant improvement in a key metric based on better data availability and analysis capability. An example of this would be improved margins by 1% would see improved customer product profitability analysis capabilities. Some other opportunities are error reduction, estimated based on task errors and their financial impact, reduced software and hardware maintenance, consulting costs, trading costs, or lastly, employee headcount reduction that are costing you to only go where if the customer has 68

openly indicated they feel that this is an opportunity. Most recently a ROI tool was launched and it can be accessed on Extreme Leverage. It's called the Cognos PLPM ROI Analysis Tool and it can be accessed from the IBM Cognos Business Value Accelerators ROI page. It's a downloadable Excel work book and you can input various components of information related to some of the opportunities I just talked about and it will help you calculate benefits in ROI.