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Actuate Targets Financial Performance Management

With its new FPM offering, Actuate is competing more aggressively against performance-management specialists such as Cognos and Hyperion

• By Stephen Swoyer
• February 16, 2005

Just as traditional business intelligence (BI) leaders such as Business Objects SA, Cognos Inc., and Hyperion Solutions Corp. have pushed aggressively into the enterprise reporting space, reporting stalwart Actuate Corp. has pushed back. In late 2003, for example, Actuate announced an inaugural analytics offering, fleshing out its production reporting toolset with limited ad hoc query and multidimensional analysis capabilities.

This week, Actuate announced a new Financial Performance Management (FPM) offering that takes it further afield from its production reporting roots—and places it more directly in competition with corporate-performance-management (CPM) specialists such as Cognos and Hyperion.

With FPM, Actuate claims it is expanding the reach of conventional business intelligence tools. This is by no means an original idea, of course: The BI tools market is relatively mature, if not saturated, and most vendors are trying to target new, hitherto untapped, end-user constituencies.

Even so, says Actuate’s Richard Stark, an important group of users is ill-served by existing financial-performance-management tools.

“This is about enabling collaboration between a whole new community of users—the operational line manager and their manager, and that community of managers and the finance organization,” says Stark, director of financial-performance-management solutions for Actuate. “This documents everyone’s participation, and allows finance to monitor the performance-management process so they can know who has taken action on the information, who has viewed it, and who has approved it.”

Actuate FPM taps a combination of the company’s iServer reporting engine and Active Portal offerings. The result, says Stark, is a hybrid product that exploits iServer’s report-lifecycle management (e.g., authoring, distribution, auditing, and workflow management) capabilities to expose financial performance data, via Actuate’s Active Portal interface, to line managers.

“Executives lack confidence in the financial information because it isn’t approved by everyone in the organization who has fiscal responsibility,” he argues. “The only way you can do an accurate validation of that is to push it out to people like your line managers, so you can get that complete picture.”

For example, says Stark, customers can configure iServer to notify line managers—via e-mail, for instance—that they must approve their cost-center expenses before the close of the current fiscal quarter. A business-unit manager, for example, can view the line item expenses of her particular cost center through a Web browser, using Actuate’s Active Portal interface. Active Portal provides approximately the same view as Actuate’s e.Spreadsheet end-user reporting environment, complete with color-highlighted exceptions, so users can typically zero in on potential anomalies.

Actuate FPM embeds process controls directly into reports, which lets business line managers approve, reject, or annotate their cost-center expenses. If a line manager doesn’t believe a specific expense should be allocated to her cost center, she can annotate her expense detail Web report with an explanation of what concerns her. Elsewhere on the controls front, finance officers and other executives can also view the cost center expenses of line managers, and—if, for example, a business manager hasn’t yet viewed his or her cost centers—e-mail them directly or append (probably tersely-worded) annotations of their own.

The upshot, Stark argues, is more responsive financial-performance management. “If you ask many people if they use their monthly banking statement to manage their finances, few would claim that’s relevant, because they’re all doing it online, over the Web,” he explains. “In major corporations, they still rely on this rather quaint and antiquated notion that we’ll give you where you stand two weeks after you close [for the quarter] and allow you to react then.”

Last year, Actuate announced version 8, which incorporates enterprise information integration (EII) technology the company acquired from the former Nimble Systems. To a large extent, the FPM offering is a product of Actuate’s EII capabilities, which provide canned connectivity into ERP, budgeting, and other systems. Customers can build a solution with functionality similar to FPM using Actuate’s e.Spreadsheet, says Stark, who notes that insurance giant MetLife has done just that. At the same time, he adds, part of the value-add of the FPM offering is that it bundles connectors for PeopleSoft, SAP, Hyperion Essbase, IBM DB2, Microsoft SQL Server, Sybase, Oracle, Progress, Excel, ODBC, JDBC, and XML data sources.

“Financial performance management is something our customers are naturally doing with our platform. The reason they’re doing this is that there’s some great technology aspects of the platform that are really good for FPM,” he says. “But [the discrete Actuate FPM] has our EII capabilities, our spreadsheet, our scalability and performance, all of which are necessary to solve the biggest pain in the financial performance management world.”

Mike Schiff, a senior analyst with consultancy Current Analysis, says he likes what he sees in Actuate's FPM offering -- to a point. If Actuate gets any traction with FPM, Schiff says, it should be able to expand beyond its niche as a provider of enterprise reporting tools and reposition itself as a true solutions provider.

At the same time, Schiff says, Actuate may be overselling the benefits of FPM. “Actuate’s claim that ‘organizations typically do not distribute financial data beyond the finance department’ flies in the face of reality,” he argues. “While Actuate may facilitate this transfer, it is certainly not the first or only vendor to do so.” More to the point, says Schiff, with FPM, Actuate is subtly positioning its own EII-based offering as a functional alternative to a centralized data warehouse.

There are some serious drawbacks with this approach, he stresses. “Actuate has gone out of its way to position a centralized data warehouse, populated by ETL tools, as a lesser solution. This is simply not true, since both data warehouses and EII are components of an overall information architecture,” he says. “In fact, users must recognize that bringing together operational data from multiple, disparate sources risks the danger of consolidating inconsistent data, and a good EII solution should have a data warehouse as one of its sources, if only to provide a source for historical values.”