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An Operational Spin on Performance Management

Whether it’s Oracle and Hyperion or the future of BI and PM, Information Builders chief Gerry Cohen doesn’t mince words.

• By Stephen Swoyer
• March 28, 2007

Believe it or not, Hyperion Solutions Corp. was the subject of takeover speculation on several occasions prior to its acquisition last month by Oracle Corp. Hyperion’s list of suitors reads like a Who’s Who of the BI industry’s elite—both SAP AG and the former Siebel Systems Inc., in addition to Oracle, were linked at one time or another to Hyperion—but the name of one rumored Hyperion suitor sticks out like a sore thumb: Information Builders Inc. (IBI).

IBI chief Gerry Cohen pooh-poohs—but doesn’t flat-out deny—the suggestion that his company once considered acquiring (or merging with) Hyperion. "I’ve heard several [companies] mentioned there. There were always rumors. What else do you expect?" he comments.

More to the point, Cohen continues, IBI and Hyperion just wouldn’t have made a very good match. For one thing, he maintains, both companies target very different market segments. "[Hyperion is] in the sector of BI that’s largely BPM, and that doesn’t affect me very much, because that’s a minor piece of my part of the business. They’re only in really [financial performance management], because they do budgeting. That’s where you take your budget numbers and they show you how well you’re doing against budgeting," Cohen says. "We’re in BI applications, where large numbers of people get information that’s in the system that’s been built for them. [Hyperion is] more [for] analysts or power users. We’re able to reach out to power users and non-power users."

Cohen’s neat demarcation is undeniably self-serving, too: while Hyperion itself might specialize in FPM, its Intelligence reporting tool is based on software it acquired from the former Brio Technology Inc. In its heyday, Brio was a respected BI provider in its own right. Moreover, its flagship reporting tool (Intelligence) is still used in many operational reporting scenarios and is embedded with a number of applications (including PeopleSoft).

Nevertheless, Cohen claims, IBI’s WebFOCUS tool is embedded in more applications, and exposed to more users, than any other reporting solution on the market. "If you want all of your customers to find out what’s going on, if you’re a bank and you want your trust accounts to know what’s going on in their accounts, you’d build an information system for them; they wouldn’t be getting their own reports," Cohen indicates. "Brio is designed so that you as a power user would be navigating around fields on a screen and get a report. That’s not what you want to do if you want to [expose] it to your customer."

Not that IBI doesn’t have a horse of its own in the ongoing performance management (PM) derby. Cohen and company push an IBI-centric vision of PM that they call operational performance management (OPM). He says OPM draws on IBI’s strengths in scalable, high-performance reporting, pervasive embeddedness, and rich connectivity, courtesy of the company’s iWay Software Inc. subsidiary. "We’re in largely the operational BI business, where people use BI to do new applications, to build new information systems that they use for a profit-making reason, or a competitive reason, or just to do the job they do better or more efficiently," Cohen comments.

But isn’t OPM just marketing-speak for BPM, which most of IBI’s arch-competitors are also branching out into?

Cohen emphatically rejects this identification. "BPM is mostly financial performance management. That’s taking numbers out of the accounting and budgeting system, [which is] run by the CFO," he indicates. "Operational performance management is a specialty. It’s a niche area that in the last three years has been attached to the BI marketplace. If you go to Gartner and you say, ‘What do you have to be to be a BPM player?’ they’ll tell you that you have to have a budgeting system, a financial performance management [system], a cost-based accounting system, [but] what does any of that have to do with BI?"

By the same token, how do Cohen and IBI connect OPM with BI? Cohen says OPM draws on the bread-and-butter reporting and analysis assets that—in most organizations—comprise BI. "You might be a hospital and you want to keep track of the utilization of beds, and the goal is maybe to increase the profitability of the hospital or the utilization of the facility, because you want to reduce unpaid bills, you want to give more business to the profitable doctors, and they’re not necessarily things that are budgeted in your accounting system," he explains.

In this example, Cohen says, OPM outstrips vanilla BI because it provides actionable insight that helps a hospital manage its performance—expressed as a derivative of profitability and utilization—on an ongoing basis. "They’re not necessarily the financial metrics you would measure with financial performance management [tools], but they nevertheless help drive profitability," Cohen says.

Elsewhere, while IBI doesn’t compete head-to-head with Hyperion all that much, it does regularly butt heads with Oracle—or, more specifically, with Oracle’s Siebel Analytics-based offerings. "Oracle has been very successful in pushing Siebel Analytics into the more mainstream marketplace," Cohen concedes.

At the same time, Cohen continues, far from ratcheting up the pressure on IBI, Oracle’s Hyperion gambit will complicate things for PM pure plays such as Cognos Inc. and Business Objects SA. If anything, he argues, IBI could benefit from Oracle’s move.

"It puts Oracle into performance management from a financial point of view, so it definitely strengthens Oracle in the Chief Financial Officer’s office. That said, there’s going to be a lot of CFOs who are going to be put out because they don’t like Oracle or they don’t want to be dependent on Oracle," he points out. It stands to reason that a few Hyperion BI users are also going to be "put out," too, Cohen says. "We don’t really see them in traditional BI. But for [Brio] users who aren’t primarily dependent on them for FPM [financial performance management], we have a very attractive offering in WebFOCUS."