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Q&A: Business Analytics Poised for Disruption

Engaging users directly with business analytics cuts to the chase, saving analysts' time and resulting in quicker answers.

Any enterprise still performing either an "annual budget" or a "monthly reforecast" should reconsider its approach, according to Tidemark co-founder and CPO Tony Rizzo. Instead, companies need to create an environment for more rapid, well-informed, and actionable decisions. Tidemark, an enterprise analytics firm, says it offers a new approach to analytics that can address those issues. In 2013, Forrester recognized Tidemark as a "a visionary startup looking to disrupt the [financial performance management] category with compelling usability and a product built with the latest advanced technologies like mobile, social, cloud, and big data."

BI This Week: Please define some terms first. What is enterprise performance management (EPM), and how is it now overlapping with business analytics (BA)?

Tony Rizzo: In my mind, EPM is very different from business analytics -- although it does also entail some analytics components. BA typically is about using statistical models to analyze historical performance and leverage that to provide some prediction of future performance. EPM can include some statistical analysis and prediction, but is much broader in its view of the organization (cross-functional and top-to-bottom processes) and involves more user-driven methods for planning and understanding future performance.

Why does Tidemark see business analytics as "the next major IT segment poised for disruption?"

The trend we see today with business leaders across the enterprise is the desire for more and better analytics to enable data-driven decisions. There is so much data being accumulated today -- both inside and outside a company's walls -- that smart decision-makers want to leverage it and use it to their advantage.

The proliferation of data today is analogous to the proliferation of the Web back in the heyday of; the more data you can have access to in one place and the more capabilities you have to analyze it in different ways, the better your decision-making will be.

What's been holding BA and EPM back so far?

I believe technology and cultural change are the two most prevalent reasons why BA in combination with EPM has not been as widely adopted as it should be. The first challenge with the technology is that so far no vendor has been able to provide all the capabilities necessary to truly enable data-driven decisions. This means that several products or tools are required to get the job done, which creates silos of data. Effective decision-making cannot occur across the enterprise if there isn't a single, trusted source of analytic data.

The second challenge with cultural change is that it can be difficult and sometimes painful, but is necessary for true transformation. To be successful, BA/EPM needs to engage more than just a handful of smart people in financial planning and analysis. However, many individuals, especially in financial planning and analysis, typically don't want to let go of the centralized decision-making that they are comfortable with. For BA/EPM to be successful, you need alignment of the organization from strategy to operations.

What is the "old" approach to business analytics, and what are the characteristics of a new approach? Why is a new approach needed?

The old approach to business analytics involves long and expensive software implementation cycles that are driven from a "data first" perspective. Rigid data models are constructed to conform to a relational or multi-dimensional database model. Once implemented, they negate any flexibility. Also, there are usually several tools that the analyst needs in order to manage all the required data and information. Basically, the analyst ends up unable to analyze anything because so much time is spent provisioning reports and answering questions from the field.

The new approach disrupts all of those notions and seeks to engage the "field users" directly. It leverages cutting-edge technology, flexible object models, in-memory processing and one source of analytic data to provide the flexibility, speed, and veracity required to respond to the dynamics of today's market. Implementations are fast (90 days or less) and innovation is frequent due to software as a service.

What are the warning signs for an enterprise that a new approach to analytics is needed?

Any enterprise that is still performing an "annual budget" or a "monthly reforecast" should consider a BA/EPM initiative. The goal of the new approach is to create an environment for rapid, well-informed, and actionable decision making. This cannot happen until a real-time cadence is established.

One of the warning signs that change is needed is simply this: pressure to change, either from the CIO or CFO, or from more grass-roots entities at the edges of the business. People are seeing that real-time data can help them in their daily lives at home, and they want these same experiences at work. Further ancillary warning signs may appear as lost opportunities, declining performance, attrition, and so forth – essentially, an inability to effectively manage the performance of the business.

What does applying business analytics to financial forecasts and management mean for risk management in particular?

The more data you have to analyze, the better decisions you can make -- and this involves using data to do risk-adjusted planning. Think of it as a what-if analysis that leverages real data from inside the company, correlated with data from outside the company (for example, customer sentiment analysis, Web hits, and so forth) to evaluate performance in the context of risks and opportunities.

A retail company might ask: What is the impact to net income if extreme cold continues to keep people at home and out of the store? A company such as Netflix might ask: If everyone is staying indoors because of the cold, do I need to increase server capacity to handle the increased demand on movie downloads? Having an opinion on risk and its impact to the business before it happens can turn a situation into an opportunity.

What are some advantages of BA in the cloud versus an on-premises solution?

I think the world is starting to realize and see the true benefits of the cloud every day, both at home (iCloud, Facebook) and at work (Box,, Workday). These same benefits can be realized with true multi-tenant, software-as-a-service-based BA/EPM solutions. Cloud technologies provide the performance and elasticity required for real-time analytics and allow for automatic flexibility in the number of concurrent users and amount of data processed. This all happens at a fraction of the cost and maintenance of an on-premises environment. Beyond the economies of scale, the pace of innovation, which is essentially the ability to upgrade with zero cost, effort, or time is orders of magnitude faster than with an on-premises solution.

The other cool thing that the cloud enables is community. By that I mean the anonymous analysis of peer-based data for benchmarking purposes. It's similar to how Amazon suggests that you should buy a tripod when you buy a camera. Cloud-based solutions can suggest opportunities for improvement in your business based on comparisons to other like business.

How big is the issue of melding structured and unstructured data for BA, particularly regarding financial analytics? How effectively is that being done?

This is a huge issue, and it relates back to some of the other points I've made here about data from outside the walls of the company. There is so much data being generated outside, in places such as social media, machines, locations, and from customer profile data, that no decision should be made without first assessing all available financial data in the context of the unstructured data. How can you make a properly informed decision about promotions if you aren't assessing feedback from social media (for example, your Web site, Facebook, Twitter, and Yelp)?

Are there ways in which FPM is different from other kinds of performance management? That is, are there particular demands in terms of real-time returns, risk management, and so forth, that aren't found elsewhere in the business?

I believe that FPM requires the same systems and capabilities as any line of business or any area of the enterprise. The analytic processes used across all industries, company sizes, and parts of the organization are largely the same, and thus can be generalized. The data, key performance indicators, and terminology might differ in finance versus sales versus marketing, but at the end of the day, the business users in all lines of business need access to their data (both structured and unstructured) in one place in an intuitive, meaningful way in order to make decisions that drive the business's performance.

Forrester Research recently called Tidemark "a visionary startup looking to disrupt the FPM (Financial Performance Management) category..." Can you tell us more about the company?

Tidemark extends financial planning beyond the CFO's office to the front lines. Over 20 years, Tidemark's team has helped more than 5,000 companies evolve their analytical capabilities. We believe it's time to engage every decision maker with better data, deeper analysis, and a richer experience. Legacy enterprise performance management systems were built for old-style financial planning specialists, quarterly reports, and data silos. That's why we've re-imagined every part of the enterprise analytics stack to deliver unprecedented access to more data in more ways, all with blazingly fast results.

Tidemark extends financial planning, forecasting, and reporting to the whole enterprise, using a powerful platform built from the cloud up, and intuitive enterprise apps designed for mobile first. Business users can answer their own questions and make faster and more informed financial planning and operational decisions. Every enterprise app displays relevant information with full functionality in the context of a business process on both mobile and desktop devices. Tidemark analytics apps help every decision-maker understand why and what's happening and take action.

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