Once upon a time Oracle’s Hyperion EPM (Enterprise Performance Management) solution, built on the Essbase platform, was the market leader for everything “FP&A” (Financial Planning & Analysis) from the annual budget to the rolling forecast, profitability analysis and everything in-between.
This is still technically true, but Oracle’s growth has stalled while new up-and-comers are expanding at double-digit rates into the huge untapped market of Excel-only users. Excel’s dominance as the Number One planning tool in the world may finally be under siege.
When Oracle acquired Hyperion in 2007, it made perfect business sense. As one of the world’s largest Enterprise Resource Planning (ERP) software vendors (with SAP), Oracle had thousands of accounting software customers to pitch EPM modules to, like planning and forecasting, workforce planning, capital planning, scenario modeling etc. After all, every company needs to plan.
This history begs two questions:
- Why have the new entrants been able lead companies away from Excel for FP&A when Oracle could not?
- Why has Oracle’s growth stalled in the EPM space?
The answer: innovation and timing
Mainstream adoption of cloud-based SaaS (Software-as-a-Service) applications, which has grown tremendously over the last 5 years, has made a difference. When you buy an application in the cloud, it’s there and ready to use almost immediately. You do not need to buy a server or pay an IT person to maintain operating systems patches. You do not need to install the software or plan to upgrade it.
The cloud also enables innovation. Someone with a good idea, and technical know-how, can create something with much less need for up-front capital investment than in the past by leveraging low-cost computing resources on Microsoft Azure, AWS or a similar platform. Investment is still needed of course – to market the product – but it can be deferred until something compelling has been built and can be demonstrated. The lower barrier to entry induces greater opportunity for more innovators and gives investors more options to choose from, with less risk. This in turn leads to better, and more varied offerings for customers, at competitive prices.
While it is incorrect to state that being on the cloud alone makes products easier to use (the new cloud-based Office 365 version of Excel is no easier to use than my old locally installed version, for example), there is no doubt that the cloud has sped-up the pace of innovation.
In contrast, Oracle’s Cloud EPM offering is essentially just its on-premises product bolted onto the cloud platform. Furthermore, the on-premises product had barely progressed since the 2007 Hyperion acquisition. All Oracle EPM (cloud and on-premise) growth since then has come from having a captive audience of customers of Oracle’s other products. While this made Oracle the market leader in the EPM space, EPM software still makes up but a tiny fraction of Oracle’s overall revenues which may explain the lack of investment in modernization.
It’s time to take stock
If you are an existing Oracle EPM customer this is a great time to stop and think about your performance management data and analytics strategy. What combination of business processes, software tools and analytics culture will best position your organization for future competitive success? Do you want to be like Sears or like Amazon? 😊
From an EPM software tools point of view, there are many more choices than there used to be. Contrary to what Oracle may tell you, none of the major players have any difficulty integrating with the Oracle ERP or HCM solutions. The key considerations are:
Have you looked at IBM recently?
While Oracle has seemingly lost interest in serving the FP&A function with its EPM product, IBM has steadily been investing in its IBM Planning Analytics platform, powered by TM1. As one of the centerpieces of IBM’s Data and AI (artificial intelligence) portfolio, IBM Planning Analytics has benefited from tremendous investment and innovation in recent years, particularly around the user experience and AI-powered predictive analytics.
You should look at IBM Planning Analytics if any of the following are important to you:
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A unified platform for financial, operational and integrated planning that can grow over time |
Infusing AI and predictive analytics into your planning processes |
Flexibility to choose between on-premises or cloud deployments, without compromising on features, security, capabilities or performance |
Compelling enterprise reporting and self-service analytics including dashboards, mobile and rich Excel integration |
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The ability to scale up and support large operational planning models including millions of products and hundreds of thousands of customers (at the same time!), while still being performant |
Powerful business modeling features to support what-if scenario planning including real-time complex calculations (such as allocations, gross margin modeling etc), and fast, configurable scripting |
Secure connectivity to any data sources including Oracle ERP and HFM, as well as third-party data sources in the cloud (like Salesforce or Netsuite) and legacy on-premises applications |
A vendor that is committed to investing in the technology, and to serving the EPM market for the long run |
Next steps:
- Click here to learn about QueBIT’s quick Oracle EPM Conversion Workshop
- Click here to access IBM’s 30-day free trial of IBM Planning Analytics Workspace
