Are You Data Rich but Starving for Information?

Technology has made significant promises and much of the productivity gains in the past decade can be attributed to the wide adoption of cell phones, e-mail, fax machines, and the internet. But not all technology results in wide adoption nor tangible business value by generating top line growth, bottom line profits, or improved customer satisfaction.

As more and more companies strive to do more with fewer resources, choosing the right IT solution becomes very important. Anyone that has rolled out a project or been a user of new technologies can recount numerous stories of the bumps in the road. Many executives are very sensitive to investing only in technology projects that can be linked directly to driving business results. Business Management recently caught up with Paul Barber, President of PROPHIX Software – a company in the middle of all these changes – to discover his perspective on how these changes and pressures are affecting both customers and competitors.

BM. How can organizations of all sizes use technology to drive business results?
PB. Technology must enable the linking of strategic objectives with operational execution. Typically there are only four or five key drivers and leverage points that dramatically impact results – knowing what they are and having the right data at the right time to seize opportunities or make adjustments is critical. Technology can provide those timely insights. However, in many organizations, IT is a cost to be managed and is not leveraged as a strategic partner with the other lines of business to accomplish the organization’s goals.

BM. Significant amounts of money were spent leading up to Y2K, but many CEOs are skeptical of the return on that investment since very little new functionality was added. How does PROPHIX Software deliver tangible ROI?
PB. Executives have every right to expect a return on their investment for any asset they acquire. With intangibles such as software, it’s difficult but not impossible to identify tangible value, and in many cases, cost savings can be clearly identified and measured. Time savings allow people to work on other projects that they haven’t been able to get to, and our customers tell us that they’ve seen payback from using our software of weeks to months.

BM. Would you agree that integrating with the existing systems is a key requirement as new technologies are introduced into the organization?
PB. It’s vital and we need to preserve the investments an organization has made in the implementation, training, etc. of their current systems in order to minimize the disruption to the organization. Unfortunately, functionality gaps do exist. For example, many systems are very effective at capturing transactional data, but lack the necessary reporting and/or ability to present data to effectively analyze that data. Extending the life of existing software systems is something PROPHIX does well. We add new capabilities with a familiar user interface and this enables users to spend more time doing their job.

BM. IT departments seem to be overwhelmed these days. How does your system impact the applications backlog they face?
PB. We complement the efforts of the IT department. They are typically concerned with architectural standards, data security and up-time of mission critical systems; however, the user requirement must always be the top priority. PROPHIX requires little IT involvement. Historically new applications have been massive projects taking months or even years to complete, but to be responsive in the marketplace software must be utilized quickly. This means that little or no IT involvement should be required to begin to take advantage of new technologies. For example, we’ve seen complete budgeting/planning, reporting and forecasting systems fully deployed in only two weeks.

BM. So how does a forecasting system help drive business results?
PB. Having visibility and insight allows managers to make informed rather than intuitive decisions. What-if scenarios allow you to see the impact of possible outcomes. For example, crude oil prices have been very volatile recently, so if oil is a key raw material in your operations, understanding the implications on product line decisions are critical. Periodic re-forecasting on a quarterly or monthly basis can help you understand the impact on earnings, the balance sheet, cash flows and personnel. Credibility suffers when you just use the ‘once a year budgeting’ approach, because as progress and change occur throughout the year, such as oil price increases, the entire budget or plan has less validity.

BM. There have been several significant acquisitions in the enterprise application and performance management software industry recently, what is the impact of all this consolidation?
PB. One obvious impact is that customers will have fewer suppliers to choose from. Among the reasons for making an acquisition is to plug the functional gaps in your product line. In the ERP space, the consolidation has relatively no impact on PROPHIX since we work with all the software packages, and we actually help companies as they move from obsolete to newer technologies.

BM. Decisions typically involve input from other departments, how does software facilitate departmental communications?
PB. Every company’s processes are slightly different and they have different philosophies when it comes to budgeting and planning. We support top-down, bottom-up, zero-based and activity-based methods. By leveraging workflow, collaboration between departments regardless of where in the world they are located is possible. Since everyone has had the opportunity to contribute, there is greater ownership of ‘the numbers’. Everyone can be kept up to date by exposing the impact of those decisions, which improves communications and understanding from the shop floor to the executive suite.

BM. How does your software address the needs of global companies?
PB. A company, even in its domestic market, is likely to be sourcing internationally, and currency volatility can have a significant impact on profitability. We address the needs of most global operations by helping them to manage their foreign exchange requirements, working with multiple currencies and providing native multilingual support.

BM. Many organizations have been budgeting for years, so what are innovative companies doing with your software that keeps them ahead of their competition?
PB. Budgeting is typically a once a year event to determine where to allocate corporate resources, however, planning is an ongoing process to track progress along the way. Planning does not have a beginning or an end. We’re seeing organizations do quarterly or monthly planning, enabling them to understand the impact of their decisions. Most companies can’t tell you which product lines or customers are most profitable. Software like PROPHIX allows you to go deeper – to drill down to the cost center level or even to the machine level. Our customers use PROPHIX to run multiple what-if scenarios on financial and non-financial data such as inventory, sales forecasting, and personnel data.

BM. What distinguished PROPHIX Software from the competition?
PB. It’s all about delivering tangible value; we deliver that from day one – in many cases, before we leave the customer’s offices. This is possible due to our people, because we are, first and foremost, business people rather than technology implementers. We understand your business, goals and objectives and, along with our extensive experience and expertise, rapidly deliver a functional system, usually in a matter of weeks. You don’t need an army of consultants to implement PROPHIX. The implementation time is shorter and the risk is lower.

BM. Which industries are best suited for the types of applications PROPHIX offers?
PB. Every business needs a telephone, similarly every business needs access to their data. Business people across all industries want to make better decisions, and that’s what we offer them. Manufacturers, service companies, governments are drowning in data yet starving for knowledge; we satisfy the requirements of all industries.

BM. CPM/BPM and scorecarding seem to be the flavor of the day – is there any substance behind it? What further changes can we expect in the BPM/CPM space?
PB. Transactional systems can tell you what has historically happened but they don’t necessarily give you insight into what you should do in the future. Getting data out of your operational systems and delivering it in a usable form allows users to spend more time analyzing rather then compiling it.

There will undoubtedly be changes in the future; the most recent example of Business Objects buying SRC is only the beginning. ERP vendors are now starting to realize the true value of CPM software, and I’m sure they would like to incorporate scorecarding, for example, as part of their offering.

BM. And what will it mean for a company such as yours?
PB. From a PROPHIX Software point of view, we will continue to focus on providing the best financial planning, reporting, budgeting and forecasting solution to our customers. We already work with many ERP vendors, and will deliver the solutions that our customers ask us for. For example, we build on open standards, which many potential partners and customers seek since it means simpler integration, lower risk and fewer headaches.

BM. Does that mean that customers should invest more in the performance management instead of enterprise application systems? Where should a company start?
PB. These systems go hand in hand really. Performance management systems extend the life of the ERP, CRM and HRM systems. They take the transactions and data, and put them in a form where managers can really analyze the data.

Who is PROPHIX Software?
For over 15 years, PROPHIX has been a leader in delivering data analysis solutions, including budgeting, reporting, forecasting, planning, consolidation and personnel planning. We have customers of all sizes, in many industries, all over the world. Our best customers are those that get the most value out of their investment, the ones that focus on their core competencies and leverage technology effectively.

What is PROPHIX Software’s vision?
PROPHIX enables organizations to take control over their key business objectives and goals. Informed business decisions are possible when the right people have the right data, at the right time.

Paul Barber, President
Paul Barber is President of PROPHIX Software. He obtained an MA in Mathematics from Cambridge University and has worked in the computer industry for over twenty years. He also has an MBA from the University of Western Ontario. Paul has developed considerable expertise in Decision Support Systems, Executive Information Systems and Planning Systems. During his career, he has gained wide experience in software sales, marketing, applications, and general management.