Cognos sharpens focus on performance management to meet compliance demands

Cognos' acquisition of Frango turns spotlight on financial reporting aids

Software supplier Cognos continues to augment its corporate performance management strategy with the acquisition of financial reporting specialist Frango.

The deal (a cash transaction of about £29.6m) slots another technology piece into the supplier’s continually developing corporate performance management puzzle. The Frango purchase follows the £87m acquisition of enterprise planning specialist Adaytum, back in early 2003, which marked Cognos’ move away from pure business intelligence to corporate performance management - essentially the blending of business intelligence and planning/budgeting techniques.

The term "corporate performance management" has been born out of the need to marry business intelligence techniques with the management of core operational activities in the enterprise.

To view corporate performance management as a subset of business intelligence is to miss an important point: it blends business intelligence with elements of planning, budgeting, business performance management and real-time monitoring.

The goal is to achieve a series of views of business performance across operational activities and departments to create a link between the strategy of the business and the execution of that strategy.

In acquiring Frango, Cognos is clearly honing in on the chief financial officer with its corporate performance management message.

However, as financial considerations are a vital aspect of performance (and hence corporate performance management) they are not the be all and end all. Performance is not black and white and businesses need to be able to blend different aspects of performance.

True corporate performance management should be able to balance a financial view with an operational view. Take a particular product line within a company as an example. The CFO will view performance in financial terms – how profitable one particular line is compared to others.

A brand manager will look at customer response and satisfaction for his or her view of performance and the plant manager will be looking at batch quality and reject levels to get a feel for performance.

One of the principal drivers for corporate performance management is the way it can assist organisations with compliance. Corporate performance management is able to support the transparency of process that is an essential part of a compliance strategy and it also forces organisations to examine critical related issues such as data quality, accuracy, retention and accountability.

In this regard, financial reporting is one of the highest profile aspects of compliance, which again helps to explain Cognos’ move for Frango.

Ian Charlesworth is a senior research analyst at Butler Group

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