SAP takes on Oracle in performance management space

The vendor gains a boost from Microsoft and already has a rip-and-replace customer win

With an assist from Microsoft, SAP is making a renewed push against Oracle in the EPM (enterprise performance management) space and has a rip-and-replace success story to show for it.

To help plan budgets, make forecast,s and consolidate financial data, CKE Restaurants used Oracle's Hyperion software for 15 years before starting a switch to SAP's BusinessObjects Planning and Consolidation product this year, said CTO Tom Lindblom.

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The 3,000 restaurant chain, which includes brands such as Carl's Jr. and Hardee's, made the change for a combination of reasons, according to Lindblom.

Oracle, which acquired Hyperion in 2007 for $3.3 billion, was taking the product in a direction that seemed "bigger and more comprehensive," but also more complex than CKE desired, he said.

Historically, a core group of financial analysts and financially savvy department managers had used the Hyperion applications.

CKE was collecting financial data by e-mailing out Excel worksheets, a "pretty cumbersome process" it wanted to stop, Lindblom said. "One of our business objectives is to get better at forecasting."

CKE also wished to expand its use of EPM to about 200 more users, including regional managers who oversee about five stores apiece. The SAP product uses an Excel interface, which meant training them wouldn't be a significant issue. "They're business managers, not financial analysts, so the [tool's ease of use] was important," he said.

With SAP's EPM software, CKE will "gain the ability to take much more current data and in essence morph the forecasting process into the budgeting process," he said.

CKE also wants to run what-if scenarios, such as how much a new marketing effort would not only increase overall revenue, but also how profitably.

"One thing we've been focused on is not getting into the price wars," Lindblom said, referring to the "dollar menu" offerings common to other fast food chains. "It may well be that's driving top-line sales, but did you profitably drive those sales?"

Meanwhile, along with a perception that Hyperion was too complex for CKE's needs, the chain was also able to strike a tiered licensing agreement with SAP. Only about 20 of CKE's employees are heavy users of the system, but regional managers will work with it only occasionally. "They're not sitting in an office crunching numbers all day. They're out in the field," he said.

CKE hopes to complete the project early next year.

SAP is hoping to showcase many more customer-win stories in the future, a dream Microsoft may help realize.

In November, the companies announced that Microsoft would back BusinessObjects Planning and Consolidation as "a preferred solution for companies running their business applications on the Microsoft platform." Microsoft will also participate in various marketing initiatives.

The move seemed like a natural fit, given Microsoft had retired its own dedicated EPM product, PerformancePoint Server, earlier this year, and that BusinessObjects Planning & Consolidation uses Microsoft's .NET technology.

In addition, while the companies compete with each other in areas like BI (business intelligence), "they share a much bigger enemy in Oracle," Ovum analyst Madan Sheina said in a recent research note on the partnership.

An Oracle spokeswoman declined comment.

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