GULP! There Goes Cognos

As Oracle Corp. was attempting to focus the software spotlight on its OpenWorld 2007 show in San Francisco, IBM Corp. stole its thunder by announcing its acquisition of Cognos Inc. for $5 billion in a move to expand its business intelligence (BI) and business performance management (BPM) repertoire.

Cognos becomes the latest in a series of software companies to give into consolidation mania, after swearing independence just as Business Objects did before SAP AG scooped it up last month and Hyperion did before it was bought by Oracle in February. In the end, Cognos CEO Rob Ashe tried to save face: “They made us an offer we couldn’t refuse.” So what else is new?

Now, SAS Institute, the biggest independent enterprise intelligence provider, with $1.9 billion in revenues, is considered by consultants to possibly be the next big software play. But SAS, no surprise, says differently. “We will not be sold,” says Gaurev Verma, SAS global marketing manager for the enterprise intelligence area that combines BI, data field integration and data quality and predictive analytics tools. He notes that as an independent, it can pour 24% of its revenues back into research and development. SAS remains a major partner with IBM to provide predictive, forecasting, modeling and optimization tools to create complete solutions, and has also worked with SAP.

This is IBM’s 23rd acquisition to support its information-on-demand strategy. With Cognos, IBM also gets Applix technology, which Cognos acquired earlier this year. IBM is not alone in building its BI and BPM suites. Oracle purchased Hyperion. And Cartesis and ALG Software were bought by Business Objects, which in turn is now being acquired by SAP.

"Customers are demanding complete solutions, not piece parts, to enable real-time decision making," says Steve Mills, senior vice president and group executive, IBM software group. "Our broad set of capabilities-from data warehousing to information integration and analytics-together with Cognos, position us well for the changing business intelligence and performance management industry.”

That’s not to say customers wont’ still have options. The complicated relationships among all the big vendors appear to be keeping the BI and BPM choices open. For instance, even as IBM was talking to Cognos in October about buying the company, it announced a partnership with Business Objects, which will soon be owned by SAP and is a top competitor of Cognos’. Business Objects will distribute and resell IBM DB2 Warehouse with Business Objects XI and CFO Performance Management software, and IBM will distribute a limited license of Business Objects XI with DB2 databases and warehouses.

Much of the IBM/Cognos news has focused on the BI technology Cognos brings to the table, but for finance executives it will be the analytics and business performance management that will ultimately matter most. The rise of analytics, combined with data integration and BI reporting, are leading companies in all industries to seek more complex analytical software, says Verma. “More than reports that tell them what happened last year, last month or last Tuesday, they need to see around corners and know what will happen next—next Tuesday, next month, next year,” SAS said in a statement.

The business analytics software field is big business. According to IDC, the market reached $19.3 billion in 2006, representing a growth rate of 11.2%. The authors expect the worldwide business analytics software market to continue to grow at a compound annual growth rate of 10.3% over the next five years.

Is the pain of the SOX 404 audit behind us?

Five years after the Sarbanes-Oxley Act took effect, about one-fourth of internal audit managers surveyed by Protiviti Inc. say they have comfortably moved SOX concerns to the back burner as they refocus on traditional responsibilities. That’s more than double the percentage responding to a similar Protiviti survey in 2005, indicating companies increasingly are satisfied with their compliance operations and ready to return to the basics, explains Bob Hirth, managing director and head of Protiviti’s internal audit group.

“This is the fourth year for most accelerated filers, and they are putting SOX into a better perspective,” says Hirth. This should be especially true, he says, in light of the release of Auditing Standard 5 (AS5), which clarifies the rules. The Protiviti survey was conducted before the Public Company Accounting Oversight Board (PCAOB) introduced AS5. “Companies clearly are seeing the long-term benefits of rebalancing, which includes ensuring they do not focus solely on financial reporting at the expense of other critical business operations and functions,” says Hirth.

People on the Move

H&R Block, the $4 billion provider of tax, financial, accounting and business consulting services and products, based in Kansas City, Mo., has named Becky S. Shulman, senior vice president and treasurer, as interim CFO. Shulman, 43, replaces William L. Trubeck, who resigned as executive vice president and CFO. Trubeck will stay with the company through the end of the year as a consultant, to help smooth the transition. Shulman joined H&R Block in six years ago as vice president and treasurer, and was promoted to senior vice president in 2006. Before coming to H&R, she was chief investment officer of U.S. Central Credit from 1998 to 2001.

The $87 billion provider of products and services for the healthcare industry, with headquarters in Dublin, Ohio, appointed CFO Jeffrey W. Henderson to the added position of interim CEO, following the resignation of Mark W. Parrish. Henderson, 42, joined Cardinal Health in 2005 from Eli Lilly Canada Inc., where he was president and general manager. Henderson came to Eli Lilly Canada as vice president and corporate treasurer, and later served as corporate controller. Prior to joining the company in 1998, Henderson held numerous international management positions with General Motors Corp.

Applebee’s International Inc., the $1.3 billion causal-dining chain, with headquarters in Overland Park, Kan., has announced the resignation of Steven K. Lumpkin, who was CFO, treasurer and director. Lumpkin, 52, began his career 30 years ago at Price Waterhouse LLP, where, for 12 years, he was a management consulting partner and CPA. In 1990, he joined Kimberly Quality Care, a division of Oltsen Corp., as executive vice president and a member of the board of directors, serving until 1993, when he became senior vice president of Kimberly Quality Care. Lumpkin came to Applebee’s in May 1995 as vice president of administration, and by January of the next year was promoted to senior vice president. In November 1997, the company named him senior vice president of strategic development, and a little more than a year later, he was promoted again to executive vice president. In 2001, Lumpkin was appointed chief development officer; he became CFO and treasurer the following year.

JetBlue Airways Corp., the $2.4 billion New York-based airline, has named Ed Barnes, interim CFO. Barnes, 42, replaces John Harvey, who has resigned to pursue other interests. Barnes joined JetBlue in 2006 as vice president of finance and accepted the additional role of principal accounting officer earlier this year. Last month, he was named senior vice president of finance. Previously, Barnes held a numerous of senior financial leadership roles in various industries, including working as vice president and controller of The Leisure Co., a subsidiary of America West Airlines Inc.

The New York-based airline has promoted assistant controller Don Daniels to vice president and controller. Daniels came to JetBlue in 2002 as director, and was later named assistant controller. Prior to arriving at JetBlue, he spent four years in the financial division of Delta Air Lines Inc. and spent five years in accounting at Deloitte & Touche.

Hanover Insurance Group Inc., the $2.6 billion holding company, with headquarters in Worcester, Mass. has appointed Robert P. Myron director of corporate finance and treasurer. Myron, 39, joins Hanover after serving as executive vice president, CFO and treasurer for Argo Group International Holdings Ltd. He also served in the same capacity at PXRE Group Ltd. Prior to that, Myron, was president of Select Reinsurance, and he held management positions in audit and business advisory services for PricewaterhouseCoopers.

FTI Consulting Inc., the $708 million business advisory firm, with headquarters in Baltimore, named Jorge Celaya, executive vice president and CFO. Celaya, 41, succeeds Theodore Pincus, who retired at the end of the third quarter. Celaya served as co-CFO with Pincus since July. Prior to joining FTI, Celaya served as executive vice president and CFO of Sitel Corp. for four years, and before that, he was CFO of NPTest, Inc., a spin-off of Schlumberger Ltd. Celaya joined Schlumberger in 1990 and held a variety of operations and corporate finance management positions there.

The Baltimore-based consulting company has named Catherine Freemen senior vice president, controller and chief accounting officer. Freeman, 51, succeeds Charles Boryenance, who has retired. From April 2004 to July of last year, Freeman served as vice president and corporate controller. Since July 2007 she has assumed the role of vice president and deputy CFO of AES Corp. Prior to working at AES, she spent three years as vice president and corporate controller of World Kitchen Inc., and from 1983 to March 2001, held various finance and accounting positions with Fort James Corp.

Compliance tool offers ERM and operational risk components.

Paisley has introduced an updated system for its flagship governance, risk and compliance (GRC) product for enterprise systems users. Version 3.5 of Paisley Enterprise GRC offers enhanced compliance management, risk assessment and compliance reporting, in addition to better graphical workflow modeling capabilities, according to Tim Welu, CEO of the Minneapolis software company.

Paisley says version 3.5 can help streamline compliance functions for both internal and external regulatory requirements. Features include profiles for enterprise risk management (ERM), general compliance, financial controls in internal audit, operational risk management (ORM) and IT governance.

Moreover, the company says, businesses can identify enterprise risks and link them to their operational processes and controls by using key performance indicators, key risk indicators and heat maps.

The latest version will be available for either on-site installation or as a hosted application deployment in about three weeks.

Is your treasury best in class or just keeping up?

 Thanks to a joint venture of IBM, the Association for Financial Professionals (AFP) and Deutsche Bank, treasurers may soon to be able to answer that question—with metrics to prove it. In response to demand from finance professionals, the three have launched a multi-year benchmarking study of treasury practices—Deutsche providing the underwriting, IBM providing the consulting expertise and AFP supplying its membership base as potential participants.

Among the key topic areas and metrics that the survey will measure and delineate: treasury policies and procedures; management of cash, debt and financial risks; the degree of systems integration; statistics on full-time equivalents; and the number of relationship banks. All corporate financial professionals may participate at no cost and then will be provided with a customized benchmark report that compares companies to relevant peer groups. The results of the first year’s survey will be made public at AFP’s annual conference in October 2008.

To get T&E compliance, the key is to make it easy.

Concur has launched a new product that automates travel planning and expense reporting, from the booking of the trip to the completed expense report. Its new product, Concur Travel & Expense One Touch Business Travel, provides a single, seamless, on-demand service that the employee spend management company says, reduces the number of steps, clicks and paper required by traditional business trip planning and reporting process.

One Concur customer—Michael Ciaccio, travel and expense manager for RiskMetrics Group—says the new offering has enormous potential. “We are excited to finally have one seamless end-to-end travel and expense management process,” Ciaccio says. “And we look forward to the impact on our employees’ productivity and ability to focus on our business needs rather than internal processes.”