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Many of you in the Enterprise Performance Management (EPM) space immediately recognize the name Cartesis, regardless of whether you’re an actual customer.  Before I dive into the nitty gritty about the positives and negatives of Cartesis, though, I’ll dive into a little of the history for those of you unfamiliar with the name.

A French company, Cartesis developed a product eventually renamed from Magnitude to Cartesis Finance.  Cartesis Finance, the company’s flagship offering, was at the time (and using the company’s words) “the only fully integrated, web-based solution for enterprise performance management.” 

Cartesis’ unique integrated data model supported the key financial management activities – planning, budgeting, forecasting, statutory consolidation, management reporting and performance management (see Figure).  While the Cartesis Finance product was sold widely, including in the UK and US, with around 700-800 customers, a large percentage of customers were in France.

Figure 1 – Cartesis Suite Diagram & Integrated Data Model

Cast your minds back to 2007.  At the time, significant “consolidation” occurred among EPM vendors.  Oracle acquired Hyperion early in the year.  Business Objects announced the acquisition of Cartesis the following month, and then SAP rushed to acquire OutlookSoft.

SAP went a step further in late 2007 and acquired Business Objects.  This acquisition resulted in SAP owning multiple EPM solutions.  While Cartesis Finance became SAP Business Objects Financial Close (BOFC), it was later renamed simply to SAP BFC.

Now that you know the history, I’ll dive into the positives and negatives of Cartesis/SAP BFC.

Cartesis/SAP BFC – The Positives

Cartesis Finance (previously Magnitude) was designed in France, a country known for having the most complex accounting and reporting rules in the world.  Cartesis began as an internal project in the global French company Vivendi and was subsequently spun out into an independent company.  The team therefore focused on the complexity of both global companies and the French accounting rules, targeting primarily the largest French companies and those in the CAC-40, France’s principal stock market index.  The resulting solution was technically strong and could handle almost any challenge.

In Cartesis’ words, “Our powerful technology handles the complex but essential task of unifying information, people and processes in a single data model that can be applied easily and consistently across your company’s business.”

Below are the sweet spots for Cartesis’ product:

Cartesis/SAP BFC also natively supported the elimination of inter-segment trading within a single legal entity with multiple business segments.  Again, this feature intentionally supported only the largest, most complex consolidations.

In Cartesis/SAP BFC, all journal entry data was analyzed by a specific dimension dedicated to tracking journals, called “journal entry number.” Consequently, reports could be built that retrieved the detail of a specific amount based on the journal entry header.  This type of report was extremely useful in determining how an amount is built up from the input level to the consolidated position – especially if multiple manual journal entries had been posted to the same account.

In sum, Cartesis/SAP BFC was much more capable than peer platforms at supporting several reporting cycles with differing analyses.  The solution evolved to support the complex statutory consolidation requirements in the business models of the largest organizations.  This evolution, however, was to the detriment of other requirements (e.g., budgeting, forecasting and cost & profitability requirements) – and the negatives of Cartesis didn’t end there.

Cartesis/SAP BFC – The Negatives

As alluded above, the evolution of Cartesis/SAP BFC continued a complex statutory consolidation trajectory.   This trajectory eventually contributed to some challenges when other more comprehensive EPM technology suites appeared on the market that offered planning & budgeting capabilities or more advanced analytics.  

Another major issue was the technical architecture of Cartesis/SAP BFC.  The relational database design was complex, and SAP would eventually choose not to make the application available on HANA, creating an uncertain future where the product would only be supported for a set number of years.

Despite being a popular application, Cartesis/SAP BFC has the following recognized limitations:

In the positives, I mentioned the tight control over the data collection/entry environment.  Many users, however, found this control to be a negative over time.  Why?  Well, for data entry in Cartesis/SAP BFC, each specific data entry point had to be explicitly opened during the development phase.  By default, all intersecting data points were blocked for data entry or importation.  During implementation, the development team must then open each individual data point or ranges of data points.  As you can imagine, this process caused delays and frustrations when new intersections needed to be opened.

The intuitive workflows that many users today are familiar with were not a feature of Cartesis/SAP BFC.  Data submitted to Cartesis/SAP BFC had to follow a pre-defined process of being entered into a data entry environment known as the “package layer.”  Once submitted to a package, data had to be validated, published and integrated.  Publishing a package was the equivalent of stating the data within the package was available for review.  Any amount not integrated (data would physically be copied to a pre-consolidated level) would not be selected by the consolidation.  No deviation from this cumbersome submission process was allowed, which frustrated many users.

Finally, intercompany reconciliation/matching at balance and transaction was only available with a separate web-based tool called “Intercompany Server from Cartesis,” since re-branded to SAP Intercompany.  Using the tool required manual data transfers to and from the actual data source.

SAP EPM – The Options for Cartesis/SAP BFC Customers

Many organizations are facing the end of support for their Cartesis/SAP BFC application, announced for 2027.  Many customers will be forced to implement SAP S/4 HANA.  Both those customers and those using other SAP Legacy EPM Systems for Consolidation and/or FP&A face high risks in following the SAP Strategy with Group Reporting and Analytics.

SAP’s vision for EPM is based on a combination of the new Group Reporting product for consolidations and SAP Analytics Cloud (SAC) for planning and budgeting.  SAP Group Reporting and Analytics Cloud for Planning requires that customers move to S/4 HANA Cloud for their ERP.  

To give customers enough time to transition to SAP S/4HANA for group reporting, SAP decided the following:

Those decisions leave customers at risk.  So if your organization uses Cartesis/SAP BFC, you have three choices:

To learn about those alternate strategies, make sure to tune in for our next blog in this series, in which we’ll examine the choices in more detail.

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Ready to join the organizations that have taken the step from Cartesis/SAP BFC to OneStream?  Check out our video here, and be sure to visit our website.

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With an ever-increasing requirement from the financial markets to have better transparency into Environmental Social & Governance (ESG)/Sustainability initiatives, enterprises must collect, measure and publish non-financial information on ESG-related risks and opportunities to attract or retain investors.  ESG goes beyond a simple collection exercise of new KPIs.  In fact, much like the current external financial disclosures produced today, ESG reporting is becoming a key investment criterion.  This criterion elevates the conversations from “just” reporting KPIs to instead developing an ESG investment strategy designed to respond to market expectations. For the past few years, OneStream Software has sponsored Hanover Research surveys of Finance executives to gain a better understanding of how they are helping their organizations navigate the complexities of today’s economic landscape.  The Q4 2022 Hanover Research survey included over 650 financial decision-makers and aimed to understand their expectations for 2023 regarding inflation, a potential recession, supply chain disruptions, talent management, ESG and DEI initiatives, and technology investments.  Keep reading to learn the results of the most recent survey on ESG initiatives. 

ESG Initiatives Still in Focus

With ESG reporting guidelines converging and new mandatory disclosure requirements being proposed by the US SEC and regulators in other countries, investments in ESG remain a priority.  Half of organizations surveyed expect to invest more in ESG goals and initiatives in 2023 than in 2022.  The percentage is a slight drop compared to expectations from the Spring 2022 survey (60%).  However, over a third of enterprises expect to invest the same amount in ESG in 2023 (39%) (see Figure 1). 

ESG Investment Plans. 48% will be investing more in ESG initiatives next year.
Figure 1 – DEI and ESG Investment Plans

Regarding plans to prepare for changing ESG reporting requirements, just under half of financial executives surveyed have already started or plan to start forming an internal ESG/Sustainability team to define policies and disclosures.  A similar proportion (41%) will begin (or have already begun) implementing new ESG/sustainability policies.  Compared to the Spring 2022 survey, fewer are planning to invest in software to support ESG data collection and reporting.  Among those who currently don’t have a plan in place, half (50%) indicate they may implement a plan if ESG reporting mandates impact their organizations (see Figure 2). 

Preparations for ESG Change. 35% plan to invest in software to support the collection and reporting of ESG data.
Figure 2 – Preparations for ESG Reporting Changes

Organizational views of and financial leaders’ involvement in ESG initiatives vary, based on the survey.  Only a quarter (23%) view ESG as being core to the organizational mission.  Meanwhile, almost one-third view ESG as either a way to proactively communicate initiatives to investors and stakeholders (29%) or a compliance requirement (28%). 

Although Finance/Accounting departments are most commonly responsible for ESG initiatives and reporting, this assignment of responsibility is still only the case for about two in five businesses (37%).  Similarly, less than half (43%) of the financial leaders themselves are highly involved in managing the ESG process or practices (see Figure 3). 

Organizational View of ESG. Finance/Accounting has primary responsibility for ESG initiatives and reporting at 37% of organizations and 43% of financial leaders are highly involved in managing the ESG process.
Figure 3 – Organizational Views of ESG Initiatives

When financial decision-makers were asked about what type of software is currently being used or planned to be used to support ESG reporting, extensions of CPM software were reported as the most cited software for supporting the collection and reporting of ESG data.  Extensions of ERP systems and purpose-built ESG reporting tools are also both cited by half of organizations (49% each) (see Figure 4). 

ESG Data Collection and Reporting Software: Extensions of CPM software were reported as the most cited software for supporting the collection and reporting of ESG data.
Figure 4 – ESG Data Collection and Reporting Software

Summary

The mandatory ESG disclosures being proposed by the US SEC & European Union are driving many organizations to invest in their ESG processes and software.  Those investments will help with not only reporting compliance, but also planning and managing ESG initiatives.    And there’s more good news – today’s cloud-based CPM and analytical software technologies are seeing increased adoption and proving their worth.  How?  By helping Finance teams become more efficient effectively plan and navigate the volatile economic landscape, which increases Finance’s agility to respond. 

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To learn more, read the detailed survey report and visit our website at www.onestream.com.  Need help conquering the complexities of ESG reporting in the current economic landscape?  Contact OneStream today!

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Effective budgeting and planning are crucial for the success of any organization, and higher education institutions are no exception.  This reality is particularly true as Finance teams of higher education institutions focus on improving their planning, budgeting and forecasting processes while navigating current trends.  Such trends can include staffing issues, changing enrollment demographics and highly demanding board members.

However, the variety of entities within these institutions and the distributed nature of those entities pose a challenge to effectively managing budgets and plans.  To manage both, higher education Finance teams must successfully accommodate the varied requirements of each entity within the organization and the requirements of the combined organization.

The Challenges of Institution Complexity and Variety

How do some of the challenges of institution complexity and variety manifest?  To illustrate, we’ll look at the following three fictional individuals responsible for distinct aspects of a large higher education institution’s financial and operations management:

As the CFO, Sandeep provides reporting to the institution’s stakeholders (e.g., board of directors) to give them a comprehensive, holistic view of institutional finances and operations. To deliver this reporting and ensure that the institution’s financial goals and objectives are met, he requires visibility into the financial operations of all departments, including Housing and the Bookstore.

To manage the Housing’s financial operations, including budgeting and forecasting, Kyle requires visibility into occupancy rates, housing expenses and revenue streams.  That visibility helps with making informed decisions and ensuring the housing operations remain financially sustainable.

While Stephanie’s budgeting and forecasting responsibilities resemble Kyle’s, her requirements are naturally different since she manages revenue streams and expenses related to the Bookstore.  Stephanie requires visibility into inventory levels, pricing strategies and multiple revenue streams.  That visibility helps with making informed decisions and ensuring the Bookstore operations remain financially sustainable.

But just how different are the reporting needs for Sandeep, Stephanic and Kyle?  Well, we can see a simple example by looking at the chart of accounts dimension (see Figure 1).

At the institution level, Sandeep tracks revenue for both Housing and the Bookstore in a single account, Auxiliary Enterprise Revenue, which falls under Institution Revenue.  Kyle tracks Housing revenue in separate accounts, including Room Revenue and Board Revenue.  And finally, Stephanie tracks revenue for the Bookstore with accounts for Textbook Sales and Merchandise Sales.

Figure 1:  Example Higher Education Institution Revenue Accounts

This situation gets even more complicated because Stephanie needs to budget more granularly than Kyle.  She reports revenue for textbook sales overall, but to plan properly, she must separately account for new and used textbook sales (see Figure 2).

Figure 2:  Example Bookstore Actuals versus Budget Granularity

Visualizing all these dynamics on paper is easy enough, so what makes managing everything so difficult? Well, many higher education institutions are limited by spreadsheets or legacy finance tools in how they can present dimensions such as the chart of accounts to the various users in the organization. These tools only provide a single chart of accounts across all entities and cannot accommodate different granularity needs for budgeting and planning at the entity level.

As a result, when Kyle looks at the chart of accounts, he sees a lengthy list of all revenue accounts for every institution entity. In the simple example above, when working within his legacy tool, he will see his Housing revenue accounts cluttered with the Bookstore accounts.

Stephanie will have the same crowded list of accounts in her system.  But adding to her frustration, she will not be able to plan within the legacy system at the level the Bookstore requires.  Instead, she will need a separate tool or, most typically, will resort to siloed spreadsheets to plan at the required lower level of granularity.

Of course, these variations become much more complex given all the possible variations in dimensionality across these two entities – not to mention across all the other entities within the institution.  Those entities can include medical centers, different colleges, research facilities and more.

How do many Finance teams and entity managers work around these legacy limitations?  Typically, a patchwork approach develops with separate systems and stand-alone spreadsheets to accommodate requirements.  And just as typically, this patchwork approach leads to abundant headaches for the Finance team as they must now waste time wrangling disconnected data to provide comprehensive financial reporting, planning, budgeting and forecasting. The above situation is untenable.  Risks, costs and performance issues abound when using extensive manual processes and patchwork connections between financial systems and spreadsheet silos.  Further, the massive effort higher education Finance teams expend managing these processes robs Finance of the opportunity to focus on providing financial insight and institutional decision guidance.

Conquering Complexity for Higher Education Finance Teams

At OneStream, we understand the complexities, frustrations and struggles involved when trying to accurately manage disconnected information.  And that understanding is exactly why we built the OneStream Intelligent Finance Platform (see Figure 3).  The platform has the capability to gracefully support and enforce institution standards and controls, but also support the more detailed requirements of individual units.  How is this possible?

Figure 3.  OneStream’s Intelligent Finance Platform

Well, the secret sauce for helping Finance teams meet the demands of diverse units while supporting institutional standards is Extensible Dimensionality®.  This unique capability enables a higher education institution to leverage the same dimension for differing requirements – without having to create separate connected Finance applications.

And it’s only possible with OneStream. So, with OneStream, Kyle will only see the Housing accounts and Stephanie only the Bookstore accounts.  In addition, Stephanie can plan at the lower granular level of detail the Bookstore requires.  To both Kyle and Stephanie, OneStream feels like it was set up just for them.  And Sandeep and his team can see the complete picture without having to manage manual processes to combine the data from separate entities.  As a unified solution, the OneStream platform empowers higher education Finance and Operations teams to collaborate by creating a single source of truth and user experience for planning, financial close & consolidation, and reporting and analytics.

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Extensible Dimensionality® is just one reason higher education Finance teams are turning to OneStream to conquer complexity in their financial processes.  Click here to learn how one large state university modernized Finance with OneStream to reduce budget completion and reporting times.

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Conquering Supply Chain Disruptions

Prior to the supply chain disruptions of recent years, Polaris Inc., a leading provider of powersports equipment, forecasted production and shipments based on innovation and market demand. However, since these disruptions occurred, the business environment became constrained by supply. Recognizing a need for more speed and agility across planning processes, the Polaris Finance team turned to the power of OneStream’s Sensible Machine Learning (Sensible ML) solution to assist with demand forecasting.
In previous years, Polaris’ business units had relied on a highly manual financial planning model with inputs such as SIOP-generated shipped unit forecasts by product, product costs and MSRPs, freight cost, and dealer discounts to arrive at a gross margin view. This model was referred to as the “Driver-Based Revenue Model,” and it provided the perfect opportunity to incorporate machine learning-driven forecasting and transition to a unified planning process within OneStream.

Putting Sensible ML to the Test

Polaris decided to focus their Sensible ML project on their North American Off-Road Products GBU, looking at a 12-month forecasting time horizon with a focus on variables impacting their Shipped Units forecast. These variables included Commodity Prices, Presold Orders, “Clean Build” Percentage and Build-to-Ship Durations. Historic data representing these variables would be combined with historic shipped units to generate the ML models and their forward-looking forecasts.

Polaris Industries ATVs on rocky lake shore

The historic data model covered 181 products, with weekly units sold from 2016 through 2022. Sensible ML crunched through this data, combined with commodity prices for steel and aluminum, factored in events such as holidays, and generated over 2,800 models for comparison. The OneStream ML models proved to be the most accurate, based on the historic data. The ML forecasts were run monthly and were incorporated into a driver-based forecast.

Faster, More Accurate Forecasts and More

The results were impressive. Not only were the forecasts more accurate than with prior approaches, but with Sensible ML, Polaris added speed and efficiency to their forecasting processes, reducing forecasting cycles from days to hours. Polaris also now has more transparency into what’s behind the ML models, including insights into the key forecast drivers for more informed decision-making.

It provides a finance-run ML forecasting process that integrates seamlessly across planning and forecasting processes in the same user experience used for financial close and consolidations, account reconciliations and reporting.    

“The ability to quickly generate driver-based forecasts is essential to adapting to our changing business conditions,” said Melanie Hermann, Director, Finance Process & Systems at Polaris Industries. “Incorporating AI into our planning and forecasting through the OneStream Sensible ML solution accelerates the forecasting process and further elevates it with powerful ML data-driven forecasts. Sensible ML forecasts have shown to be more accurate, and the Value-Add Dashboard provides the business users with insights into the key features driving the forecast to easily manage, improve and enhance the model.”

The Polaris Data Science team was impressed with the process and results. “Sensible ML commoditizes the part of my job that can be commoditized and allows me to focus on where I can add value… with the output that Sensible ML provides,” said Luke Bunge, Manager Data Science Product. “It’s an incredible timesaver and gets you to the best answer possible. The team did a great job immersing us in the tool…as opposed to turning it into a black box.”

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For companies across fast-changing industries such as CPG manufacturing, retail and hospitality, Sensible ML reduces the traditional barriers to ML forecasting and improves both the speed and accuracy of demand planning.   This enables organizations to fine-tune production plans, optimize inventories as well as reduce volatility and fluctuations in labor planning.

To lean more, download the Polaris Inc. case study and contact OneStream if you are ready to learn how your organization can take advantage of the power of machine learning. 

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Last February, we held our first annual Partner Appreciation Month to celebrate and spotlight all the great achievements within our partner community. Based off its success, I’m happy to announce we will be hosting our second annual Partner Appreciation Month!

At OneStream, we firmly believe that it takes a village in all that we do and accomplish. And our village would not be complete without our partner network, which now encompasses over 240 partners around the globe. The role each partner plays in helping us attract and sell to prospects and customers, implement our Intelligent Finance platform, as well as provide stellar customer service is invaluable and a continuation of our mission and vision to be the operation system for the modern business.

Incentives During Partner Appreciation Month

Throughout the month, we will celebrate our partners’ many contributions and achievements with great incentives, including a chance to win a FREE ticket to Splash in North America or EMEA, as well as a chance to win an autographed hat by OneStream’s Brand Ambassador and PGA Tour Pro, Sepp Straka. Additionally, hear directly from some of our global partners on why they chose to work with OneStream and what the partnership means to them.

Why the OneStream Partner Community is Successful

Also, our sales leaders will talk about partners as our strongest allies and why OneStream is stronger than our competition. The OneStream partner community is successful because of the full support of the entire OneStream organization. The relationship between our partners and each OneStream team is based on mutual trust, open communication and transparency. Collectively, this results in a unified effort and cohesive message when speaking with customers and prospects, ensuring the highest level of customer success in all we do.

Conclusion/Learn More

During this month, I ask that if you are in contact with our partners, wish them a great appreciation month and thank them for the wonderful job they do in assisting our customers and us every day.

Thank you again, and Happy Partner Appreciation Month! Interested in joining the OneStream partner ecosystem? join here.

Stephanie Cramp, Sr. Vice President, Global Alliances, OneStream Software

 

Become a Partner

This year has been truly unprecedented.  While there’s no need to name some of the events, suffice to say they’ve been significant and life-changing for many people, companies and even countries!  The many organisations closing out the year thus have a lot to be positive about.  And now is a good time to not only reflect on the past year but also look ahead and determine what actions today will help the organisation streamline financial close and consolidation processes to weather the storms ahead.

Year-End Challenges

Many Finance organisations are still bogged down by inefficiencies in routine processes within the period-end financial close and reporting cycle.  And that situation makes it difficult to shift time to value-added analysis and decision support.  In fact, many organisations are still closing the books much in the same way they did 10-15 years ago.  Even those organisations that have changed and updated over time can still struggle with routine period-end processes.

Here are some of the reasons organisations are still struggling with financial close and consolidation processes: 

Figure 1:  Silos of Finance Solutions

Collectively, the above aspects dilute the ability of Finance teams to focus on driving performance and supporting critical decision-making.  These problems are then only further compounded when key functionality isn’t in place to deal effectively with the increasingly complex requirements and common challenges across the financial close process.

An inefficient financial close process can have a material impact on Finance team members or – worse – negatively impact organisational performance.  How?  Here are just a few examples:

  1. Delays in the release of financials
  2. Issues identified during internal or external audits that must be resolved
  3. Finance staff working very long hours and/or weekends
  4. Significant manual activities (journal adjustments, moving data or copying/pasting to reports)
  5. Lack of adherence to any kind of financial close calendar
  6. Lack of a standard chart of accounts across divisions/business units
  7. More time spent on talking about the past than the future
  8. Continued discussion about the prior month close to the end of the current month

And the best way for organisations to avoid those pitfalls year after year? 

Make New Year’s resolutions related to financial close and consolidation processes.

New Year’s Resolutions

A good way to define such New Year’s resolutions is to focus on the desired outcomes.  These outcomes could include the desire to react faster to changes, increase visibility and transparency, save time through automation, or reduce the cost to report.

While those outcomes can change from one organisation to the next, successful organisations will have adopted many of the following outcome-based New Year’s resolutions:

  1. Define a close calendar to orchestrate and monitor the process on a day-by-day basis
  2. Provide clear audit trails and visibility to ensure accuracy and consistency
  3. Focus on an efficient repeatable process to eliminate risk by reducing manual movements of data and automating data feeds/validations
  4. Eliminate errors and drive standardisation by fully automating processes & reporting
  5. Take advantage of built-in financial intelligence to handle complex financial consolidation (e.g., intercompany eliminations, foreign currency exchange [FX], accounting for partial ownerships)
  6. Improve resource management by keeping a close eye on people-related issues and avoiding burnout by reducing and evenly distributing workloads
  7. Reduce silos of systems by adopting a modern, cloud-based solution such as OneStream for the financial close

The benefits of such New Year’s resolutions can be significant.  How?   Well, when more reliable financial information is available earlier, management can make prompt, informed and effective decisions.  The early, effective external publication of financial results also indicates strong financial management and positively impacts the external stakeholder view of the organisation. 

With a streamlined financial close and consolidation process, organisations can then better align Finance and the business with actual results and forward-looking strategies – opening-up significant new opportunities.

Organisations that successfully automate their financial close, consolidation and reporting have, in turn, been more successful at driving financial performance and delivering value.  And perhaps most importantly, such organisations have gained the agility required to lead at speed, adapt to changing business and industry requirements, and weather whatever storms lie ahead.

Learn More

To learn more about how organisations are conquering the complexity in their financial close and consolidation processes, click here to read our whitepaper.  And if you’re ready to take the leap from spreadsheets or legacy CPM solutions to start your Finance Transformation, let’s chat!

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OneStream Achieved a 100% Recommend Score in the BARC Planning Survey 23.  Download the Report.