SAP’s GRC - FPM Combination — A Knockout for CFOs

By Sam Sliman
President, Optimal Solutions Integration

While most vendors market their solutions for governance risk and compliance (GRC) and corporate performance management (CPM) separately, the truth is that the value of both GRC and performance management solutions is most fully realized when these applications are brought together to provide a consolidated view for the CFO.

At the conceptual level, the connection between GRC and performance management is clear enough. Both solutions monitor, measure and automate specific business processes for specific reasons—the former to mitigate risk and ensure regulatory compliance; the latter to align corporate strategy and execution in order to achieve specific business goals.

GRC and performance management must come together for the CFO

The high demand for GRC solutions is a direct result of the regulatory pressure of Sarbanes-Oxley and Basel II, among other regulations. Risk posed to organizations— particularly those with global operations—by a dynamic array of regional, environmental, legal and political events also drives demand for GRC, a market Gartner predicts will top $1.3 billion by 2011.

Top drivers for performance management solutions include the need to increase the speed and accuracy of budgeting and forecasting, the ability to consolidate financial, legal and managerial reporting for global multi-language, multi-currency operations, and overarchingly, the desire to formulate strategy and drive its application throughout the company. Gartner predicts the performance management market will surpass $3 billion by 2011.

To effectively serve the CFO, GRC software must integrate with enterprise applications that drive business processes so that it can collect information and automate GRC controls and processes. In addition, to facilitate budgeting and planning processes, CFOs must have accurate real-time visibility into how their organizations’ financial, human and material resources align to specific business strategies and goals. This is where the inevitable and vital nexus of GRC and performance management comes into clear relief.

Performance management’s direct relation to tracking specific business strategies and goals and the CFO’s need to have real-time visibility into the same, make it clear that the CFO—and by extension the entire organization—is better served when performance management solutions tie directly into GRC solutions or, at the very least, when both GRC and performance management can be directly accessed and controlled by the office of the CFO. Legal and management reporting also calls for a consolidated view of GRC and performance management applications.

SAP’s GRC - FPM combination — A knockout for CFOs

Countering today’s current mix of inadequate point solutions and fragmented approaches to GRC and performance management, SAP recently unveiled its strategy for delivering a host of unified performance optimization applications—SAP’s overarching go-to-market term for enterprise performance management (EPM), GRC and any future performance management categories.

It is not incidental that what is perhaps SAP’s most aggressive move to date on the performance management front is the company’s new portfolio of Financial Performance Management (FPM) products. Coupled with its GRC offering, FPM further illustrates what SAP has been calling its “assault on the office of the CFO.”

SAP’s FPM portfolio brings together the very best of existing SAP products and those acquired from Business Objects as well as other recent acquisitions—Pilot Software, OutlookSoft, Virsa Systems, etc. FPM includes applications for strategy management, planning & consolidation, and profitability & cost management, all of which are vital to the CFO, and all of which will integrate with SAP’s GRC solutions.

By enabling deep business insight based on a holistic view of the enterprise, SAP’s integrated, one-two GRC-FPM delivery is a winning combination for CFOs and a knockout blow to all competitors.