Ventana Research Drives Five Executive Action Items for Competitive Advantage in Financial Performance Management

Business Wire, Jan 22, 2008

Companies That Take an Enterprise Approach Excel in Financial Performance Management

MIAMISBURG, Ohio -- Teradata Corporation (NYSE: TDC), the global leader in enterprise data warehousing, today announced a list of five action items to guide executives who intend to develop financial performance management (FPM) capabilities for competitive advantage. The list is validated by the newly released results of a Ventana Research benchmark, "Financial Performance Management for the 21st Century," as well as the market observations of Teradata's leading data warehousing consultants.

The benchmark from Ventana Research of nearly two hundred financial and supporting IT executives and analysts, released today, identifies the common challenges finance departments experience - most of which are caused by disconnected, complex information infrastructures. Summing up the adverse effects of IT complexity, only 14 percent of respondents say that their companies effectively link strategy and execution by managing to operational metrics that tie back to strategic ones. In addition, only 25 percent understand how their department or business unit's strategic objectives link to those of their colleagues.

Based on the benchmark from Ventana Research, Teradata financial intelligence consultants made the following executive recommendations:

1. Link detailed operational and financial data to better understand and forecast the impact of operational drivers on financial results.

2. Complement the transaction processing strengths of ERP systems with analytical flexibility based on performance views tied to a shared, centralized source of enterprise information.

3. Reduce complexity by simplifying and standardizing information management, freeing key resources to spend less time on data collection and validation and focus instead on business analysis.

4. Invest in architectures that scale as the business grows and more users are added to the database community.

5. Increase collaboration between finance and IT specialists so that they understand each other's requirements, vocabulary and objectives.

Growing regulatory and reporting demands are increasing the pressure on finance organizations to more tightly align their companies' technology infrastructures around financial performance requirements, economic opportunity discovery and business strategy.

"There is some confusion in the minds of people in finance organizations about which functions their ERP should handle and which they shouldn't," said Robert Kugel, senior vice president and research director at Ventana Research. "This gets in the way of achieving more from performance management efforts. In many cases, especially in larger companies, it makes sense to centralize data handling and separate this from the core transactional processes managed by their ERP systems."

Studies by finance benchmarking firm The Hackett Group have found that "world-class" companies - those with superior profitability and lower share price volatility - are nearly 30 percent more likely to generate all business reports from a centralized data warehouse and to employ enterprise-wide, common data definitions and consolidation rules.

"Most CFO organizations now recognize that ERP systems alone are not designed to enhance their financial performance management capabilities in a way that links strategy to execution, quickly explains past performance, or effectively forecasts future results," said John Bradish, director of Teradata Finance and Performance Management practices for the Americas. "In order to leverage these recommendations and drive improved corporate performance, increasing numbers of CFO organizations are turning to Teradata. Our warehouse platform provides enterprise-wide data integration across all legacy systems and ERPs, and integrates easily with all leading business intelligence and business performance management tools."

The business impact of taking an enterprise data warehousing approach to financial analysis was the subject of a January 8 presentation at a national Teradata sales conference. Speaking to 1,100 sales and consulting professionals, Jerry Boerner, executive director of finance, AT&T said, "We feel we have achieved a competitive advantage, we know our information is accurate, we've reduced our costs for reporting, improved our financial results and gained deep customer insights."

Enterprise Data Warehouses produced by Teradata analyze business operations to drive better, faster decisions by providing a complete view of the business and the agility to create a competitive advantage. The report is at http://www.teradata.com/t/page/176757/index.html

About Teradata

Teradata Corporation (NYSE: TDC) is the world's largest company solely focused on raising intelligence through data warehousing and enterprise analytics. Teradata is in more than 60 countries and on the Web at www.teradata.com.

Teradata is a trademark or registered trademark of Teradata Corporation in the United States and other countries.