When Reggie Newsome sought out new financial software for National Public Radio (NPR), he admits he had concerns of deploying a Web-based data service.
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“If it crashed, we were going down,” the financial analyst said. Concern, though, was eventually quieted by the need for employees to access the system off-site and by what he sees as a widespread movement to the cloud.
“A majority of financial systems have some form of a web-based platform you can remote into,” Newsome said.
About a year and a half ago, it considered keeping its Sage Active Planner – an on-premise, Excel-like software -- and floated the possibility of deploying either Oracle Financial Services or Microsoft FRx. Ultimately, NPR selected another Excel-like product offered by Software as a Service (SaaS) vendor Host Analytics.
By selecting its corporate performance management (CPM) suite Decision Hub, Newsome said, NPR was investing in an affordable, modern system that provided the forecasting and budgeting comparison functionality it was seeking.
More recently, NPR deployed a new Web-based data service launched as part of Host Analytics' latest version of the Decision Hub.
The power of third-party data
Host Analytics’ new service provides third-party data -- containing industry-related key performance indicators, such as currency exchange rates or benchmarking information -- based on what services their customers subscribe to. This kind of data can be useful but cumbersome for small and medium-sized businesses to collect on their own, said Jon Kondo, CEO of Host Analytics.
“They have many of the same complexities as larger businesses, but not the same resources,” Kondo said. “The advent of on-demand and Software as a Service is lowering the cost of ownership and bringing functionality to the midmarket.”
According to one analyst, the move by the SaaS vendor to offer third-party data is a natural and even necessary fit.
“Think of data as a service as a data repository that you offer your clients,” said Robert Kugel, senior vice president and research director for San Ramon, Calif.-based Ventana Research Inc. “That solves a really big problem that almost every company has, which is that a lot of information winds up being stored either on individual computers or on individual servers. And it’s difficult, if not impossible, for others to get to it.”
A data service offers up-to-date and consistent information accessed by all of the employees. But concerns with the technology in general persist, especially in terms of ownership, working in the cloud and accessing the data in real time. Kugel said owning the data means companies will have a proprietary right to it versus renting through a service. Additionally, when working in the cloud, potential connectivity issues may occur. But for end users -- like NPR -- that are already operating in the cloud, connectivity issues exist with or without a data subscription service. Beyond that, Kugel categorizes the information provided as “transient data” that doesn’t require ownership.
“You use it for a period of time and then it becomes like yesterday’s paper,” he said. “It’s not terribly necessary.”
Real-time accessibility, though, is a quality that needs to be examined on a case-by-case basis based on an organization’s intent and the service itself, Kugel said.
“It depends on how robust the data offerings are,” Kugel said, noting that he has not accessed Host Analytics’ data service and so could not comment on the product directly. “If the offerings are extremely useful and robust and become an integral part of performance management, scorecarding, forecasting and reviewing activities, then yes, [real-time accessibility] will be very, very important.”
Still, Kugel believes using third-party data makes sense and will continue to see growth. A couple of years ago, Ventana Research explored what kinds of data businesses were using for different functions. When it came to CPM, external data appeared at the bottom of the list.
“What’s good about using external data or information about the world outside of the company or business, it becomes an us-versus-them or us-with-them game,” he said. “And yet, most planning, forecasting and budgeting reviews focus in on us versus us. How we did relative to last year or to our plan. No one is asking how the business compared to the competition or the overall economy.”
Market trends and red flags
Although Newsome said NPR’s 20 primary users are just getting acclimated to the new service, the financial analysts are interested in tapping into currency exchange rates to help budget an international band of reporters. For now, however, analysts are using the service to access financial data from the media industry as a whole to provide a deeper understanding of NPR’s own performance, something it’s never done before.
“If we see drops in revenues or programming, we can see that it’s more cyclical if others are experiencing the same thing, too,” Newsome said. “If we can see spikes or trends … that helps with future forecasts.”
Not only can the additional data provide insight into market trends, it can also help the financial analysts uncover red flags when NPR’s performance isn’t on par with the rest of the industry. In the past, those red flags may not have been as obvious.
“More or less this helps us to dive in, do the analytics and try to find the reason behind it,” Newsome said. “It’s a more engaging tool to ignite an action.”