PeopleSoft, a leading provider of enterprise application software, and KPMG Peat Marwick LLP, a leading professional services firm, today announced that they will work in co-operation with Dr Robert Kaplan and Dr Robin Cooper in the field of financial management to develop a new class of financial application, PeopleSoft Performance Measurement.
The new application will enable organisations to track key performance indicators for strategic and operational management by providing activity-based costing, economic value added, and multi-dimensional revenue and profit analysis capabilities that are integrated with PeopleSoft General Ledger.
"This application will fundamentally change the way corporations evaluate financial packages," said Errol van der Merwe, country manager for PeopleSoft South Africa. "The features in general ledgers support financial accounting practices, comply with statutory and reporting requirements, and provide the basis for internal control. General ledgers were never intended to deliver integrated decision support information to evaluate a company`s strategic performance. In areas such as customer and product profitability or cost-to-serve, PeopleSoft`s Performance Measurement represents the future for financial management systems by enabling world-class finance organisations to make profitable decisions."
"PeopleSoft Performance Measurement provides a solution for measuring and managing profitability," said Ralph Canter, principal and national director of performance management with KPMG`s World Class Finance Group. "This new application should help managers measure costs by business processes or activities performed, utilising on-line analytical processing (OLAP) capabilities."
PeopleSoft Performance Measurement will tightly integrate the strategic goals of a company with information from transaction processing and operational systems including PeopleSoft Financials, Distribution, HRMS, and industry-specific applications such as PeopleSoft Manufacturing.
Its sophisticated analytical features extend far beyond those of existing activity-based costing (ABC) applications, and will include the ability to analyse profit by customer, product, channel, market, and geographic area. PeopleSoft Performance Measurement will be built using PeopleTools, an innovative, rapid application development and customisation environment and toolset.
"Performance measurement is a type of analytic application that enables businesses to monitor, analyse, and ultimately improve their core processes," said Henry Morris, program director for data warehousing and applications, International Data Corporation. "PeopleSoft recognises the synergy in linking operational systems such as financials along with performance measures to OLAP-enabled analytic systems."
KPMG and Visionary Academics Partner with PeopleSoft
The global accounting and consulting firm of KPMG has extensive experience designing and implementing custom performance measurement systems for the world`s largest corporations. PeopleSoft has partnered with KPMG to leverage this experience. KPMG will be the preferred implementation partner for PeopleSoft`s new enterprise application.
"PeopleSoft and KPMG are pioneering as the first enterprise software provider and consulting organisation team to provide a solution in this advanced field," said PeopleSoft`s Van der Merwe. "PeopleSoft Performance Measurement will help financial professionals gain recognition as business partners, not just score keepers."
In addition, two leading authorities in the field of performance measurement and activity-based cost management are teaming with PeopleSoft and KPMG to collaborate on the development effort. Dr Robert Kaplan of Harvard Business School and Dr Robin Cooper of Claremont College and the University of Manchester are considered the founding fathers of activity-based costing and are the leaders in the conceptual development of performance measurement systems. Both are noted for their published research, teaching, and consulting on new cost management and performance measurement systems.
"We are excited to be part of the alliance formed between PeopleSoft and KPMG," said Kaplan. "Dr Cooper and I have been searching for ways to implement the latest concepts in activity-based cost management for some time. To succeed in practice, the cutting-edge concepts we`ve been developing require the capabilities of an enterprise-wide system combined with experience and skills in implementing activity-based management. With implementation support and guidance being supplied by the leading consultants in ABCM, PeopleSoft Performance Measurement will enable the most advanced thinking to become imbedded in enterprise-wide systems."
PeopleSoft Customers Look Ahead to PeopleSoft Performance Measurement
PeopleSoft Performance Measurement will have immediate applicability for many PeopleSoft customers. Allmerica Financial Corporation, a holding company for a diversified group of insurance and financial services companies, is one of several PeopleSoft Financials customers considering the new Performance Measurement application.
"Our move to activity-based costing several years ago was based on the need to closely track and understand our expenses," said Richard Leif, vice president of corporate services IS, Allmerica Financial Corporation. "Our immediate interest in Performance Measurement is that it will provide an ABC system that is integrated with our other PeopleSoft applications. The integration with PeopleSoft Financials gives us assurance that these new metrics are fundamentally sound as a platform for our decision-making." PeopleSoft Performance Measurement is currently scheduled for beta release in the second quarter of 1998.
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