While Essbase has been a steadfast ally to finance and budgeting teams, evolving expectations require a recalibration of analytical tools and ecosystems. The future lies in embracing innovative, cloud-based OLAP solutions.
Finance and budgeting teams have long been ardent supporters of Essbase. However, despite its many beneficial features, modern times require modern technology. As such, users would gain new capabilities by moving to cloud-based online analytical processing (OLAP). In this article, we will explore why that is the case.
The reasons Essbase has been so popular
As an object-oriented database, Essbase was particularly useful due to its robust multidimensionalcapabilities. Financial planning and analysis (FP&A) teams could structure data hierarchies effortlessly within Essbase and conduct in-depth analyses across various dimensions, such as time, product lines, and regions, fostering a comprehensive understanding of intricate relationships within financial datasets. It streamlined financial planning, and with extraction of actionable insights from multivariate datasets, it enhanced strategic decision-making.
Essbase’s real-time scenario analysis feature is another key advantage. This functionality empowers financial planners to model different scenarios, predicting the impact of diverse business strategies on financial outcomes. This analysis is invaluable in navigating dynamic market conditions, enabling organizations to adapt swiftly to oncoming changes and make data-driven decisions in an evolving business landscape.
Excel has also been a popular tool for finance professionals, serving as a time-honored platform for data analysis, reporting, and planning. Essbase’s Excel-like interface and robust Excel plugins empower them to continue working with their familiar format. This seamless transition enables them to stay within the familiar environment of Excel while leveraging the power of Essbase.
Another vital strength for FP&A professionals is the ease of creating shared dashboards, reports, and analytics with Essbase. The collaborative features of Essbase promote a cohesive and integrated approach to planning. Breaking down departmental silos, insights from different functions can be converged to create a holistic view of the organization’s financial position.
Reports generated through Essbase provide a common language for stakeholders across functions, fostering better communication and understanding. A unified and shared approach enhances the accuracy and reliability of financial plans and also contributes to a more agile and responsive organization. This inclusivity encourages a diversity of perspectives and also ensures that managers across the organization are well-informed and aligned with the overarching financial goals.
See also: Unified Real-Time Platforms
Changed imperatives
The dynamic and fast-paced nature of the contemporary business environment is challenging traditional FP&A practices. Annual or periodic analyses with rigid planning structures have given way to a new imperative for continuous evaluation, real-time insights, and strategic agility.
Modern FP&A professionals face the challenge of navigating an environment where data flows incessantly; digital commerce requires ongoing optimization, and markets and supply chains are in a constant state of flux. Businesses are no longer content with time-bound reports—they seek actionable intelligence derived from continuous analysis to make agile, informed decisions that can keep them ahead of the competition and capitalize on emerging opportunities. The changed norms for FP&A are about breaking free from static models and embracing flexibility, scalability, and adaptability to ensure organizations can thrive amidst the evolving complexities of the contemporary business climate.
Limitations and constraints
Essbase, while historically robust, proves to be rigid in adapting to the evolving needs of modern FP&A. The platform struggles to scale effectively with the increasing volume, variety, and veracity of data that modern businesses confront. The limitations in scalability hinder the ability to process and analyze large datasets efficiently, potentially leading to delays in decision-making processes. Particularly for organizations who strive to harness the power of Big Data for strategic advantage or where speed and agility are paramount, Essbase’s rigidity becomes a considerable constraint.
The system design, rooted in periodic planning and reporting structures, becomes a hindrance when dealing with the dynamic and ever-changing nature of modern business operations. For instance, digital marketing campaigns require ongoing and real-time assessment of their efficacy and efficiency, necessitating continuous adjustments to optimize performance. Modern businesses need tools that can adapt in real time, providing instantaneous insights to empower decision-makers to respond swiftly to market shifts, supply chain disruptions, and emerging opportunities.
Contemporary FP&A teams further face these other limitations with Essbase:
Complex learning curve: The platform’s complex multidimensional modeling demands a profound understanding of financial structures and intricate data relationships. With an extensive feature set, intricate calculations, and advanced functionalities, users must invest significant time and effort to achieve proficiency.
The nuanced syntax of Essbase calculations and the necessity for precise data hierarchies presents a formidable learning curve. This is particularly disadvantageous in the context of modern businesses which encourage managers to use self-service analytics without dependence on skilled data analysts.
Customization limitations: Essbase’s customization constraints pose substantial challenges to contemporary FP&A practices. Its rigid structures and predefined hierarchies limit adaptability to unique business processes. Organizations seeking tailored solutions may encounter restricted choices, compelling them to devise workarounds and compromises. The lack of flexibility can impede agility, efficiency, and seamless integration into diverse organizational workflows.
High TCO: Essbase often leads to a high total cost of ownership for organizations operating in modern FP&A scenarios. The intricacies of implementation, extensive training requirements, and specialized expertise contribute to elevated upfront costs. Licensing fees, ongoing maintenance, periodic upgrades, and the need for skilled administrators further escalate TCO. Additionally, the rigid nature of Essbase may necessitate expensive customizations to align with evolving business needs, making it financially oppressive for organizations striving for flexibility and scalability.
Integration challenges: Essbase’s limitations in integrating with source systems and other BI tools present another significant impediment in the context of interconnected data environments and integrated analytics ecosystem. Challenges in seamlessly connecting with diverse data sources hamper real-time data synchronization, posing challenges for dynamic financial analyses. The lack of integration flexibility disrupts the cohesive flow of information, requiring manual interventions for data import/export.
See also: Four Kinds of Software to Process Streaming Data in Real Time
Advantages of Migrating to a Cloud-Based OLAP
The traditional strength of Essbase, while commendable, is being challenged by the ever-growing complexities and demands placed on FP&A teams. FP&A teams are seeking solutions that go beyond the traditional confines of Essbase, enabling them to delve deeper into data, provide more detailed and actionable insights, and contribute meaningfully to strategic decision-making processes.
Capabilities beyond just analytical capabilities are available. FP&A teams are also looking for tools that seamlessly integrate with workflows, offering enhanced collaboration features, real-time data synchronization, and an intuitive user experience. The goal is to break down silos, foster cross-functional collaboration, and align financial goals with broader business objectives.
To meet these changing expectations, FP&A professionals are exploring modern cloud-based solutions. Cloud OLAP solutions, in particular, are gaining traction due to their scalability, accessibility, and collaboration capabilities. These solutions not only address the limitations posed by Essbase but also provide on-demand scalability, real-time collaboration, and automatic updates, reducing the burden on internal IT teams. Some of these compelling advantages are:
Seamless integration with source systems: Cloud-based OLAP solutions excel in integrating with diverse source systems, such as ERP and CRM systems. The integration complexity, often a hurdle for on-premises solutions, becomes simplified in the cloud. By ensuring smooth data flow and consistency across platforms, organizations can consolidate data sources efficiently, minimizing duplicity and reduce data maintenance overhead.
On-demand scalability: Cloud-based OLAP solutions offer unparalleled scalability, adapting effortlessly to growing data volumes and increased user demands. Operating on a pay-as-you-go model, these solutions bring in cost savings when compared to traditional on-premises infrastructure, allowing organizations to optimize expenses based on actual usage and avoid substantial upfront investments.
Accessibility, agility, and continuous planning: Cloud-based OLAP solutions redefine accessibility, providing secure, real-time access to financial data from any location with an internet connection. This fosters collaboration among geographically dispersed teams, creating a more agile and responsive FP&A process. These solutions support continuous planning and scenario-based analysis, enabling organizations to adapt swiftly to changing market conditions and make informed decisions in real time.
Automatic updates and maintenance: Cloud solutions bring in the advantage of automatic updates and maintenance. This ensures that OLAP tools consistently run on the latest software versions, offering access to cutting-edge features, security patches, and performance improvements without manual intervention. Modern architectures, including rolling updates, zero downtime patch deployments, continuous deployment, integration, and monitoring, have become inherent features of cloud-based OLAP solutions.
Modern visualization and reporting: Modern cloud-based solutions come equipped with built-in modern visualization tools and smooth integration with various BI applications. The integration of visual elements into financial insights simplifies comprehension for non-finance stakeholders, fostering a more cohesive and collaborative decision-making process.
Data security and compliance: OLAP solutions available on the cloud prioritize robust data security and compliance measures. Implementing encryption, access controls, audit trails, and SOC2 compliance, these solutions ensure data protection and adherence to regulations. Additionally, features like data loss prevention, backup and recovery mechanisms, and sensitivity labeling further fortify the overall security of financial information.
A final word on the need for OLAP
While Essbase has been a steadfast ally to finance and budgeting teams, the evolving expectations from FP&A require a recalibration of analytical tools and ecosystems. The future lies in embracing innovative, cloud-based solutions that empower FP&A teams to navigate the complexities of modern business, bring agility and trust, and ensure that they remain at the forefront of strategic decision-making processes.
