Analytics Vendors Capitalize On Emerging Federal Regulations

As public companies scramble to meet emerging federal requirements for faster, more complete financial reporting, vendors are adapting their products to meet that need.

Next month, for example, the new Cognos CPM for Finance software promises to knit together diverse forecasting, budgeting, planning and consolidations with reporting and analysis. The goal is more complete--and more timely--reporting of a business' performance.

Cognos already fields products for score-carding system performance and metrics management but will now offer integration between the components, said Paul Fitzpatrick, senior product marketing manager at the Ottawa-based company.

Cognos is the latest in a line of vendors touting new wares to help customers meet Securities and Exchange reporting requirements mandated by the passage last July of the Sarbanes-Oxley Act.

Until now there have been miscellaneous, non-coordinated reports for different aspects of businesses, said Brent Houlden, solutions regional director of operations for Deloitte and Touche's Central Canada.

The regulations, expected to roll out over the next few years, will force companies to accelerate publication of their quarterly and year-end earnings reports. Companies now have 90 days after year-end close to produce their 10K filing; that will change to 60 days. Deadlines for quarterly 10Q reports will go to 30 days from 45, said Paul Fitzpatrick, senior manager of product marketing for Cognos. In addition, the government will demand that "material" changes to a business also be disclosed faster and the report itself must include details as to how it was generated, he noted.

All of this pressure is not lost on analytics vendors. SAS Financial Management Solutions Version 4.0, slated to ship early next year, promises to support "instant consolidation" of financial data. SAS Institute, Cary, N.C., is also working with two accounting firms to make sure its reporting technology is certified and will meet all accounting requirements, a spokeswoman said.

Earlier this year MicroStrategy updated its analytical package in what it called a bid to help customers meet the new reporting requirements. The latest update to Microstrategy 7i promises to make it easier for companies to create data warehouses that deliver fast, accurate reports on financial information, according to the company. (See related story.)

In addition, in the post-Enron world, companies will have to better track all communications, including instant messaging. Accordingly, vendors such as Facetime Communications and IMLogic are delivering archiving and reporting capabilities for the instant messaging that has taken corporate America by storm. (See Related Story.)

While this flurry of products may not constitute a groundswell of IT spending comparable with the Y2K crisis, there is nonetheless a lot of interest from companies in ensuring they are compliant with the new regulations going forward.

"This is a political hot potato and companies are coming to us to make sure they're at least starting down the path so when the rules are enacted, they'll be able to conform in a reasonable amount of time," said Cognos' Fitzpatrick.