The IBM-Cognos Mind Meld

When IBM purchased performance management software giant Cognos earlier this year, analysts saw a bright opportunity for the firm to exploit synergies with the intellectual property assets of its global business services arm. It's taken a while, but last week Big Blue announced its first move in that direction. The Strategic Investment Management Blueprint "blends software and services together, providing CFOs and senior finance executives with the analytical tools necessary to improve strategic investment management and decision support in an increasingly volatile business environment," according to the announcement.

Cognos has been turning out blueprints -- pre-defined models for planning, reporting, and analysis which it provides free to clients -- since 2004. The company "has always promoted the blueprints as a sales/project jump-start tool for helping clients develop a better understanding of what's possible using the technology," notes John Colbert, vice president, research and analysis, with professional services firm BPM Partners in Stamford, Conn. For example, a blueprint might demonstrate how the software could help companies in a specific industry, such as pharmaceuticals. Or it might address a specific function such as client profitability.

"Instead of looking at a blank piece of paper, you can look at a pre-defined model that has thought through both the process and the technology," says Tony Levy, Cognos product marketing director for IBM. "We're excited about this one because we're capturing some of the domain knowledge of our global business services financial management practice and enabling it with Cognos software to deliver capabilities around managing programs and their associated funding initiatives."

IBM is positioning the blueprint as a tool to help companies navigate the current turmoil in the business environment. The idea is to build a holistic view of the user's portfolio of initiatives and their interconnections, enabling the organization to quickly adjust its priorities in response to market shocks. "Let's say you're a manufacturer and you want to reduce the cost of goods sold, and you think that you can do that by relocating manufacturing to a low-cost part of the world," says Levy. "But that requires capital; it needs to be funded. So what might be a funding initiative in a time when, perhaps, demand is going to decline? You might consider, for example, outsourcing a call center or implementing shared services in finance, IT, or procurement." Currently when companies make these complex decisions, they generally rely on spreadsheets, he adds. "It's a broken process, with a lot of errors."

All of which, no doubt, will create an attractive backdrop for IBM's consulting services. But Levy insists there are no hidden agendas. The blueprint is available free for current Cognos customers, who can access it from a password-protected site, and Levy concedes that they "may be able to model parts of it themselves."

It may not be free for long, though, Colbert thinks. "I see [the blueprint announcement] as good news, but the proof will be in the robustness of model, and whether clients can use it as a starting point vs. building from scratch," he says. "If that's possible, then I could see Cognos and IBM offering this as a fee-based product."