Composing Collaborative Financial Applications

CODA's Profile

Founded in 1979, and headquartered in the United Kingdom, CODA Group is a finance management systems specialist, and part of the publicly traded CODASciSys plc. group (AIM: CSY). After a series of changes which began in the late 1990s when it was first acquired and then divested by former Baan to Science Systems, and then in early 2000, CODA changed its name to CODASciSys. (See Baan Posts $236 Million Loss and Sells Off Coda for Nearly $40M Less Than It Paid). The group offers a broad suite of products and services designed to meet the needs of financial and accounting departments. Its offerings range from financial, accounting, and procurement systems linked to a complementary suite of applications that support finance, reporting, and analytic processes across the organization, through to planning, budgeting, consolidation, reporting, and analytics. It also encompasses process control and compliance management. Its traditional transactional systems are applications that optimize accounting, procurement, asset management, and e-commerce across (and beyond) the entire, often distributed, user enterprise.

Lately, the vendor has expanded into a range of integrated business intelligence (BI), planning, forecasting, and consolidation analytic tools to deliver a more complete, near real time picture of the user organization's finances, performance, and opportunities. Among these complementary applications, which will explained in more detail in this article series, is a range of new collaborative applications that will streamline and automate key business processes, such as regulatory compliance, financial period-end close, and corporate responsibility programs.

Currently CODA employs more than 550 people around the world and delivers global sales, service, and support through its own offices in 11 countries. It has a carefully selected network of partners in a further 17 countries to provide implementation services, training, and support for over 2,500 customers in over 100 countries. Of its total number of employees, about 170 are in research and development (R&D), 60 in support (with 15 based in the US), and 110 in consulting. Its worldwide customer base includes medium and large user organizations found across many industry sectors, such as insurance, shipping, transportation and logistics, retail, banking and finance, professional services, and the public sector. While retail is one of the stronger sectors for CODA in the UK, transportation and shipping and financial services companies are the frequent users in North America.

CODA Financials, Inc., located in Manchester, New Hampshire (US) is one part of the CODA Group. Present in the US and Canada since 1988, CODA Financials has a rich history of helping finance departments solve complex problems where issues of scale or high transactional volumes, reliability, and performance are of primary importance. While many may not have heard of CODA itself, many have heard of some of the global, blue chip organizations that are using CODA products and services to support their business. CODA has more than 250 customers in the US and Canada, including Booz-Allen & Hamilton, Maher Terminals, Texas Pacific Group, Lin TV, Pan-American Life Insurance, and Reno Depot, that have delegated their financial intelligence requirements to CODA. Globally, and across some industry sectors, clients include IKEA in retail, AMBAC Assurance Corporation in the financial services, Central Ohio Transit Authority (COTA) in transportation and logistics, and the Fashion Institute of Design and Merchandising in education.

CODA's Strengths

A key attribute of CODA's offerings is its "multi" features. It can handle multiple companies, multiple currencies, multiple languages, and multiple charts of accounts in a single product's instance or database. Thus, its single or "unified" ledger architecture, which processes and holds the user company's financial data in a single ledger and in real time, eliminates traditionally lengthy and tardy batch updates between sub-ledgers. Consequently, a near real time financial position is always maintained, and the entire general ledger (GL) should always be balanced. Additionally, the Multiple Dimensional "Flexchart" capability supports up to eight variable length account code segments, which enable revenue and expense tracking at a highly detailed level. The Hierarchies and Account Groups features add virtually unlimited account "roll-ups" to meet inquiry, reporting, and drilldown needs.

Additionally, the complementary CODA analysis and collaborative solutions have been designed to integrate seamlessly both with CODA applications and other leading operational systems to capitalize on customers' existing information technology (IT) investments. Increasingly, CODA solutions are also being used to address the complex requirements of companies that need to intelligently share information with business partners, customers, and suppliers. Furthermore, "upgrade friendly" interfaces underline the vendor's technical vision for integration. For instance, CODA's application programming interfaces (API) "de-couple" the source and feeder applications, thereby enabling system upgrades without having to reengineer interfaces. Application-driven form and report customizations are preserved during upgrades.

Last but not least, the open and standards-based product architecture supports multiple platforms, third party reporting tools, secure Microsoft Office integration, and extensible markup language (XML) and Web services integration. Earlier in 2005, Microsoft Corp. and CODA announced a multiyear alliance intended to enable CODA to deliver a range of financial accounting, management, analysis, and control solutions that take advantage of the Microsoft platform. In addition to CODA's existing line of financial management products for the Microsoft platform, versions of the company's next generation of analysis and process control solutions—including CODA-Analytics and CODA-Intelligence for corporate performance management (CPM), and CODA-Control for compliant process management—will be built using Microsoft technology. Among these are the Microsoft .NET Framework, Structured Query Language (SQL) Server 2005 Integration Services and Analysis Services, Microsoft Office System, Windows Server 2003, and SharePoint Portal products and technologies. CODA maintains that the alliance should help it deliver solutions that will allow enterprises to analyze, control, and exploit changing business dynamics and realize greater value from their financial systems investments. By building on the Microsoft platform, CODA pledges to deliver greater customer value with solutions that are even easier to use, deploy, and maintain, and will help reduce ownership and integration costs.

The alliance between CODA and Microsoft builds on the late 2004 announcement that highlighted CODA's support for the new Microsoft Development Center in Denmark. CODA was the first Microsoft independent software vendor (ISV) partner to take advantage of the center to design, develop, and improve solutions that use the latest advancements to the Microsoft platform. The resulting system architecture designs now include a number of new technologies that aim to helping performance and customer usability, as well as to accelerate CODA's time-to-market with its new application architecture. The new technologies include

• Information Bridge Framework (IBF). Allows data from line of business (LOB) systems (such as CODAFinancials) to be "brought to life" inside the Microsoft Office Suite and related systems that use MS Office technology (such as CODA Collaborative Control and CODA XL)
  
  
• Microsoft BizTalk Server 2004. Microsoft engineers reportedly helped the CODA team understand the tight integration of BizTalk into CODA applications, facilitating complex hub-and-spoke back-end business integrations.

There is also an apparent commitment to Microsoft technologies; for example, analytics solutions like Analytic Explorer and CODA Intelligence will exploit SQL Server 2005 integration services, analysis services, and reporting services, while process automation and modeling solutions like CODA-Control will exploit latest Microsoft Office technologies. However, other CODA transactional solutions for financial management support many other platforms and configurations, including OpenVMS (Virtual Memory System), IBM iSeries (AS/400), UNIX, open source, client/server, Web technologies, and Web services (without imposing the choice between client/server and Web-based configurations on the customer). On the application server side, with the choice of the Microsoft SQL Server, Oracle, IBM DB2/400, or Sybase database platforms and the choice of Windows Server, UNIX (HP UX, Sun Solaris, and IBM AIX versions), and IBM iSeries operating systems (OS), application services provide and enforce business rules, security, and validation. The application server includes a single point of maintenance for users, roles, business rules, account validation, reporting roll-up structures, master file details, document posting rules, inquiry templates, pay, matching, etc. The system features a scalable financial engine that can accommodate between tens and thousands of concurrent connections with a farm enabled Web server.

On the other hand, by leveraging extensible markup language (XML) and transmission control protocol/Internet protocol (TCP/IP), Web servers (which can be either the open source Apache on UNIX/IBM iSeries/Linux or Microsoft Internet Information Server [IIS] on Windows) enable a scalable delivery of CODA functionality to a Web browser and to Web service-enabled user interfaces (UI), and also serve as gateways for integration. They enable location independent, tailored, intuitive user operation. Form modifications are stored as separate XML documents, and thus become "upgrade friendly" as customizations are preserved during future upgrades. In addition, the use of hypertext markup language (HTML) over HyperText Transfer Protocol (HTTP)/ Secure HTTP (S-HTTP) enables multi-window, browser-based access to complete CODA functionality, as well as centralized configuration, rollout of the user's desktop environment, and a zero-client footprint installed across a secure intranet connection. Moreover, CODA-Portal provides a common platform to view both live CODA data and non-CODA data published as Web documents.

Finally, programmatic access to CODA application services are available through XML, Web services, Java, Microsoft .NET, or traditional batch loads. Whichever technology is applied, it must respect the same CODA security, validation, and business rules. The approach, which is both Microsoft .NET and Java 2 Enteprise Edition (J2EE) compatible (see Understand J2EE and .NET Environments Before You Choose), aims at secure integration across the firewall, as well as platform and device independent integration. Furthermore, integration routines are independent of the CODA server version, whereas there is a traditional batch loading of historical/legacy system data.

Despite the technology's nascent nature and the challenges that relate to this, Web services have increasingly been offering the following high level benefits to businesses that subscribe to CODA and Microsoft:

• Application to application (A2A) communication across the firewall. Provides a secure communication method across a standard S-HTTP Web connection. Nowadays, enterprise applications can communicate across geographically diverse locations and networks without the need for highly expensive dedicated links.
  
  
• Common integration approach across platforms, vendors and devices. Since Web services have been adopted and supported by a wide variety of technology providers including Microsoft, Oracle, IBM, Sun, and open source vendors (see Liberty Alliance versus WS-I; J2EE versus. .NET; Overwhelmed. YET?). As a result, businesses can be confident that a common integration approach can be employed to provide higher levels of investment protection and reuse resources and skills, regardless of the disparate IT policies used in-house and by their business partners.
  
  
• Rapid application development. Modern application development tools are now engineered to accept or "consume" Web services, and greatly reduce the amount of software coding required to develop functionally rich business applications. This typically translates into significantly lower costs when developing, testing, and supporting applications that are built in this way. It can also enable more nimble and flexible platforms for organizations to respond to changing business needs and market conditions.
  
  
• Reduced costs of software deployment and integration. Web services provide a framework to integrate existing applications on existing platforms and use existing World Wide Web (WWW) network connectivity. De-coupling applications means that discrete components can be upgraded and modified, and that major code changes will not impact other enterprise applications.

For these reasons, CODA's product architecture may very well embody flexibility in terms of both the platform, such as allowing multiple choices for databases, application servers, Web servers, and interfaces; and the deployment mode, where users can mix and match Web browsers, rich-client Office desktops, and other customized client-side applications. The system is also customizable and yet supportable, owing to the data-driven screen presentation and layout. The screen and UI modifications are stored separately from the CODA supplied forms, while cascading style sheets promote the adoption of special, "homemade" styles. In other words, UIs are de-coupled from the current CODA version. Lower maintenance costs are not atypical either, given that the unified GL requires no batch updates, due to the single point of maintenance for security, rules, reporting structures, and so on. Finally, being standards-based (which is not necessarily exclusive to CODA) should bode well for protecting return on investment (ROI), owing to commonly available industry standard development skills.

Thus it is not surprising that CODA achieved record operating profits (up 18.5 percent) of $14.0 million (USD) for 2004 ($4.4 million before goodwill amortization). Although revenue fell slightly for the period as a whole to $130.4 million (USD), the last quarter of the year showed a marked upturn in business, a trend which has reportedly continued into the first half of 2005. License revenues showed growth overall when compared with 2003 (up 3 percent to $19.0 million USD, and with a record number of "license seats" sold in 2004), with a significant improvement in the latter part of 2004. Maintenance also continued to advance (up 2.4 percent to $40.8 million USD), reflecting continued confidence from CODA's customers. However, CODA's latest products require less time to implement, which has slightly reduced the income it makes from consultancy.

The vendor has continued its high investment in R&D which amounts to around 20 percent of its total revenues. It hopes that it can maintain its focus on delivering solutions to the likes of chief finance officers (CFO) and other c-level officers to help them to control and reduce finance costs and address the ever-increasing compliance requirements within their businesses.

The Mainstream Financial Product

During 2004, CODA released CODA-Financials version 10, its next-generation financial management software that uses the modern Web services and analytic technology to streamline key finance processes, such as purchase-to-pay, order-to-cash, and expense management. Seemingly, it was the most comprehensive release of CODA's system to date, representing eighteen months of development effort by the vendor. It also shows that CODA may remain one of the few finance-focused software companies that is able to invest seriously in new software development.

Despite being a major new application, existing CODA-Financials users should be able to take advantage of the new release through a simple upgrade process that does not require major re-implementation work. In addition, CODA hopes that improvements to browsing and reporting, its built-in analysis capabilities, and the continuity provided by maintaining the familiar look-and-feel of previous versions will make the move to the version 10 a real upgrade for existing customers and an obvious choice for prospective customers. Major new enhancements in version 10 include enhanced on-line analytic browsing and reporting; improved automation of back-office processes to address compliance issues; and advanced browser-based functionality for cost savings through centralization or shared services and support for e-business. It also promises customizable dashboards, extended drill-through capabilities, and better analytics to improve performance management and compliance monitoring, as well as advanced extensibility to allow easy integration and use beyond the finance function.

CODA-Financials version 10 is at the center of CODA's Financial Intelligence suite of integrated software. Its features range from managing financial transactions, through to handling standard financial processes across the organization and related reporting to sophisticated planning, budgeting, and analytics. It thus provides the infrastructure and applications necessary to implement a more complete CPM system, and thereby helps a finance department to more efficiently deliver better decision support across an enterprise.