Consolidation_01

For many years it seems like every mid-market and enterprise resource planning (ERP) vendor has aspired to offer native financial consolidation software. However, they all seem to fall short, often to the disappointment of customers that were promised that their new ERP system easily could produce the consolidated financials from their individual subsidiary ledgers. 

So why is it so hard for an ERP vendor to deliver the necessary financial consolidation functionality inside the ERP system itself? There can be any number of reasons.

Limitations in Current Financial Consolidation ERPs

  • Lack of ability to handle different chart of accounts
  • Lack of ability of consolidating across subsidiaries with different fiscal calendars
  • Poor currency conversion functionality¬†
  • Weak auto-elimination functionality
  • Tedious to post manual consolidation adjustments
  • Weak financial report writer to produce the consolidated reports
  • Clunky consolidation process with too many steps¬†
  • Problematic to consolidate across subsidiaries with different ERPs
  • Lack of dynamic pro-forma consolidations

 

It would be a controller’s dream if all of these areas were elegantly handled within their ERP system. And, while most mid-market and enterprise ERPs typically can check all or most of the boxes for consolidation features, almost always, consolidating in the ERP it is simply too clunky with too many steps. Because of this, the finance team ends up doing it in Excel where they at least are comfortable with formulas and they can produce professional report layout. 

 

overloaded manager

Microsoft Dynamics 365 ERP

But what about Microsoft’s Dynamics 365 Finance and Operations (D365 FO) ERP system? 

While it clearly can be considered one of the top cloud solutions on the market today- alongside SAP, Oracle and WorkdayРcustomers with significant consolidations and related financial reporting needs, often end up in Excel in the final steps of the process. 

While there are plenty of ERP consolidation features in D365 FO, and its native Management Reporter is an above-the-average report writer, it is increasingly normal that customers add on a ‚Äúbest-of-breed‚ÄĚ corporate performance management (CPM) solution to streamline their financial consolidation and reporting software.¬†¬†

Modern cloud-based CPM solutions

Solver is an example of a CPM solution that comes with several added advantages for Microsoft customers.

Advantages of Solver CPM for Financial Consolidation

  • Solution is cloud-based Azure like D365 FO
  • Its configurable to D365‚Äôs general ledger as well as sub-ledgers
  • It has a pre-built connector to Power BI for visualization

PowerBI_Dashboard_01

 

Some cloud-based CPM vendors now also offer an Excel add-in to give power users more flexible and familiar report design. 

End users can still run the same reports in the cloud using their web browsers. They could do the same using their local Excel on the desktop connected to the CPM database in the cloud.

Consolidation_01

 

An added advantage of modern cloud-based CPM solutions is that they typically also house advanced budgeting and workflow capabilities. This allow for a single solution and a single report/form designer for both financial reporting, consolidations and budgeting. 

Level Up Your Dynamics 365 Finance & Operations With Solver

In the next decade, enabling faster and better decisions will be one of the key competitive advantages. This advantage differentiates successful, growing companies from others. 

Dynamics 365 Finance and Operations, a leading ERP solution, is a great cloud-based transaction platform because it drives better data and accounting processes. A modern CPM solution with a snug fit on top of D365 FO and that compliments visualization in Power BI checks the boxes that a finance team needs to take their ERP financial consolidations and reporting processes to the next level.

powerbiandsolver

If you have ever tried to build and maintain financial reports inside a visualization tool, the answer should be simple. Power BI works well for dashboards, but modern cloud-based corporate performance management (CPM) solutions are the best option for your financial reports.

BI vs. CPM

Let’s elaborate. Power BI belongs to a category typically referred to as Business Intelligence (BI) tools. While purpose-built, financial reporting and consolidation tools belong to a category referred to as Corporate Performance Management (CPM) Software.

Business Intelligence:

In the business intelligence category, you also find other well-known solutions such as Tableau and Domo. For the most part, BI tools are purpose-built for dashboards with rich visualizations. Also, BI tools are increasingly infused with artificial intelligence (AI) capabilities.

Corporate Performance Management Software:

On the other hand, CPM solutions are specifically designed for accounting teams to consolidate financial data. CPMs often produce professionally formatted financial reports such as: 

  • Profit & Loss
  • Balance Sheet
  • Cash flow statements

Most CPM reporting tools offer budgeting modules. And in recent years, the ability to do sophisticated planning such as sales forecasting and modeling.

If the difference between BI and CPM is so clear, why is ‚ÄúFinancial Reporting in Power BI or in a Corporate Performance Management Solution‚ÄĚ even a topic worth covering in a blog?¬†

Well, with the rapid rise in popularity of Power BI for financial reporting and its key competitors, an army of ‚Äúhungry‚ÄĚ consultants have emerged.¬† And, given a strong and flexible tool like Power BI, a sales person with the right technical skills can make almost anything, including formatted financial reports, look good.¬† Many companies have fallen into this trap lately of using Power BI for financial reporting. And, when you ask a skilled, revenue motivated consultant: Can you do that? Chances are that you will get a ‚ÄúYes!‚Ä̬† And after a few weeks‚Ķor a few months, and a sizable consulting bill, you may actually have good looking Power BI financial reports.¬† But, as excited as your executives may be to have a single cloud-based portal for both dashboards and financial reports, for most financial executives this has a tendency to turn into a small nightmare.¬† Why?

Because neither Power BI nor its BI competitors were designed to manage a financial reporting process.

A lot of hard coding and hacking is needed behind the scenes in Power BI’s modeling language. Of course, if you are ready to hire a technical expert or keep your Power BI consultant permanently retained to handle model changes as your chart of accounts grows, your roll-ups change or you need to write a new report, you could survive for a while. Eventually, we can say with certainty, you will be back in Excel to do your financial reporting where your accounting team is comfortable with formulas and formatting.

Alternatively, you can deploy a CPM solution that is built to streamline the financial process. Also, you can deploy a CPM tool to deliver professionally formatted financial statements.

With a CPM solution, you can also move your budgeting process into the CPM tool and run it all in the cloud.  Now, it does not have to be an either or.

The Best Way: Use BI Tools and CPMs Reporting Tools Together

An increasing number of CPM vendors offer pre-built integrations to leading BI tools like Power BI.

Two such vendors are Solver and Prophix. As an example, Solver is similar to Power BI in that it is an Azure cloud-based platform, and it comes with a pre-built connector to Power BI.  Below is an example of a comparison between Power BI and Solver. It clearly shows that companies looking for both dashboards and financial reporting should use a BI tool for their dashboards and a CPM tool for their financial reporting. Neither tool replaces the other.

power bi and solver

As organizations gear up for what can be the “Roaring Twenties,‚ÄĚ having the right tools for the job might be one of the smartest strategic moves a management team can make. On the other hand, trying to fit a square peg in a round hole, could lead to frustration. The frustration is delayed reporting and wasted money. It is increasingly accepted that ‚Äúdata is the new gold.‚ÄĚ When Power BI is integrated with a best-in-class CPM solution and both are running in the cloud, organizations are likely a step closer to success and industry leadership in the years ahead.

Budget Variance Analysis

Budgets can be difficult. While properly analyzing trends and patterns in your financial history and projections is an essential part of budgeting and forecasting, it requires long hours of tedious work if done manually. In fact, many businesses hire FP & A personnel specifically to perform tasks related to variance and analysis.

Whether you’re a small business or an established corporation, you know that few things require more attention and analysis than your budget. So many factors go into creating and adjusting budgets that it’s hard to keep track of every variable and the potential outcome. However, this is where a special process known as budget variance comes into play.

What Is a Budget Variance Analysis?

Budget variance analysis refers to the process of helping a business achieve its goals by analyzing several components:

  • Budget projections
  • Actual budget results
  • Variances within the budget
  • Disparities between budget projections and results

Performing a standard budget variance analysis requires management to compare their budget projections to the actual results and assess the disparities between the two. Budget variance analysis helps business management track favorable and negative budget variances and determine how to adjust the budget to better serve the business’s goals.

By studying a business’s budget variance, management can spot unexpected changes in performance ‚ÄĒ for good or bad. This helps business leaders set realistic future expectations and design a path that leads to future success. Getting from where you are now to your eventual goals is hardly a linear path, and understanding budget variance is key to making steady progress while avoiding financial pitfalls.

When performing financial variance analysis reports, some smaller companies prefer to delegate the task to experts with more extensive experience with budget variance analysis tools and reporting. Within larger companies, budget variance analysis is typically performed by a team built specifically for FP & A variance analysis tasks. Whatever the case may be with your business, it’s important to master budget variance analysis as early as possible.

The Two Types of Budget Variance

In the budget variance analysis process, the results are most often categorized into two types ‚ÄĒ¬†“favorable” variance¬†and¬†“negative” variance. The main difference between the two is fairly self-explanatory. Whereas favorable budget variance refers to a positive difference between projected and actual budget outcomes, such as higher profits, a negative variance literally indicates a negative outcome, such as net loss.

You can learn more about each type of budget variance below.

Favorable

Favorable variance is an indicator that a company is doing better than expected in a certain area. Many people think of favorable variance as a “pleasant surprise” ‚ÄĒ for example, a product sees more sales revenue than expected or the cost of implementing a new product or system is lower than expected. There are many factors that can influence favorable variance in budget analysis.

Negative

Like favorable variance, negative variance is what it sounds like. Negative variances typically signal a loss in revenue. Perhaps a certain product didn’t sell as well as projected, or maybe one of the business’s suppliers hiked the price of certain goods or materials. Whatever the case may be, negative variance needs to be taken very seriously.

Luckily for businesses with good budget variance analysis practices, negative variances will spur a positive adjustment in business strategy to adapt to future challenges.

Best Practices for Budget Variance Reporting & Analysis

Budget variance analysis is an essential part of every business’s financial management process. However, you can only benefit from budget variance analysis if you’re doing it correctly.

Many business management professionals who are unfamiliar with how to do a budget variance analysis tend to overlook important budget factors or even put off the variance reporting and analysis. This can lead to missed opportunities to improve company performance. Thankfully, with the right tools and strategies, budget variance analysis doesn’t need to be a dreaded task.

Here are a few best practices to implement in your budget variance analysis process:

  • Schedule specific times to perform budget variance analysis tasks throughout the year. Regular variance analysis is key in improving a business’s performance.
  • Take corrective action as soon as you discover negative ‚ÄĒ or positive ‚ÄĒ variance to prevent an existing problem from getting worse or to capitalize on a golden opportunity in the market.
  • Keep a close eye on the economic conditions surrounding your business.
  • Automate wherever you can. Have budget variance analysis software take a chunk of the leg work out for you!

Steps to Complete a Budget Variance Analysis

The steps to completing a budget variance analysis are simple, but they’re made even simpler by implementing software automation. Your FP & A personnel or management will complete these steps in variance analysis:

  1. Analyze differences in actual results versus budget: If significant disparities are discovered, typically 10% or more, then these variances must be analyzed to find out why they occurred in the first place. While manual budget variance analysis can take hours of spreadsheet hopping, an automated solution will take only minutes to do the same task.
  2. Figure out why the difference occurred: Whether the difference is positive or negative, you always need to pinpoint its underlying cause so you can learn from the occurrence. The time this takes will vary depending on the variances in question.
  3. Put together a report: This report should document the budget and variance analysis and the reasons for any variance. Automated software can do this for you.
  4. Brainstorming with management and financial analysts:¬†After completing the analysis, you’ll want to consider¬†how to move forward based on the results.

The basic steps of performing a budget variance analysis may seem simple, but they can happen much faster and with more accuracy when using software than when doing the entire process manually.

Choose Solver’s cloud-based CPM solution for Your Software Needs

In order to perform your business budget variance analysis in under 30 minutes, contact Solver Global today to learn how you can take your company to the next level with variance analysis software. We offer comprehensive corporate performance management solutions for businesses in virtually every industry. Let us help you automate your business’s processes and save you time, money and energy!

When you’re managing a large hotel or resort, your day-to-day job requires you to juggle countless moving pieces. From tracking KPIs to producing financial reports, running a sizeable hotel or resort is practically impossible today without the help of advanced¬†hotel performance management software. Fortunately, there are many solutions on the market designed to accommodate the unique needs of the hospitality industry.

When you’re dealing with guests, hotel staff, changing rates, renovations and countless other challenges, it’s crucial that you have a CPM system in place with all of the features you need to keep business thriving. Learn more about the ins and outs of resort financial management software below.

Challenges Hotels and Resorts Face Using CPM Software

Finding the right CPM software for your hotel or resort is essential to managing your business performance processes with efficiency. Because hotels and resorts need to do their¬†budgeting and forecasting¬†from a seasonal standpoint, it’s important that they have the tools to keep up with an ever-changing market.

Common challenges hospitality businesses face can include:

An Unpredictable Local Market

Keeping up with local competition is critical for successful hotel management. When other hotels open, close, change their rates or rebrand, the local economy shifts and forces other hotels to shift with it. You need a reliable method for gleaning economic data as well as data from your own hotel or resort’s performance in order to keep up with ever-changing economic factors.

Keeping Track of Reports

When you run a hotel, you need to have a solid report generation structure in place due to the sheer volume of data you need to document from multiple sources. Financial and operational reports require a substantial amount of upkeep that becomes difficult without CPM automation software.

Flexing With Change

Hotels need to keep track of many different revenue variables at once. Anything from a hotel opening next door to a handful of bad reviews could affect revenue in both short-term and long-term scopes. When this happens, hotels need the ability to bounce back from changes they can’t control and manage factors they have power over.

Keeping Up With Data Sources

Today, hotels and resorts need to keep up with metrics from a wide range of sources in order to properly adjust and plan their business strategies. Keeping up with local economic data and their own¬†performance data¬†‚ÄĒ and having an efficient data storage solution ‚ÄĒ can be challenging tasks for hospitality managers.

Advantages of Implementing CPM Software for Hotels and Resorts

The right CPM software can make a world of difference for a hotel or resort. CPM software can help hotel and resort managers better manage data, create financial reports, analyze metrics from multiple sources, accurately track performance and much more.

Implementing CPM software in the hospitality industry can positively affect hotels and resorts in the following ways. You can:

  • Track hotel performance by monitoring metrics from room revenue, food and beverage revenue, conference room rentals, spa services and other applicable factors
  • Produce financial and operational reports with more accuracy and efficiency for multiple business units
  • Integrate your CPM software with existing booking systems and enterprise resource planning (ERP) software to consolidate hotel data for easy access
  • Perform budgeting and forecasting tasks with ease thanks to automation features
  • Perform tasks related to seasonal performance prediction to stay on top of the market and plan accordingly
  • Consolidate hotel metrics automatically and access them in one place
  • Create benchmarks for your hotel or resort and monitor them consistently
  • Automate time-consuming tasks so you can be free to work on higher-level duties

When you implement CPM software into your hotel or resort’s existing systems, the difference can be night and day. Surprisingly, even many major hotel chains are lagging behind other industries in their utilization of CPM software solutions. But the benefits of incorporating CPM software into hotel and resort management processes are too invaluable to overlook.

CPM software can help improve your hotel performance and streamline financial planning processes exponentially ‚ÄĒ in both the short and long term.

Long-Term Benefits of CPM Software for Hotels and Resorts

A brand new CPM software solution may seem intimidating at first, but once you get over the learning curve, you’ll start to see the benefits of implementing CPM into your hotel or resort almost immediately. The hospitality industry benefits from CPM software integration in a variety of ways ‚ÄĒ and many long term benefits come from this integration.

Resort reporting and budgeting software helps hotel managers and operators view their hotel or resort’s performance in detail and from multiple angles. It can also help automate processes that would otherwise take valuable time away from management while providing comprehensive analytic information and data organization services.

When a hotel or resort implements CPM software, the long-term benefits typically include:

  • Having a better handle on hotel performance and local economic factors
  • Increased revenue due to better revenue and expenditure tracking capabilities
  • An improved ability to predict market trends and hotel performance
  • An improved ability to adapt to internal and external change
  • Streamlined financial reporting processes and automated financial and operational reporting
  • Increased ability to manage hotel performance driven by seasonal demand and other economic factors
  • Improved return on investment (ROI) thanks to increased efficiency and better operational tactics
  • Access to more precise metrics, all in one central hub

Implementing resort financial management software into your hotel’s existing system fosters significant ROI for years to come if utilized optimally.

Contact Solver Global to Learn How CPM Software Can Improve Your Hotel or Resort

Solver is an international leader in providing businesses in all industries with state-of-the-art CPM solutions. To find out more about how we can help increase your hotel or resort’s ROI,¬†contact our friendly team of experts¬†today. With cutting-edge, cloud-based CPM technology, we can help you rise above the competition and generate long term results.

financial planning analysis blog

The rapid growth of Microsoft’s Dynamics 365 Business Central (D365 BC) cloud ERP system comes with investments in add-on app solutions by independent software vendors (ISVs). For example, Progressus is a company as described above and has a project solution for D365 BC. With Progressus, small and mid-sized companies receive easy-to-configure and advanced project accounting functionality in the cloud. 

However, as all project-centric business managers know, good transactional systems also need proper financial planning and analysis tools. In today’s highly competitive market, this can be the difference between success and failure.  As successful project-based companies invest in new cloud-based ERP systems like D365 BC and add advanced project apps like Progressus, a natural next step after the implementation is to look for an integrated and flexible reporting and planning solution. A reporting and planning software like Solver can operate down to the detailed field and dimension level in the Progressus tables inside the ERP system.  

Project Reports for D365 and the Progressus App

Lately, most companies prefer pre-integrated solutions. Due to this, Solver partnered with Progressus and now the corporate performance management solution delivers an out-of-the box integration to both Dynamics 365 Business Central and Progressus. Solver not only provides D365 BC customers with a strong financial reporting and budgeting software for general ledger and sub-ledger data, but it also now extends this functionality into all the project detail provided by Progressus. 

Customer Benefits:

  • Pre-built integration to Dynamics 365 and Progressus tables
  • Pre-built Progressus Project reports
  • Full report writer with Excel design
  • Optional Budgeting module
  • Multi-tenant Azure Cloud Platform
  • Pre-built Power BI integration for interactive Dashboards

However, as with any reporting solution, pre-built report templates speed up deployment when can be used as a starting point. 

Solver offers a number of project-focused reports for Progressus including:  

  • Benchmarking
  • Project Manager Benchmarking
  • Project Capacity by
    • Customer Group and Resource
    • Department and Resource
    • Customer Group and Resource
  • Project Detail by Customer
  • Project List
  • Resource Detail
  • Actual vs Budget Variance

 

project capacity

project 2

Both solutions are independently integrated to Microsoft Dynamics 365 Business Central. After the partnership between the two companies, they decided to configure a joint integration. With the rapid growth in popularity of cloud ERP software like D365 BC, one of the next big cloud drivers is that ISVs, such as Progressus and Solver, work together to give customers elegant integrations across both standard ERP data as well as transactions originating from ISV add-ins to the ERP systems. This eliminates many of the custom integrations that are configured in the old on-premise platforms.

Technology is driving major industry changes into the next decade. Project managers and executives will need and demand complete insight to their data to drive faster and better decisions. Cloud-based ERP vendors and ISVs are making good strides to make this happen!

The terms¬†Corporate Performance Management (CPM)¬†and Enterprise Performance Management (EPM) are often used interchangeably. These two forms of¬†performance management software help businesses manage their resources and stay on track¬†with their financial goals.¬†Many argue that when you’re running a large organization, you need both EPM and CPM. Some solutions like¬†Solver¬†and¬†Anaplan, combines functionality from both categories into a single solution.

There are two important differences between CPM and EPM:

  • CPM focuses specifically on providing a corporate-wide application of performance management, primarily for the organization’s finance department.
  • EPM focuses more broadly on the performance of the entire enterprise, extending beyond the finance departments to sales, marketing, supply chain and more.

If you’re comparing CPM vs. EPM, the choice may seem arbitrary given the similarities.¬†While there is crossover between the functions of CPM and EPM software, CPM takes more of a financial focus, whereas EPM focuses more holistically on the performance factors of the entire organization.

What Is CPM Software?

CPM covers the following basic business processes:

  • Consolidation:¬†Close management and consolidation of an organization’s finances.
  • Planning:¬†Major areas of financial planning, including budgeting and forecasting.
  • Analytics and reporting:¬†Gathering and reporting data from all applicable areas in an organization.

CPM software’s ultimate goal is to help organizations strategize and execute informed plans to reach their financial goals. In this way, EPM software and CPM software are alike.¬†The primary distinguishing factor is that CPM offers advanced applications designed to drive the organization’s goal of increasing profits for itself and its shareholders.

With CPM’s more financially focused approach to managing a business’s performance, organizations can more efficiently track financial progress and perform tasks related to strategic financial planning. CPM enables business leaders to make more informed, data-based decisions to reach their organization’s financial goals and objectives.

Uses of CPM Software

CPM software is best used for performance management in the following scenarios:

  • Specialized performance management processes:¬†With CPM software, you can apply more specialized performance management tactics to your financial planning strategies. CPM software is designed to focus specifically on driving a business’s financial goals and increasing shareholders’ profits.
  • Financial performance data management:¬†CPM software tracks key performance indicators (KPIs) like an organization’s operational costs and other expenditures, revenue, return on investment (ROI) and other applicable data sources. With CPM software, accessing and analyzing an organization’s financial performance is easier than ever.
  • In-depth analytics:¬†CPM software allows business leaders and financial departments to accurately analyze past and current data to make more informed decisions about the direction of their organization. Detailed analytic information is key in financial strategy and planning, and CPM software consolidates financial data into one easily accessible place.
  • Convenient and efficient financial management:¬†With all of your financial data in a central location, managing your business’s financial performance can be done with extreme precision and efficiency with CPM software.

What Is EPM Software?

EPM software performs many of the same functions as CPM software. The primary difference is that while CPM hones in on a business’s¬†financial data and management, EPM takes a broader look at multiple line-of-business operations and analyzes KPIs from each.

Many organizations prefer EPM’s more holistic approach to performance management across the enterprise compared to CPM. For many businesses, all departments play an equally important role in determining the organization’s financial outcomes. While CPM focuses on one area of the entire enterprise (namely finance), EPM considers every applicable department in the processes of consolidation, planning, reporting and analytics.

Uses of EPM Software

Many companies use EPM and CPM software interchangeably. Focusing on EPM’s unique advantages for your organization alongside a CPM system can¬†be a worthwhile investment, especially if you have a particularly large organization.

EPM software is best used for the following processes:

  • A broad look at enterprise performance:¬†EPM software’s purpose is to manage all performance factors across an enterprise, not just the finance department. EPM is a useful tool to provide business leaders with a clear picture of how different parts of the enterprise are performing individually and working together.
  • A bird’s eye view of business analytics:¬†EPM software looks at analytics from virtually every part of an enterprise and tracks the KPIs of multiple departments at once. With EPM, you get a summary of your entire company’s performance due to advanced analytics technology.
  • Large-scale planning:¬†With EPM, budgeting, forecasting and related planning activities are much more efficient and scalable. Creating annual operating plans is easy with the right EPM software on your side.
  • Versatile applications:¬†While CPM software caters to the structure of corporate organizations, EPM software can be used for a wide range of non-corporate organizations as well. EPM can easily accommodate the performance management and planning needs of organizations in the government, education, non-profit and other sectors.
  • Saved time and energy:¬†As with CPM, EPM software saves organizations time, energy and money when properly applied to business processes. With the ability to capture company data automatically from multiple departments at once and consolidate it into a central hub, employees no longer need to spend hours performing these processes manually.

EPM software’s broad organizational focus includes monitoring financial performance, but it does not focus exclusively on finance, as does CPM software. Individual software systems vary in the benefits they offer, and organizations should weigh their options carefully before committing to an EPM or CPM system.

Learn More About Solver Corporate Performance Management Software

EPM and CPM software offer many advantages to executives and financial managers looking to maximize decision-making capabilities in a competitive marketplace. Solver is an easy-to-use and innovative CPM solution that is built for the ever-changing demands of growth-focused companies. Using a single, cloud-based solution, Solver automates reporting, consolidations, forecasting and budgeting processes for complete insight into your business.

At Solver, we can help you decide what your business needs based on your current metrics and financial goals. Submit a sales inquiry or request a demo, and a member of our expert team will reach out to you shortly.

The terms¬†Corporate Performance Management (CPM)¬†and Enterprise Performance Management (EPM) are often used interchangeably. These two forms of¬†performance management software help businesses manage their resources and stay on track¬†with their financial goals.¬†Many argue that when you’re running a large organization, you need both EPM and CPM. Some solutions like¬†Solver¬†and¬†Anaplan, combines functionality from both categories into a single solution.

There are two important differences between CPM and EPM:

  • CPM focuses specifically on providing a corporate-wide application of performance management, primarily for the organization’s finance department.
  • EPM focuses more broadly on the performance of the entire enterprise, extending beyond the finance departments to sales, marketing, supply chain and more.

If you’re comparing CPM vs. EPM, the choice may seem arbitrary given the similarities.¬†While there is crossover between the functions of CPM and EPM software, CPM takes more of a financial focus, whereas EPM focuses more holistically on the performance factors of the entire organization.

What Is CPM Software?

CPM covers the following basic business processes:

  • Consolidation:¬†Close management and consolidation of an organization’s finances.
  • Planning:¬†Major areas of financial planning, including budgeting and forecasting.
  • Analytics and reporting:¬†Gathering and reporting data from all applicable areas in an organization.

CPM software’s ultimate goal is to help organizations strategize and execute informed plans to reach their financial goals. In this way, EPM software and CPM software are alike.¬†The primary distinguishing factor is that CPM offers advanced applications designed to drive the organization’s goal of increasing profits for itself and its shareholders.

With CPM’s more financially focused approach to managing a business’s performance, organizations can more efficiently track financial progress and perform tasks related to strategic financial planning. CPM enables business leaders to make more informed, data-based decisions to reach their organization’s financial goals and objectives.

Uses of CPM Software

CPM software is best used for performance management in the following scenarios:

  • Specialized performance management processes:¬†With CPM software, you can apply more specialized performance management tactics to your financial planning strategies. CPM software is designed to focus specifically on driving a business’s financial goals and increasing shareholders’ profits.
  • Financial performance data management:¬†CPM software tracks key performance indicators (KPIs) like an organization’s operational costs and other expenditures, revenue, return on investment (ROI) and other applicable data sources. With CPM software, accessing and analyzing an organization’s financial performance is easier than ever.
  • In-depth analytics:¬†CPM software allows business leaders and financial departments to accurately analyze past and current data to make more informed decisions about the direction of their organization. Detailed analytic information is key in financial strategy and planning, and CPM software consolidates financial data into one easily accessible place.
  • Convenient and efficient financial management:¬†With all of your financial data in a central location, managing your business’s financial performance can be done with extreme precision and efficiency with CPM software.

What Is EPM Software?

EPM software performs many of the same functions as CPM software. The primary difference is that while CPM hones in on a business’s¬†financial data and management, EPM takes a broader look at multiple line-of-business operations and analyzes KPIs from each.

Many organizations prefer EPM’s more holistic approach to performance management across the enterprise compared to CPM. For many businesses, all departments play an equally important role in determining the organization’s financial outcomes. While CPM focuses on one area of the entire enterprise (namely finance), EPM considers every applicable department in the processes of consolidation, planning, reporting and analytics.

Uses of EPM Software

Many companies use EPM and CPM software interchangeably. Focusing on EPM’s unique advantages for your organization alongside a CPM system can¬†be a worthwhile investment, especially if you have a particularly large organization.

EPM software is best used for the following processes:

  • A broad look at enterprise performance:¬†EPM software’s purpose is to manage all performance factors across an enterprise, not just the finance department. EPM is a useful tool to provide business leaders with a clear picture of how different parts of the enterprise are performing individually and working together.
  • A bird’s eye view of business analytics:¬†EPM software looks at analytics from virtually every part of an enterprise and tracks the KPIs of multiple departments at once. With EPM, you get a summary of your entire company’s performance due to advanced analytics technology.
  • Large-scale planning:¬†With EPM, budgeting, forecasting and related planning activities are much more efficient and scalable. Creating annual operating plans is easy with the right EPM software on your side.
  • Versatile applications:¬†While CPM software caters to the structure of corporate organizations, EPM software can be used for a wide range of non-corporate organizations as well. EPM can easily accommodate the performance management and planning needs of organizations in the government, education, non-profit and other sectors.
  • Saved time and energy:¬†As with CPM, EPM software saves organizations time, energy and money when properly applied to business processes. With the ability to capture company data automatically from multiple departments at once and consolidate it into a central hub, employees no longer need to spend hours performing these processes manually.

EPM software’s broad organizational focus includes monitoring financial performance, but it does not focus exclusively on finance, as does CPM software. Individual software systems vary in the benefits they offer, and organizations should weigh their options carefully before committing to an EPM or CPM system.

Learn More About Solver Corporate Performance Management Software

EPM and CPM software offer many advantages to executives and financial managers looking to maximize decision-making capabilities in a competitive marketplace. Solver is an easy-to-use and innovative CPM solution that is built for the ever-changing demands of growth-focused companies. Using a single, cloud-based solution, Solver automates reporting, consolidations, forecasting and budgeting processes for complete insight into your business.

At Solver, we can help you decide what your business needs based on your current metrics and financial goals. Submit a sales inquiry or request a demo, and a member of our expert team will reach out to you shortly.

sage-intacct

If you have surveyed an audience of mid-market accounting and finance professionals, you almost always find that 90-95% primarily rely on manual budget models in Excel. How is this possible when most enterprise resource planning (ERP) systems, including Sage Intacct, have both basic native ERP budget functionalities? In some cases, they also have specialized add-on modules. For example, the Microsoft Dynamics on-premise ERPs had the now ‚Äúretired‚ÄĚ Forecaster product and for Sage, it is the Sage Budgeting and Planning. Other ERP systems have built various Excel export and import mechanisms to make it easier for users to budget in Excel. Then, re-import the GL portion of the budget.

While most ERP vendor’s budget add-ons do the job better then entering budgets directly into the ERP system, there still seems to be a large group of companies that simply need a full-featured budgeting and forecasting solution to get the workflow, formula and layout flexibility they need. These solutions are typically referred to as Corporate Performance Management (CPM) tools. They also include a reporting and consolidation functionality.

How do I know if my planning process is NOT streamlined?

Typically, there are a number of key motivators when an organization begins to look for a CPM solution to improve its planning process:

  • Effort spent exporting and importing data from Sage Intacct to home grown Excel budgets
  • Current process is error-prone and a resource strain on the finance team
  • Lack of time and resources to quickly re-forecast (for example if a virus hits the economy!)
  • Lack of automation to create many budget versions
  • Current tool too complex for staff to learn so ended up back with a manual Excel model
  • Find that the ROI of automation with a CPM tool is higher than the cost of manual processes

Which benefits should I expect from modern CPM Planning tool?

Because Sage Intacct is a cloud-based ERP system, pretty much all customers looking for a full featured CPM solution like Solver, Adaptive Insight or Anaplan, will also expect a high degree of functionality, including:

  • Cloud-based platform
  • Pre-integration to Sage Intacct and Sage Intacct approval as a certified add-on vendor
  • Complete workflow functionality to manage submissions, reviews and approvals of the budget
  • Highly flexibly budget form design to completely replace the company‚Äôs manual Excel models
  • Strong native report writer for variance reporting and budget consolidations
  • User administration and security that allow for any person to participate in the budget regardless if they are users of Sage Intacct or not
  • Usability features like spreading, break-back, lien items with comments, and more.

I am planning to implement Sage Intacct. What is the best timing for budgeting tool?

Accounting teams always have a lot on their plate. Therefore, it never seems to be a great time to implement another software. However, the best time seems to be in the 2-3 months after the most recent budget cycle. Not only will issues and needs be fresh in mind, but it also allows for plenty of time to select, implement and test a new planning solution before the next budget cycle starts. Some organizations even do a ‚Äúdry run‚ÄĚ of their new budget solution during the year for one of their forecasts.

Carefully selecting a CPM vendor is important

Turbulent Mergers & Acquisition (M&A) market

For example, when a vendor gets acquired, it usually ends less than good for customers. The most typical reason that issues arise is that acquiring companies are much larger than the target company. Therefore, politics and other internal priorities at the parent company tend to drive employees away, disturb the focus of product development, increase prices and more.

Eventually, many acquired products die slowly, and customers end up switching products and vendors. Comshare, Adaytum, SRC Software and Clarity are a few vendors that suffered this during the M&A spree that took place in the CPM space about 15-20 years ago. Over the past 3 years, another wave of M&A has happened, including Workday acquiring Adaptive Insight, a PE firm acquiring Host Analytics from its old investor, Wolters Kluwer acquired Tagetik, and PE-owned Insight Software acquiring Jet Global, Atlas, BizNet and other players in the game.

Protecting the significant financial investment

There are more CPM solutions that are cloud-based. Customers can sign up for one or more years of subscription versus having to purchase the software upfront. However, even if a subscription is reasonable, the amount of time and effort from the internal staff (often with the help of costly consultants) has to be put in to get a CPM solution fully up and running. Also the reports, budget model and dashboards that management need are very significant. You can expect anywhere from twenty thousand dollars and to several hundred and thousands of dollars in direct and indirect costs for full blown implementations. In other words, picking the right vendor and the right product carries a much larger costs than simply a year’s worth of subscription.

Protecting your job

While a good vendor selection and successful implementation can be a significant boon to the careers of project management, it can be the opposite if it all does not work out well. Let alone the stress and long hours that often come from enterprise software implementations,  should it not end well,  can be a scar that follows you for a long time in your career.

Be Strategic

Whether there is too much pain from spreadsheet budgeting or a tactical hint for competitive advantages with faster and better decision-making that drives your search for a CPM solution, a final piece of advice is to be strategic about it. Don’t look at a CPM solution as a temporary band-aid, but view this technology for what it can be when properly chosen and implemented with care. One of your most important decision-making tools that can help drive growth and success for your organization in the 2020s.

hybrid cloud

There are more than 200,000 companies running on-premise ERP systems from Microsoft, Sage, SAP and Acumatica world-wide and many are not planning to move to the cloud yet. However, if you are one of them, this does not mean that your company can’t start taking advantage of modern cloud-based reporting solutions today to drive better and faster decisions for yourself and your management team!

Hasn’t Cloud-based reporting for on-premise ERPs been available for a long time?

Yes, vendors like Prophix, Solver, Vena, Adaptive Insights, and Planful (formerly Host Analytics) have offered both cloud-based financial reporting and budgeting for years. However, all of these vendors have typical corporate performance management (CPM) architectures that require data to be loaded from the on-premise ERP and into the cloud CPM tool before the user can run reports. 

The process requires a ‚Äúrefresh‚ÄĚ of data from the ERP database into the CPM database which means that the data users see in reports is not real-time. This also mean that the drill-down on any number is only as detailed as the lowest level data that was loaded into the cloud CPM database.¬†

Your executives are often ok with this because they want to wait on their report analysis until the accounting team has closed the books. However, the accounting team that is posting transactions in the ERP system almost always prefers live ERP reporting because they want to immediately see the impact of journal entries in their reports. They don’t want to refresh data into a CPM reporting database first, and then wait one minute, ten minutes or significantly longer to run reports after the data has been transferred to the CPM tool.

How do I get true live reporting for my on-premise ERP GP data?  

The obvious answer is that you use the report writer that natively comes with your ERP system such as¬† Management Reporter, GP Report Writer, Smartlist or SQL Reporting Services (SSRS). However, at best, it would be safe to say that these tools have aged ‚Äúgracefully,‚ÄĚ and they are just not comparable to many modern cloud reporting tools.

Key weaknesses of on-premise report tools include:

  • Not particularly user-friendly for accounting staff to design reports.
  • Lack of easy and professional formatting.
  • Typically requires VPN or Terminal Server to connect to the ERP in order to run reports from outside the office network.
  • Maintaining multiple report writers for different data (e.g. for formatted financial statements versus sub-ledger transaction reports).

In order to overcome these weaknesses and help on-premise ERP customers maximize the value of their data a modern, cloud-based reporting platform, Solver has now launched what they refer to as ‚ÄúHybrid Cloud Reporting.‚ÄĚ You can see it live in this video. This is a unique integration technology that enables you to:

  • Use your web-browser to run beautifully formatted reports (looks like Excel formatting).
  • Benefit from true real-time reports on your ERP data without any data transfer to a separate reporting database.
  • Drill-down from any number in the report directly into your underlying GP transactional data.¬†
  • Easy internet and browser-based access with no need for VPN, or software like Terminal Server.
  • Enter budgets from user-friendly forms (looks like Excel) in the cloud and have the transactions stored directly into the GL budget table in the ERP database.
  • Be better prepared to move to a cloud ERP later because the reporting and budgeting solution is already in the cloud.¬†

In other words, now your accountants and reporting end-users get the best of two worlds by only needing a web browser to run live ERP reports and drill-down.

Below is a simple architecture diagram to explain how it works:

hybriddiagram

What about budgeting and forecasting?

Like many other cloud-based CPM solutions, Solver also offers budgeting and forecasting. With the new Hybrid Cloud technology and Solver’s cloud-based Planning Module, users can store budget data directly back from Solver’s budget forms in the cloud, into the General Ledger budget table in the ERP database. 

So, if you struggle with manual Excel-based spreadsheets for your budgets, you can save a lot of time by eliminating emailing files between users, linking between spreadsheets, and put better controls in place for the entire budget process with workflow and approvals. 

As an example, users can access budget forms like the example below with their browser and instantly, until you close the budget process, update their department’s budget in the ERP system. Since Solver’s Hybrid Cloud updates are real-time, reports can immediately be run to see the impact of these changes on the budget.

Enjoy Faster and Better Decisions in the 2020s

Companies like Solver, Prophix, Vena, Adaptive Insights, and Planful are driving the next generation cloud-based reporting and planning technology. However, with the lack of live reporting and live budget write-back to on-premise ERP systems, accountants and very active ERP users have been left with their legacy tools for their real-time reporting needs.  

With the release of Solver Hybrid Cloud, these users now get the best of both worlds and can start ushering in the 2020’s by enabling themselves and other users with faster and better decisions.  Learn more about the benefits of choosing Solver CPM solutions by contacting us today or requesting a demo. 

Supported ERP systems are: Microsoft Dynamics GP, SL, and NAV, Sage 100 (SQL)*, 300* and 500*, SAP Business One (SQL)*, and Acumatica*.

*) Direct budget writeback not offered for these ERPs.

 

It is easy to predict the future when it is business as usual. However, if your business environment is suddenly impacted by something like the coronavirus, a delayed product launch or an unplanned acquisition, your corporate budget may become obsolete very quickly.

How Do I Know it is Time To Replace the Budget with a Forecast?

Sometimes unexpected events happen and it is clear the company’s actual performance is moving so far above or below the annual budget that it no longer provides value in the following ways: 

  • A cost control tool
  • A target for employee compensation plans
  • A detailed financial break-down of corporate strategic goals
  • A financial plan for various corporate initiatives

There are many signs that you need to create a budget reforecast because it is becoming obsolete due to unexpected events, such as:

  • Management comments why a revenue or expense budget variance is occurring
  • Complaints from sales teams that their targets are too high due to XYZ event
  • Lack of budget ownership from department heads

In addition, you will start hearing from executives that the budget column in the financial statements is ‚Äúuseless‚ÄĚ or that the budget target figure in a Key Performance Indicator (KPI) is no longer valuable.¬†

Some organizations have a predefined monthly, quarterly or semi-annual reforecasting process, and when the unexpected happens, they simply take this into account next time they reforecast. These companies often have budgeting and forecasting software such as Solver, Adaptive Insight or Planful to speed up and automate the time and effort it takes to create budgets and forecasts.

Other organizations‚Äô forecasting techniques only include a single annual budget version as a baseline, and for these companies a ‚Äúforced‚ÄĚ reforecast due to unexpected events might involve a lot more arms and legs and interruptions to people‚Äôs work schedules.¬†¬†

What to do When the Corporate Budget Becomes Obsolete?

Companies generally do one of the following when their budgets become obsolete: 

  1. Do nothing and live with the undocumented comments and questions until next year’s budget is launched
  2. Leave the budget as is and use report comments to explain big budget variances (see sample screenshot below).
  3. Reforecast the rest of the year and replace the now defunct budget with the new forecast

Most companies enter their corporate forecasts at a higher level than the annual budget, and often it is only done at the Profit & Loss account level and sometimes also for Balance Sheet and Cash Flow.

In most cases, smaller organizations with well organized, home-grown Excel models can forecast in their spreadsheet and then re-import the forecast into their ERP system or third-party reporting tool. In mid-sized and larger organizations even forecasts at the GL account level may require a lot of work due to requirements to do this by division or department. These companies either have more human resources available to perform the work or they use a budgeting tool to automate it.

Picture1

How to Reforecast Your Budget?

Whether your forecasting requirements are simple enough to be handled in Excel or your company is using a modern budgeting tool, there are ways to avoid the painfully slow bottom-up data entry process. The problem with the latter is that the new forecast may already be old by the time you are done. In these cases, the unexpected event that led to the reforecast could have changed again, leading you to start all over.

Budgeting and forecasting software automation typically means that your input model is highly formula driven. For example, your forecast model can rapidly calculate all the required entries automatically such as % Revenue Increase, Target Net Income, Reduction/Increase in Headcount, etc. This functionality has many names such as:

  • Top-down planning
  • Driver-based modelling
  • Break-back modelling (see sample screenshot below)
  • What-if analysis

Picture2

Regardless of what you call it and the type of planning tool you use, an automated reforecasting model can create an entire forecast in minutes or hours versus days or weeks with manual methods. 

¬†An automated model also allows you to create multiple scenarios. For example, armed with a ‚ÄúBest Case‚ÄĚ, ‚ÄúWorst Case‚ÄĚ or ‚ÄúLikely‚ÄĚ forecast scenarios, you can be prepared for unexpected events without rushing to reforecast. Instead, you replace the ‚ÄúLikely‚ÄĚ budget version with the already created ‚ÄúBest Case‚ÄĚ or ‚ÄúWorst Case‚ÄĚ scenario and you are done.¬†

If the situation calls for a brand new scenario, you adjust the drivers in the automated model and it will recalculate and store the underlying account-level forecast transactions.  

When your company has the right tools and plans ready for a budget reforecast they will be prepared for a virus outbreak, stock market crash or exciting acquisition of a competitor. Planning ahead will reduce stress and blood pressure for the organization’s finance team.