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This article is part 8 of an 8-part series on evaluating the best CPM tools for your business. Part 8 focuses on why and when to use third-party rankings from analysts when evaluating the best CPM software applications.

 

While some companies don’t need to go through a detailed selection process to come up with a list of the top Corporate Performance Management (CPM) software solutions for their organization, others have their work cut out for them. If you belong to the latter category, here is a vendor evaluation tool that may be of help.

One of the key items on many CPM product evaluation checklists is to look at how third-party firms, usually referred to as analysts or analyst websites, review and rank vendors.

Below, we will discuss the use of analysts to help evaluate and score the best financial reporting and planning solutions for your business requirements. This type of third-party research can complement the findings and opinions from your internal team.

When analyst firms are of less importance

Before we go into detail about analyst firms, let’s briefly cover some situations where analyst reports with CPM vendor rankings are not as useful and, in some cases, cost extra time and money in the selection process. One such example is when there is already a leading CPM solution partnered with your ERP vendor and offering pre-built integrations and other benefits that outweigh other potential vendor differences.

Another example is when multiple people on your staff have deep knowledge of a leading CPM solution that they have used before, ideally while they worked at a company from the same industry to ensure that there is still a fit.

Which analyst firms should you use?

While there are a few firms with analysts that are CPM industry experts who do months of research every year to analyze trends and rank vendors, there are many more analysts that are a waste of time or are even directly misleading in their rankings.

  1. Examples of professional CPM analyst firms
    • Analyst and survey-driven rankings: Gartner and Dresner Advisory Services
    • User-driven rankings: G2
  2. Unqualified or misleading “analyst” firms
    • Clickbait websites that will come up with their own vendor lists with no proper research, purely to get ranked on a search engine in order to sell advertising or get “sponsorship” money vendors pay to be on (e.g., a “Top 10 CPM Vendors” list)
    • Websites owned by CPM vendors ranking themselves
    • “Research reports” from “analysts” paid for by a specific CPM vendor

So, if you consult analyst reports to help find the best CPM tool for your company, be conscious of who or what is proving the advice.

How do you know if analyst reports are biased or fair representations of vendors?

It is clear that almost all research performed by a human being is biased one way or another, either consciously (e.g., based on vendor sponsorships or who they speak with the most) or unconsciously (e.g., based on the knowledge of the analyst). Even a firm as well-known as Gartner arguably has some bias in their reports because they include analyst comments, and they include vendor revenue as one of the drivers in their “Magic Quadrants” – something which may or may not indicate who a “leader” should be in a specific industry. Especially with the pace of technology changes and acquisitions in the marketplace, the best CPM solution for your business 6 months ago may no longer be the top choice today.

Other analyst reports or vendor rankings are websites that are driven by user feedback as compared to analyst research. You could argue that these websites provide the most neutral feedback although not as detailed and analytical as the major reports produced by full-fledged analyst firms.

Then there are the countless firms that provide “awards” and rankings based on payments from vendors. These are highly biased and should be avoided. It is fairly easy to detect them by reviewing the firm’s website and observing the lack of depth in CPM research and content.

What professional analysts get right (and sometimes don’t)

The top CPM analyst firms typically do one major CPM report per year. All or parts of the data in the report is driven by customer surveys completed by each vendor’s customers. Because of all the work that goes into these reports and because customers don’t want to be constantly bombarded with surveys, the reports will represent data that is up to 15-16 months old. This lag is because customer surveys typically start 3-4 months before the report is released and then the report will be out on the market for a year until next year’s report is out.

Because many cloud software vendors have monthly releases, and new features arrive all the time, these reports could be missing important vendor features. Websites like G2 and others are starting to follow the same model; they are constantly updated whenever a customer decides to leave their feedback. However, they are less detailed and structured.

Examples of analyst firms that review CPM software

There are a number of companies that provide CPM vendor reviews and market research. Here are examples of three different categories of such firms:

  1. Gartner: Analyst + customer survey-driven vendor rankings. Also provides research reports across almost all categories of IT firms. A major CPM report is produced once per year.
  2. Dresner Advisory Services: Customer survey-driven vendor rankings. Also provides research reports. Almost exclusively focused on CPM (they refer to it as EPM, or Enterprise Performance Management). A major CPM report is produced once per year.
  3. G2: Customer feedback driven. Ranking reports are produced automatically on their website (g2.com). Rankings are continually updated as customers enter their feedback on the G2 website.

How much does it cost to use an analyst firm?

Some CPM vendor research reports are free while many are licensed by the CPM vendors themselves and shared with customers. However, be aware that vendors naturally will only license and share research reports that shed a good light on their product, so there is a bias here to be cognizant of.

Some analyst firms also provide selection services, either as paid calls with their CPM advisors or as full-blown gigs where they will lead or participate in the entire selection process as a “consultant.” In past years, they used to then provide clients with RFP templates with hundreds of pre-defined questions. These have become less popular in recent times as both vendors and internal evaluation teams dread lengthy narratives always shaped to sound good, or they can miss entire functionality areas that are up and coming.

In any case, it is almost always beneficial to do your own homework first by listing your current pain points in as much detail as possible and quantifying ($$) the cost and effort of running the current reporting and planning processes. This “homework” should also include the management team’s vision of the business benefits they want to achieve with a new CPM solution.

Conclusion

The leading cloud CPM software solutions have a lot of features and functionality, and changes and improvements are being released all the time. So, when you and your internal team are coming up with a shortlist of the best CPM solutions for the company’s needs, it is advisable to do your own research, review product demonstrations, and make sure the top candidates integrate easily with your ERP and other important systems. If you have special complexities or a lack of time and evaluation skills on your team, then an analyst firm can assist you in various ways.

Links to useful software research and evaluation assets

This article is part 1 of an 8-part series on evaluating the best CPM tools for your business. Part 1 focuses on evaluating planning capabilities within the best budgeting and forecasting software applications.

 

Planning software is used to streamline budgeting and forecasting processes and belongs to a software category typically referred to as Corporate Performance Management (CPM). Whether caused by economic uncertainty or a more competitive marketplace, this type of cloud software is rapidly increasing in popularity right now. After all, companies that can deliver accurate budgets to plan for their resource allocations, and that continuously update their forecasts to help predict results, get an edge over businesses that don’t have this capability.

However, just implementing a CPM software to streamline the planning processes is not the entire solution for delivering an optimized system for budgeting and forecasting. While there are now dozens of software vendors that can deliver CPM software with planning features, you also need to make sure that the solution is RIGHT for your business. This means that the functionality must be right for your unique company and its budgeting and forecasting needs, and it also has to support industry-specific requirements. And of course, the return on investment (ROI ) needs to be positive.

When working through a software selection process to find the planning software for your organization, there are some features to look for that are more important than others.

Here are some of the top features to look for to find the best budgeting and forecasting app

While most vendors can probably showcase more than 100 features in their product (something which can make software selection a virtual nightmare), there is a clear 80/20 rule that can be applied when you are ready to zoom in on critical success factors.

Here is a list of five major functionality areas:

  1. Flexible input form and report designer

All the best budgeting and forecasting solutions have a “template designer.” In addition to the pre-built input forms and reports that a CPM solution should provide out of the box, the template designer is where a trained user or consultant can build new templates or tailor existing ones to the specific needs of the business.

About half of the CPM vendors have built add-ins to Microsoft Excel where templates are designed. This typically provides the best layout and the richest formula choices, and, of course, most finance departments are very familiar with Excel already which shortens the learning curve. Other vendors have built a proprietary template designer, often with formulas that are similar to Excel.

Payroll Example from Excel add-in

Note: Be aware of CPM vendors that have two template designers because that means twice as much training for power users. It can become messy in workflows, report packages, and other areas if templates are created with two different technologies. The reason for two tools is almost always that the functionality in the vendor’s proprietary designer was not enough for their customers, so they then added an Excel designer to handle complex customer models with a lot of formatting.

Without a strong template designer in your new planning solution, you are at high risk of either significantly having to change your favorite budget input formats to fit the capability of the vendor’s tool or, in many cases, of keeping a portion of your planning models in manual spreadsheets.

Having a flexible and user-friendly template designer also allows for the creation of budget reports that can be run throughout the budget process to see real-time budget updates and identify potential areas of concern. This helps you address issues quickly and early in the process – meaning you will have better visibility and more accurate projections.

Here is list of about 500 examples of reports, budgeting, and forecasting forms, as well as dashboards. It is a good idea to ask your vendor candidates if you can see examples from their template libraries. The more examples they provide, the more you can be assured that their solution has a good template designer.

  1. Line item detail and comments

Especially in annual budget processes, these are very important features to ensure proper documentation and justification of sales figures, expenses, or other figures that a user enters in their department. Typical examples of areas where line item detail and comments are frequently used include Travel Expenses and Office Supplies. When end users are actively using line item detail and they enter comments wherever an explanation is needed, it also tends to increase their sense of ownership and accountability in the budget they are submitting.

corporate forecasting software dashboard

Input of expenses at the GL account level. Includes line item detail, spreading, etc.

Without line item detail, an end user may have to keep detailed build-ups in spreadsheets. Alternatively, they may simply enter higher level figures with no bottom-up calculation behind their numbers. Both of these approaches may result in more inaccurate budgets, as well as delays in the budget process as budget approvers and reviewers often have to ask department heads and other end users to provide explanations and additional detail to back up their numbers.

  1. Workflow and checklists

Organizations that decide to buy a planning software typically have 10 or more users and sometimes hundreds of users. Strong workflow functionality can be a huge time saver by managing:

  • Deadlines
  • Open and closed budgets
  • Budget statuses (submitted, approved, rejected, etc.)
  • Which input forms should be used by different departments
  • And more

While most modern cloud-based planning solutions offer workflow modules, checklists are rarer. A budget checklist is typically a chronologically organized list of all the items a budget manager has to perform or oversee in a corporate planning process. A checklist could start with strategic goals and steps to forecast the rest of the current year, then go into the actual budget process, and finish with reporting and consolidation of the final budget and executive presentations. Checklists help ensure that everything gets done on time and often include functionality like checkbox, description, responsible person, a link to activity, deadline, and notifications.

Planning and reporting process manager

Planning and reporting process manager

 

Without a good workflow module and checklists, chances are good that you are spending a lot more time reminding people of deadlines, asking if their numbers are final and ready for approval, and otherwise managing the process. Processes can get even more frustrating and complex to manage manually in companies that have multiple budget versions to keep track of.

  1. ERP and payroll integrations

While all good CPM solutions can import actual data from source systems such as ERPs and payroll software, the quality and complexity to configure automated integrations varies a lot. Complexity grows when you have data sources spread between cloud and on-premises. For example, it is not unusual that a company’s ERP system is a legacy on-premises or hosted solution and they have other data sources such as payroll that may be a cloud solution. This results in multiple different direct and/or file-based integrations.

When you are evaluating different CPM vendors for your budgeting and forecasting needs, you should request detailed information about each solution’s integration to your systems, including the time and cost it takes to get them configured. A really good, pre-built integration should take at the most an hour to configure, while “toolboxes” can take days to set up and connect to each data source. Which one your vendor offers will therefore usually become clear when you see their estimates for the integration step in the implementation.

Without good, automated integrations to your source systems, your users will end up spending a lot of wasted time on loading and possible “cleaning” of data.

Here is an example of the advantages of a pre-built ERP integration and how it can enable users to get immediate, “day one” benefits from out-of-the-box budget and forecast input forms, reports and dashboards.

  1. Built for cloud

While on-premises planning solutions were the standard technology for decades, today it is cloud solutions that rule. Planning solutions that are built with native cloud architecture offer many benefits over the classic on-premises solutions. These include back-end functionality such as multi-tenancy to allow for efficient and frequent upgrades, spreading of processing and data loads across hardware resources, and otherwise taking advantage of what large public cloud data centers and platforms have to offer.

As an example, in the old on-premises world it was normal to perform an annual upgrade of a software, while in the cloud world, it is the norm to provide completely free and automated monthly updates. This practice also provides users with a continuous stream of new features and bug fixes.

Without a purpose-built cloud architecture, a vendor will fall behind their competitors over time. A number of the legacy on-premises vendors did not rebuild their technologies to be optimized for the cloud and, as a result, they will at some point have to rebuild their product or their customers will migrate to other vendors.

How much does budgeting and forecasting software cost?

While it is important to do your homework to ensure that the vendor you choose has the key features needed for a successful deployment, the total cost and the savings in time and effort, as well as improved decision making, are just as important.

Here are some things to think about when you get prices from your vendor finalists:

  • Does the annual subscription from each vendor contain the same user count and modules?
  • If you are receiving a discount, how long until it resets to the list price?
  • Does the vendor have a written policy for annual price increases?
  • Are the implementation estimates from each vendor for exactly the same work?

A good rule of thumb is to ask each vendor for the total subscription cost for the first 5 years. Make sure this includes any potential price increases.

Also, if the vendor is owned by a private equity firm, chances are that they will be sold while you are still a customer. It is a smart idea to ensure that you receive a document from the vendor that states their policy for price increases in the future, including if they are sold to another company.

Here is a tool to help you compare vendors and calculate return on investment (ROI).

Why not use Excel or the budgeting and forecasting functionality in my ERP system?

Excel is by far the world’s most popular budgeting tool because it is free (if you already own Excel), incredibly flexible, and almost all accounting and finance professionals know how to use it. If you have a simple budget model and few users, Excel may very well be the best planning software for your business – but everyone knows when it is time to replace their homegrown spreadsheets with something better.

Warning signals include:

  • Painful distribution
  • Troubles with collection and consolidation of spreadsheets
  • Broken links
  • Poor reporting
  • Lack of user security
  • Versioning issues

All ERP systems have basic budgeting functionality, but that is rarely enough to handle full-fledged budgeting and forecasting processes. And, regardless of an ERP vendor’s promotion of their built-in planning features, almost always companies end up back in Excel with their budget models even after they buy a brand-new cloud ERP solution. When Excel gets too painful, they acquire a CPM solution.

Conclusion

In summary, choosing a new CPM solution to automate the planning process, as well as to support better and faster decisions, is increasingly becoming a strategic priority for organizations across all industries. As we discussed earlier, certain features are more important than others and can be key drivers of success, in addition to a well-executed implementation process.

Here is a free vendor comparison tool to help you compare vendors across a number of different features. This tool also includes a simple return on investment (ROI) calculator that is part of the total vendor score.

Links to useful software research and evaluation assets

LOS ANGELES, CA. – July 21, 2020 – Solver, a global leader in cloud and web-based Corporate Performance Management (CPM) for mid-market ERP systems, today announced their recognition as an Overall Leader in the Customer Experience Model and a Trust Leader within the Vendor Credibility Model in Dresner Advisory Services 2020 Dresner Wisdom of Crowds® Enterprise Performance Management Market Study.  Dresner Advisory Service, an independent industry resource for Performance Management, Business Intelligence and related markets, annually conducts an in-depth analysis of the enterprise performance management (EPM) market, including trends, deployment options as well as current and planned industry capabilities.

Enterprise performance management remains an important technology, helping organizations to understand multiple metrics and optimize their business,” said Howard Dresner, founder and chief research officer at Dresner Advisory Services. “We congratulate Solver on their performance in their first year of inclusion in our annual assessment of the EPM market.”

In this year’s study, Solver received a perfect recommend score and is considered best in class for consulting continuity.  Specifically, Solver scored higher than the overall sample in categories such as responsiveness, , value, integrity, flexibility/accommodation, business practices and support.

“We are excited about the results of the Dresner Wisdom of Crowds research and the high scores provided by our customers,” says Nils Rasmussen, CEO at Solver. He continues, “With the rising domination of cloud as the platform of choice for corporate planning and financial reporting processes, we will continue to deliver what customers are asking for in order to help them move towards digitalization of the Office of Finance.”

The study noted that the use of enterprise performance management software increased in 2020 with fifty-five percent of survey respondents currently using or considering using EPM software.  Notably, the study also found that annual financial budgets are the highest priority planning capability requirement for EPM software.

Solver’s corporate performance management solution for automated budgeting and forecasting gives organizations a comprehensive planning tool for future investments, cost control, reporting and analysis.  Companies able to accurately estimate financial outcomes and managing financial expectations for the future gain critical insights and competitive advantages.  With budgeting ranked as the most important planning capability for enterprise performance management software, Solver’s advanced, cloud-based functionality delivers clear financial insights, enabling world-class decisions company-wide.

 

About Solver

With a quickly growing community of thousands of global customers and hundreds of partners worldwide, Solver provides a leading cloud Corporate Performance Management suite for Microsoft Dynamics 365 Finance and Business Central, Acumatica, SAP Business One, SAP ByDesign, Sage Intacct, Sage 100, Sage 300, Sage 500, Sage X3, NetSuite and other ERPs. Solver is ranked in the leader quadrant in the Corporate Performance Management (CPM) Software Grid on G2, and as a Microsoft Gold ISV Partner, Solver has won countless awards, including the Microsoft BI Partner of Year Award, recognition on the Gartner Group CPM Magic Quadrant, and Best Places to Work for a workplace culture that celebrates customer service, integrity, and innovation. Solver was named best in class for consulting continuity in Dresner’s Wisdom of Crowds EPM market report.  Solver is sold through its 12 global offices and a worldwide network of partners. For any questions, visit www.solverglobal.com or contact Solver at info@solverglobal.com.