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Does your accounting and finance department waste valuable time with manual monthly reporting tools? Do you have too many Excel spreadsheets to keep track of? Is your budget process slow and painful? With Corporate Performance Management (CPM) software you can lead a transformation of the office of finance in your business – and as a result help enable your management teams with faster and better decisions.

In this blog, we will look at the benefits of CPM software and how it can transform your business.

What Is CPM Software?

Modern Corporate Performance Management software uses cloud platforms that enable a single version of the truth with automated and self-service financial and operational reporting. It also manages the entire budget process as well as forecasting tasks that drive more accurate year-end estimates. Using CPM software enables process improvements, reduces mistakes, minimizes dependency on manual spreadsheets, and speeds up analysis. 

CPM software also enhances and extends the reporting and planning capabilities of ERP systems. While popular ERP solutions from vendors like Microsoft, Sage, SAP, and Acumatica always offer basic financial reporting and budgeting functionality, customers typically grow out of these tools. They then either end up with manual Excel spreadsheet models or they bolt a CPM solution on top of their ERP system to make sure their teams have best-of-breed solutions both for accounting needs as well as planning and reporting.

From Excel challenges to reporting hero

Spreadsheets Are Flexible, but….

Most companies, nonprofits, and government organizations are still relying on manual Excel spreadsheets in various areas of their reporting and planning processes. Chances are that you are too!

Below are some of the typical issues with spreadsheets. The resulting pain can go from overworked staff that quits to finance managers that get fired because of inaccuracies or direct negative impact on a company’s ability to drive efficiencies and to grow: 

  • Inaccurate output due to formula mistakes
  • Broken or outdated links to data sources or other files
  • Lack of efficient collaboration, multiple users cannot access and update files simultaneously
  • Insufficient controls with no approval process or workflow due to the nature of Excel files
  • No real-time reporting during budgeting and forecasting process to assess progress or catch errors
  • Inability to dynamically refresh models with the latest actuals 
  • No audit trail to track when individual changes were made
  • Lack of documentation and support due to proprietary models
  • Dependency on Excel gurus to fix issues or make changes
  • Slow monthly reporting process
  • Slow budget and forecast processes
  • And more…

Challenges with Excel reporting and budgeting

However, despite the potential issues of relying too much on spreadsheets for your financial reporting and planning, they also have many advantages, such as: 

  • Almost all financial staff are familiar with Excel
  • Spreadsheets are incredibly flexible and have great graphics and layout capabilities
  • Models can be designed quickly to solve various information needs

As a result, many organizations rely on CPM tools as their core reporting and budgeting solution and supplement with Excel models for various ad-hoc tasks that are not worthwhile to design into the CPM solution.

Where does CPM Software fit in?

So, which tasks are most suitable for Corporate Performance Management software? CPM solutions take you beyond Excel models and enable a business to build a reporting and planning platform that drives efficiency, enables faster and more reliable information, and provides a tool that can scale with the growth of an organization. With CPM software, financial professionals can:

  • Gain the organization-wide visibility needed to effectively monitor and measure performance
  • Easily combine data from the ERP system as well as other key information sources
  • Enable a collaborative, secure cloud platform for reporting and planning
  • Automate repetitive tasks in the budgeting and reporting processes
  • Quickly generate forecasts and create what-if scenarios during times of uncertainty
  • Manage cash flows to predict future needs and ensure solvency
  • Give users a self-service, on-demand platform, with tools tailored to their specific role
  • Improve data accuracy with strong controls and reconciliation tools
  • Shorten the cost and time for tasks such as annual budgeting and monthly reporting 
  • Gain better prediction through efficient driver-based models that can be quickly updated
  • Simplify multi-company consolidations, including eliminations and currency conversion
  • Enable the use of artificial intelligence (AI) and machine learning
  • Drive faster and better decisions with a single version of the truth
  • And so much more

As companies grow out of Excel spreadsheets for essential financial and planning processes, they can deploy CPM platforms to streamline budgeting, forecasting, financial reporting, and consolidations processes. It should be noted that some of the leading CPM solutions are popular among finance users exactly because they tightly integrate with Excel. This can be thought of as an architecture that takes the best of Excel and the best of a cloud platform and marries the two.

With automation also comes the opportunity to reduce the cost of manual labor and increase accuracy and the time it takes to deliver essential information to decision-makers. What used to take weeks or months with spreadsheets can be reduced to days or hours with modern cloud-based CPM solutions. 

Benefits of CPM Software

A popular notion in recent years is that data is the new gold. While homegrown spreadsheet models can burst at the seams if you try to store too much data, it also quickly turns into a security risk. 

Corporate Performance Management software significantly eliminates these problems by using scalable cloud databases to store data, including from many different data sources. Detailed, menu-driven user administration with single sign-on and multi-factor authentication ensures that reports and budgets are only accessible to the right team members and for the assigned business areas.

As the number of data sources and the actual transaction volume grow, the complexity in spreadsheet models grows exponentially. Similarly, as the number of end users entering data and sharing Excel files grows, formula errors and data entry mistakes become rampant. 

CPM platforms eliminate or significantly reduce such issues by connecting directly to the APIs of your data sources to load historical data on a scheduled basis, enabling power users to deploy (and update!) dashboards, financial reports, and budget models directly to end users in their web browsers.

As a result of the process and quality improvements to planning and reporting activities, the migration from spreadsheet models to a CPM platform will, in a clear and visible way, drive faster and more informed financial and operational decisions.

With modern, cloud-based CPM software you and your staff can focus more on managing the business and stop spending time maintaining complex spreadsheet models. A popular statement related to benefits of CPM platforms is that you will go from spending 80% of your time managing spreadsheets and data and leaving only 20% of your time for analysis, to spending 20% of your time on managing your CPM solution and 80% of your time will be available for analysis.

CPM as an Integrated Cloud Platform

Corporate Performance Management software started becoming popular in the 1990s. The software category matured and a number of CPM offerings for smaller, midsize, and enterprise organizations arrived between 2000 and 2020. Many of these solutions were originally built for on-premises deployment, and they could also be hosted as individual instances in third-party server farms, often referred to as hosting providers.

From 2020 and onward, all modern CPM vendors have built or re-written their solutions to be public cloud, multi-tenant solutions hosted and updated by the vendors themselves. 

Somewhat tedious annual upgrades or patches done by consultants or your IT department have been replaced by automated monthly cloud updates that arrive in your browser with new features and improvements next time you log in. 

In a similar fashion, what used to be a significant upfront purchase followed by annual maintenance fees now have become cloud subscriptions with a once-a-year renewal. Beyond pricing and automated, frequent updates there are other benefits with modern, cloud-based CPM software, such as pre-built connectors to your data sources and marketplaces with pre-built reports, dashboards, and budget templates. 

Combined with the complete elimination of the need to buy and maintain local hardware servers with related electricity costs and database licenses, ROI calculations (free tool here) show that cloud CPM solutions provide significantly better return on investments than the classic on-premises offerings, and they are easier for vendors to support than thousands of local installations at customers’ offices. 

Typical CPM architecture

Rapid CPM Deployment Drives Quick Time to Value

Top CPM vendors have taken the CPM experience to the next level by innovating the initial deployment experience to offer almost immediate use of their product. Two such innovation examples are Solver’s QuickStart and Template Marketplace.  

The underlying technology uses pre-built data source connectors, setup wizards and ready-to-use reports, dashboards, and budget forms to enable as quick as single-day mini-implementations that later can be expanded with custom report writing and other tailoring. That is a vastly quicker time-to-value than classic implementations where you start with an empty CPM box and it often takes 2-3 months of implementation before you get practical use of your new system. 

Here are some important functionality trends and best practices delivered by modern CPM providers:

PRE-BUILT INTEGRATIONS TO ERPS AND OTHER DATA SOURCES

Integrating your transaction data sources to a CPM solution can be a tedious task, often with technical integration consultants involved for days if not weeks. However, with many CPM vendors partnering up with ERP firms, it is increasingly normal that CPM vendors create specific integrations to each popular ERP system, sometimes even with the fields in each system coming pre-mapped. 

 MARKETPLACES WITH OUT-OF-THE BOX TEMPLATES

In the old days, CPM solutions were sold as empty boxes and implementations started from scratch with no budget forms, reports, or dashboards. Nowadays, CPM vendors have realized that customers want quick time to value, and as a result the trend is toward in-app marketplaces where users with a few clicks can select and download templates for immediate use. These templates are typically modifiable so users can change colors, add columns, etc. to tailor them to corporate standards.

SELF-PACED ONLINE TRAINING ACADEMIES

Pre-COVID it was still relatively normal to have physical in-class training to learn a new enterprise software. However, with modern training portals, most vendors now offer self-paced academies where users can learn the CPM software through videos and tutorials and earn certifications from the comfort of their own home.

CRAWL-WALK-RUN

Lengthy big-bang implementations were the standard of CPM projects in the past. It led to higher-risk projects as numerous architectural decisions had to be made, often with required input from users who still did not fully understand how the system would work with their own data. 

With modern rapid deployment options, users can almost immediately start using standard reports, dashboards, and budget forms, which significantly enhances their ability to make smart and informed decisions for later tailoring and expansion of the system. This approach is often described with popular terms such as crawl-walk-run, quick win, MVP (minimum viable product), or rapid deployment.

MAKE BETTER DECISIONS

While a primary goal for CPM software is to automate financial reporting and planning processes, even more important is how it will support faster and better decisions. Timely information available in the right format and to the right manager can have a direct impact on the company’s top and bottom line, whether it drives revenue maximization or cost control. 

Furthermore, and especially during uncertain times, the planning capabilities often become the core value of a corporate performance platform, allowing users to quickly modify drivers and create new budget and forecast scenarios that managers can use for their human capital planning and other essential strategies and tactics. 

The key is to use the CPM solution to free up time for analysis and decisions by automating otherwise tedious data collection, consolidation, reconciliation, and presentation preparation. 

Is Now the Time for Integrated Financial Planning and Reporting With CPM?

One of the key benefits of modern Corporate Performance Management solutions is to streamline planning and reporting processes and at the same time enable your business with a secure cloud platform that consistently produces one version of the truth compared to what you can do with homegrown spreadsheet models, multiple report writers, etc. So, if you have arrived at this conclusion, what are the typical next steps?

  1. Document What Constitutes Success

Meet with executive sponsors and key users to document the desired business outcomes of the CPM project from their point of view. These should be presented to the CPM vendors you are going to evaluate to ensure that they feel comfortable that their solution can deliver these outcomes. The outcomes should also be brought up during and at the end of the project to ensure alignment. 

  • Create a list of open-ended questions
  • Interview executives and key users
  • Reconcile answers and document them in a clear bullet point format  
  1. Define Your Needs

By creating a clearly defined list of your planning and reporting needs and pains, you will be able to communicate relevant requirements to the CPM vendor when the evaluation process starts.

  • Document current as well as desired planning and reporting processes
  • Document the data sources that will be feeding the CPM system  
  • Quantify time currently spent on such processes
  • Describe critical and required functionality 
  • Estimate cost of inefficiencies and inaccurate data
  1. Select the CPM Solution With the Best Fit

The good news is that a number of good Corporate Performance Management solutions are on the market. Usually these are optimized for smaller, medium, and large organizations, and pricing and complexity are closely related to your company size and user count. Here are suggested steps to help find the best CPM solution for your needs:

  • Make final selection with input from users and any third-party experts

You can use this CPM software vendor comparison and ROI tool to assist you in finding the best CPM solution for your needs.

  1. Implementation and Go Live

Even the best software can be implemented poorly, resulting in a subpar outcome. For this reason, you want to carefully verify that consultants and your own team that will be helping with the implementations have the right experience and track record. 

  • Define the joint consultant/employee implementation team.
  • Create a good project plan with clearly defined phases, timelines, and responsible person(s).
  • Be willing to think new based on functionality in the chosen CPM platform (i.e., “square peg in a square hole”) as well as suggestions to make improvements over your old planning and reporting models.
  • Identify areas that can deliver quick wins that enable part of the solution to be used right away. This can often be achieved with pre-built connectors and out-of-the-box or sample templates from the vendor.
  • Communicate well and often and encourage the team to drive innovation and improvements.

With proper planning and execution, you have a high likelihood that your new CPM solution will help take your organization to the next level. Your finance and accounting team will spend less time maintaining old models and have more time for analysis and decision-making.

 

If this is the right time for you to look at a CPM solution, take a look at the Solver tour and contact our team at any time to tell us about your needs. With Solver’s QuickStart integrations and pre-built templates, you could be on your way in as little as one day!

 

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