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Ideas for a CFO Replacing an excel-based budgeting/planning process?
Answers
Sonng,
I have used Adaptive Planning since 2005 for several companies. As far as up-time I have not had an experience yet where the service was down, they guarantee 99.9% uptime. I am not sure of your budget for an offering but AP is a great fit for small to mid-sized business (SMB). The current version is very user friendly and works great in conjunction with NetSuite as well as other offerings in the SMB segment.
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Sonn, it sounds like you need new technology. At the same time, many folks have benefited from improving their Excel skills.
Charley Kyd, one of the world's foremost experts on Excel, teaches an Excel webinar series here at Proformative.
The first in the series is available for instant viewing via on-demand video and is titled,
"Leveraging Pivot Charts with Excel Tables to Deliver Interactive Excel Dashboards:"
https://www.proformative.com/events/leveraging-pivot-charts-excel-tables-deliver-interactive-excel-dashboards
Also, here's a treasure trove of free excel spreadsheets, free accounting spreadsheets, plus all kinds of other excel resources, such as tests, tutorials and more:
https://www.proformative.com/resources/free-accounting-spreadsheet
Plus, this free "Excel Shortcuts Cheat Sheet"
https://www.proformative.com/whitepapers/excel-shortcuts-cheat-sheet
Enjoy!
Best... Sarah
I definitely understand replacing spreadsheet applications – we have seen tremendous value from moving to a CPM application. As CFO of Host Analytics we of course use all the Host Analytics CPM suite modules internally - Budgeting and Planning, Financial Consolidations, Reporting, Dashboards and Scorecards.
Best, Kelly
Thank you all for your advices. Do you know the most convincing advantages of AP vs Hyperion? I know the cost is lower but would like to know more about their features. In addition, how is easy to integrate AP with other BI applications.
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You are correct Sonn about AP being much cheaper than Hyperion. As a general rule of thumb, I tend to think of AP (both software + implementation) being about 1/10th the cost of Hyperion.
Now, Hyperion (e.g., Planning) certainly delivers significantly more functionality. But many, many users do not leverage even a majority of the functionality of Hyperion, so if you don't need it, why pay for it?
I have multiple clients who are using AP with some sort of BI application (including Hyperion Essbase, Cognos BI). The least expensive (not counting internal labor expense in the equation) option is to move the data between the BI system and AP via a CSV file (i.e., manual upload of a spreadsheet with the data mapping between fields defined during implementation). This is actually a pretty quick process even though it is manual.
If you don't like this inexpensive manual option, then Adaptive Planning does offer some API's to integrate the systems. But there is a separate subscription for the API above and beyond the subscription for AP itself.
Hope that helps!
Sonng
I actually did a comparison of the two products not too long ago. The following might be a bit wordy...
Product History - Adaptive Planning is a more modern application built “after the internet”. Oracle has many products in this area, generally aged in nature, including acquisitions of Hyperion and Brio. The Oracle legacy is multiple products and higher costs with greater complexity and
Products - When acquiring Oracle ensure you acquire ALL the products needed to meet your requirements. Customers should be extremely diligent in understanding Oracle product list and each products purpose, relevance, cost and value.
Deployment Options - Implementing hosted solution avoids associated hardware, software and IT (installation, upgrade
Single solution for budgeting, forecasting and reporting-Adaptive Planning provides a single solution. Hyperion’s most equivalent product (Hyperion Planning) is a combination of modules and datasets. IT expertise needed for administration and understanding underlying calculations/DB structures and associated tuning and maintenance. Integration tools need to be acquired to ensure Hyperion products can “talk to each other”.
Reliability-Adaptive Planning is “always on” and available. Essbase requires downtime (recalculation, database tuning/maintenance, updating system structures, etc.).
Ease of Use-Significant training and
Cost of Licensing- Adaptive Planning’s SaaS pricing allows their customers to start with an inexpensive deployment, develop and expand their application and invest alongside value creation. Typically, AP's subscription is less than the ongoing maintenance for Hyperion Planning.
Frequency/Cost of Upgrades-Upgrades to Adaptive Planning are included with the subscription fees. Oracle typically will include upgrades within annual maintenance but have periodically charged exceptional/migration fees with major upgrades so customers should be aware that there may be unexpected potential future costs. Customizations may not upgrade successfully (e.g. needed custom script).
Cost of Services and Risk-Adaptive Planning implementations are typically fast (average implementation time is less than 20 consulting days). Hyperion Planning implementations are typically of greater length/slow and customers often never complete their implementation. References should be used to compare cost and risk.
Implementation and Support-Adaptive Planning’s size and SaaS/renewal focus ensures AP provides superior service. Support is provided by teams with the same training and expertise as implementation consultants (escalation allows for immediate involvement of your implementation team if appropriate). Adaptive Planning provides unlimited and free access to training videos, materials and documentations including training on all new features.
Flexibility-Adaptive Planning allows centralized and unique cell-based calculations for sophisticated modeling. Hyperion Planning is more formally centralized so regional/local requirements may not be able to be modeled easily/may require custom code.
On The Fly-Hyperion Planning is unable to absorb typical “on the fly” processes (e.g. adding new accounts, departments, versions, business rules) without significant administration effort and offline time.
Calculations-More complex cross functional business rules and relationships may require custom coding to deliver in Hyperion Planning.
End User-AP's purpose, simple and consistent built web interface allow zero footprint deployment. Excel may appear to be easier but has issues (synchronization of offline, control of template, replication, speed of performance, etc.). Hyperion Planning has many interfaces (further complexity added if deployed alongside other Oracle products).
Ongoing Costs/ROI-As written in the Wall Street Journal, 2002, Microsoft stated that “the initial purchase is usually only 5% of the total cost of owning and maintaining a program”. Oracle implementations are extremely expensive initially, but when the total cost of ownership is examined all customers should consider the expected benefits/savings versus total cost of investment.
Hope that helps.
Sonng, we implemented Host Analytics about 4 years ago and have been very pleased. We too were looking for a solution that would take us out of the Excel maze and into a modern and manageable world. But we also had to manage the training gap to a newer tool. We looked at Hyperion but just couldn't make the numbers work.
Host wound up being incredibly robust in features for an amazing price point comparatively. The tool also bridges the gap of folks moving off of excel with options like direct uploads from excel to the db. In addition, they were able to meet all of our needs on security. We are a private company so we had a tough road to convince our executive team that our data would be safe in Saas environment. The HA folks helped us address that concern and its been great. Reliable, and fast.
Implementation time was quick as well- which matters when you are constantly budgeting. In any case, I would recommend a look at Host Analytics, it worked out well for us.
Although I found AP very advanced, be forewarned that it is not a web based excel. All of their formulas are different than excel and it takes some training to get used to it. I found the AP team very helpful in getting up to speed, but must say I was initially disappointed that the formulas were more difficult to manipulate than I anticipated.
Dear all,
Thank you for your really helpful & valuable advice. I think AP or Host is good solution for my company.
Do you know if they can adapt to the company growth or change i.e in size, complexity, or the way we do budgeting/planning & reporting i.e. by departments, customers, products or approval path?
Thanks & regards,
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One of the "old stories" that traditional planning providers tell you is that SaaS apps are "one size fits all" and thus inflexible. Nothing could be further from the truth. SaaS apps are built on a much more modern architecture than traditional platforms and are built specifically for user-controlled-customization. I would say you will have more adaptability than you may need with either solution. Easiest thing, of course, is to just call them both up and let them shoot it out! Good luck.
What is your motivation for changing?
I have not used Adaptive Planning, but we put in Essbase (the underpinnings or guts of Hyperion) to manage planning and serve as a consolidation tool. If you haven’t looked at Essbase, please do so. It is a cheaper solution than Hyperion and is more flexible to do planning and analysis. With a multi plant set up, but no foreign currency issues, we put this in for much less than $100K.
I agree with Patrick. However, it is important to have an IT group that understands the features and functionality of Essbase and how that matches with the needs of Finance/
The end question the CFO has to ask is can he/she meet his/her requirements with a pre-packaged solution. If the CFO anticipates growth in data, analytics and planning needs that exceed that of AP, then go straight to Essbase. AP or Essbase really depends on the company’s requirements coupled with a vision for the future.
Sonn, you may also want to read the case studies on AP's website. They can be helpful in illuminating the various and unique ways in which people configure the system in order to get maximum value from it. I used the product for a few years at my previous company and it was a tremendously helpful resource.
I suggest that you make sure that the application you choose is able to forecast your entire chart of accounts, as this will enable you to obtain a forecasted balance sheet and a statement of cash flows, in addition to the standard income statement. As a bonus you will be able to obtained forecasted financial ratios, if this is important to your organization. Also make sure that the software is intelligent enough to perform all the required calculations from your assumptions, without requiring you to design and place formulas and links, as this is very tedious and often introduces many errors or omissions. The security aspect you mentioned is very important and some of the non-spreadsheet applications can handle it quite well.
Sonn, I've used Host Analytics as a VP of Finance for middle-market company, and found that it was a robust application and vast improvement over excel spreadsheets. The reporting was excellent and the ability to consolidate was strong. I subsequently spent some time reviewing Adaptive Planning and felt that it's user interface was very good, even more "excel-like" than Host, and perhaps even more intuitive to use in some cases than Host. A smaller, SaaS application that I use with some of my clients is Appcomputing.com, and might be worth a look if the spend for the other applications seems pricy, although if you're looking at Hyperion, then all the alternatives are going to appear as a bargain. Given the alternatives you are evaluating, I don't think you can make a poor choice.
There's a class of product that I've seen many companies use for budgeting, forecasting, and reporting. I call it Excel-Friendly OLAP.
The key characteristic of this class of product is that it offers a collection of worksheet functions that allow Excel formulas to read from and write to "cubes" of data on the server...with full security, of course.
In my experience, the two best products in this class are TM1, from IBM, and PowerOLAP, from PARIS Technologies.
In both cases, users can enter budget or forecast data from spreadsheets to cubes of data on the server. In the case of PowerOLAP, users can connect to the cubes from Excel over the Internet. This allows sales people to update their forecasts from their hotel rooms, and the CFO to analyze the consolidated budgets and forecasts from a Starbuck's.
By keeping Excel in the picture, users can take full advantage of Excel's features to update, analyze, and report budgets and forecasts. But the actual data is stored and consolidated on the server.
Years ago, for example, I'd create two competing sales forecasts. First, the field sales force would create their forecast. Second, I'd use Excel formulas to create a time-series forecast by month by product by region by whatever. In both cases, the results would be written directly to separate areas of the forecast cube on the server.
Then I could use Excel formulas to compare the two competing forecasts. Where the two versions were significantly different, I'd go back to the sales person to ask why her forecast was so different from what past trends would suggest. That question helped me to improve my understanding of market conditions, and it also helped me to correct both sandbagging on the one hand and over-confidence on the other.
I could even save short explanations on the server. This helped me to remember why a particular forecast was unusual.
One nice thing about both products is that they're typically purchased, installed, and managed by the Controller's department, not by IT. That way, Finance has complete control over their own work product. They don't have to plead and wheedle for IT support.
And another nice thing is that these products tend to cost less than budgeting systems and have wider use.
For example, when I consulted in this area clients as diverse as trucking companies, public utilities, and fat rendering firms also used this class of product to consolidate, report, and analyze their data.
I know of one international retail chain that first used one of these products to reduce inventories by millions of dollars, and then expanded its use into other areas. When their CEO was asked about the product at a conference recently, he said, "We run our whole (blanking) company with it."
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Charley, From our experience consulting in this area using nearly all major OLAP technologies on the market I completely agree with your assessment re good fit when flexibility and business user control is required. There have been quite a few changes in this field with new players like Agility Planning (www.agilityplanning.com an SaaS offering that as opposed to using a different proprietary database technology offers an in memory engine for standard RDBMS and users can access with Power BI and Excel) and Jedox that had a free OLAP server version.
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