This is the third blog in our series regarding Forecasting, Budgeting and Planning processes as we experience them at our customers and how these processes can be done in a different way.
As we concluded at the end of our previous blog Kaya has selected Board International as her preferred CPM/EPM tool or CFPA/CFC tool as Gartner would call it. In this blog we will elaborate on what a CPM tool is and how we conducted our research which led to the conclusion that Board International (hereafter called Board) is our preferred tool and why Kaya became implementation partner of this tool.
As mentioned in our previous blog Kaya selected a number of US and/or Europe based solutions to be analysed and compared. We selected following solutions :
• Adaptive Insights
• Board International
• CCH Tagetik
• Host Analytics
Adaptive insights, Anaplan, Host Analytics and Workiva are US based solutions, while the others have an European origin. All of these solutions are used “globally” and vendors have offices in various countries. Most of these vendors are already many years active in the EPM/CPM market.
What functionality to expect of a CPM solution
Typically, below functionality will be present in a CPM solution (first 4 bullets are specifically financial planning and analysis, the other ones are more related to financial close process)
• Financial budgeting and planning. The financial budgeting process sets short-term targets for revenue, expenditure and cash generation, usually with a one-year horizon. Most of the times it uses financial classifications found in the general ledger to classify financial goals and targets. Its normally acts as a fixed control mechanism and is performed by the CFO.
Traditional office-of-finance-oriented planning and forecasting processes consist of a financial modelling engine, with integrated profit-and-loss balance sheet and cash flow forecasting. These capabilities support the creation, review and approval of financially focussed plans and forecast, as well as their associated workflow. These capabilities should also maintain an audit trail of all associated activities.
• Integrated financial planning. This area joins the financial planning components of other business domains, such as workforce and sales, with those of corporate finance. More-innovative initiatives can also be used to meet organization-wide requirements in specific areas, thereby improving overall performance management needs.
• Financial forecasting and modelling. Capabilities in this area are enabled through corporate planning and modelling and “point” solutions that provide best-practice capabilities, especially for the more-flexible, end-user-driven corporate planning and modelling initiatives.
• Management and performance reporting. Performance reporting takes management reporting to a new level of inclusion and ease of use. Its collaboration capabilities transforms traditional management accounting reports into “performance playbooks” that take a more inclusive approach to explaining results. Performance reporting incorporates operational results, financial results and enhanced narratives (narrative reporting).
• Financial consolidation. Bring together financial information from multiple General Ledger sources, while providing eliminations of intercompany accounting and booking for joint-venture and non-General Ledger business units. It may include support for developing a financial consolidation instance, for the purpose of tax data provisioning, to help the tax organization prepare returns and plan. Even with a single General Ledger, an organization may still have complex financial consolidation needs, but small and midsize organizations with limited legal entities may not require complex financial consolidation capabilities.
• Financial reporting. This component provides financial-accounting-based reporting to meet the demands of regulators, investors and tax authorities, and to inform the organization’s operational and strategic financial management.
• Reconciliation management. This component manages the financial accounting reconciliations between feeder systems, bank accounts, subledgers and the General Ledger. It is not inclusive of vertically focused operational reconciliations (that is, financial services operational reconciliations).
• Close management. This component confers the ability to manage the financial close, including activities spanning accounting cycles. Capabilities include functions of close management, close “cockpits” that span ERP and post-ERP processes, and journal entry control.
• Intercompany transactions. This component confers abilities to approve at a voucher level and to handle accounting transactions across multiple General Ledgers and legal entities. This function works closely with intercompany reconciliation.
• Disclosure management. This component confers the ability to support multiple regulatory requirements for disclosure reporting, including eXtensible Business Reporting Language (XBRL) and in-line XBRL (iXBRL) tagging. It may also provide “board book” capability and form the foundation for performance reporting within financial planning and analysis.
When one looks at this list the idea can arise that there exist an overlap with some functionality of Dynamics AX/365 for F&S. To some extent this is true, but bear in mind that usually the functionality of a CPM solution is “deeper” than the functionality in these ERP tools. Besides from that the focus of an ERP tool is registration of (financial) transactions, where in a CPM tool the focus is on analysis of (financial) transactions and prediction of (financial) transactions.
Criteria used for selecting Kaya’s CPM partner
Given the task to compare the various solutions we needed some criteria to determine which of the solutions would best fit the needs of our customers and prospects. This led to following list (most important criteria are listed):
• To what extent is above functionality present in the solution
• To what extent adds the tool functionality for a user also using Dynamics AX/365 (functionality which is good in Dynamics AX/365 doesn’t have to be present or can be somewhat mediocre), for instance predictive analytical capabilities
• How user friendly is the solution (for example how easy is it to create a rolling forecast, ease of data input)
• To what extent is coding necessary to implement the solution (low coding/no coding)
• Can a power user/key user extent the solution if and when needed
• Link/interfacing with Microsoft products, like Microsoft Office (Excel)
• Can data easily imported in /exported from the solution
• How is maintenance organized
Outcome of our analysis
The result of our analysis is known. Kaya found Board the best tool to combine with Dynamics AX/365 compared to other solutions investigated. In our next blog we will go more into the details of our preference for Board and why we think this application is a good extension to implement next to Dynamics AX/365.
Look for other related blogs at https://kaya-consulting.com/category/board/