Corporate Performance Management solutions for - Zift Solutions

Corporate Performance Management solutions for Mid-Market Enterprises

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Corporate Performance Management Solutions for Mid-Market Enterprises SMB Readiness Grid: Mid-Market CPM Solutions

Sanjeev Aggarwal, Partner

Laurie McCabe , Partner

June 2010


2 SMB Group, Inc. Reproduction Prohibited June, 2010

TABLE OF CONTENTS

Section 1: Managing Corporate Performance: The Small and Medium

Business Dilemma .......................................................................................... 3

Section 2: How CPM Solutions Address the Corporate Performance

Management Challenge ............................................................................... 5

Section 3: Mid-market CPM Solutions ........................................................................ 6

Section 4: Deployment and Delivery Options For CPM solutions ............... 8

Section 5: Mid-market CPM Readiness Grid ............................................................ 9

Figure 1: Mid-Market CPM Criteria and Vendor Ratings ....................................... 10

Figure 2: SMB Readiness Grid for Mid-Market CPM Solutions ........................... 11

Section 6: CPM Vendor Mid-Market Readiness Analysis ............................... 12

Section 7: Additional Guidance for Mid-market CPM Decision

Makers ................................................................................................................ 19

Section 8: Summary and Conclusions ...................................................................... 22

Appendix A: SMB Readiness Grid Methodology ................................................. 24

Appendix B: Definitions of SMB Readiness Grid Criteria .............................. 25



MOVING BEYOND EXCEL - Mid-market companies are adopting

Corporate Performance Management (CPM) Solutions to address key pain points In today’s fast-paced and volatile business climate, midsize businesses need a clear vision, financial agility, and strong collaborative capabilities to drive better-informed and more strategic business decisions. Mergers, acquisitions, new business models, and increasing regulatory requirements heighten the importance of having accurate, flexible tools to support corporate forecasting, budgeting, reporting, scorecard, and compliance functions. Many mid-market companies currently use Microsoft Excel spreadsheets, email, shared folders and other ad hoc tools for these tasks but are finding significant shortcomings with this approach. As a result, more businesses are evaluating corporate management (CPM) solutions as a way to get these jobs done faster, more efficiently, and more accurately. For this study, we interviewed several mid-market CPM vendors that are targeting mid-market (firms with 1000 to 2,500 employees) and the upper end of the SMB market (500 or more employees) with their solutions. We also conducted in-depth interviews with several mid-market companies that are using or planning to use CPM solutions. Based on these in-depth conversations and secondary research, we highlight the challenges that mid-market firms face in the corporate performance area and discuss how different types of CPM solutions can help them address these challenges. Then, we analyze seven vendors’ CPM solution readiness for the mid-market—evaluating their company strengths, solution capabilities, and marketing strategies relevant to this customer segment.

SECTION 1: MANAGING CORPORATE PERFORMANCE: THE SMALL AND MEDIUM

BUSINESS DILEMMA

CPM encompasses all of the processes, methodologies, measurements, and systems used by a business to measure and manage performance. CPM gives businesses a framework in which they can set goals, measure actual performance against those goals, analyze the results, and conduct “what-if” scenario planning to evaluate alternative courses of action.

When companies are small, spreadsheets, email and other ad hoc tools often suffice for



As complexity

increases, using

spreadsheets to

manage performance

becomes cumbersome.

managing corporate performance. But as they grow, companies add new products and services, extend into new markets, and pursue new opportunities. They may acquire other companies, expand their geographic footprint, and encounter more stringent regulatory and compliance requirements—all of which make planning, reporting, and analysis more complex.

In addition, all businesses must cope with today’s volatile business climate. Technical innovation occurs at the speed of light, and economic, social and cultural shifts occur rapidly, so companies need to be able to adapt quickly to new opportunities or threats, and to react rapidly as markets shift.

Consequently, as complexity increases, using spreadsheets to manage performance becomes cumbersome. Businesses can’t get the visibility, intelligence or flexibility they need and become frustrated because they can’t see cause-and-effect relationships that, if brought to light, could yield meaningful insight and better decisions. Typical problems with the spreadsheet-based approach include:

Too time-consuming and labor intensive to set up and maintain. Setting up and managing typical budgets and forecasts in Excel can take an inordinate amount of time. Establishing a companywide model, separating organizational plans, distributing to business managers, obtaining their input, consolidating various spreadsheets, debugging broken macros and formulas, and then repeating across multiple iterations requires a significant amount of time and energy across the entire company.

Poor collaboration and visibility. Excel-based methods don’t enable real-time data sharing and updating. When data is siloed in disjointed spreadsheets, it can be tough to consolidate into a unified, accurate view, which severely limits visibility into the planning process.

Error prone. Between 20% and 40% of all spreadsheets contain errors, according to 2005 research by Dr. Raymond R. Panko, professor of IT management in the College of Business Administration at the University of Hawaii. As spreadsheets become more complex and numerous, errors multiply, slipping in through copy and paste mistakes and broken formulas. Without an audit trail, such changes and mistakes can remain undetected, and as a result, businesses can suffer from making decisions based on erroneous information.

Lack of real-time feedback and flexibility. In today’s business climate, things change so fast that an annual budget may not last a quarter. If it is difficult for executives and managers to quickly identify when actual performance diverges



By automating

budgeting and

planning processes,

CPM speeds up the

process and reduces

errors, mistakes and

confusion.

from goals and rapidly collaborate on the best course of action, they risk making serious missteps in the management of their business.

Inadequate analysis and reporting. In addition to the manual consolidation process, which requires extensive labor and time to complete, the resulting plans and reports are often insufficient for managing the business. Decision makers may find that they can’t drill down far enough to get the more detailed information that they need, aren’t able to easily compare versions and scenarios, and do not have adequate data for auditing and other regulatory needs. What’s more, because managing the process requires so much time and energy, finance and business managers are not able to devote enough time to thoroughly analyzing the key decisions necessary to run the company.

SECTION 2: HOW CPM SOLUTIONS ADDRESS THE CORPORATE PERFORMANCE

MANAGEMENT CHALLENGE

When such problems become too painful, companies look for a centralized solution that will give their process increased speed, accuracy, and flexibility as well as provide an audit trail and allow users companywide to work together on “one version of the truth.” CPM solutions are built on a unified database, and provide everyone involved in the planning process with a single, real-time view of the data, facilitating collaboration and communication among participants. By automating budgeting and planning processes, CPM speeds up the process and reduces errors, mistakes and confusion. Self-service dashboards and reporting tools make it easier and less time consuming for people to contribute to and manage the budgeting process. Instead of trying to figure out which version of an Excel plan is the most current or worrying about errors, decision makers can spend time entering more granular data and playing out “what if” scenarios. Finance managers can spend less time managing the process and more time managing the business. As a result, companies can prepare forecasts more frequently and more accurately, enabling better decision making as economic and business conditions change. The key functions typically addressed in CPM solutions include:

Budgeting, forecasting and planning tools to create budgets, forecasts and financial plans with related workflow processes for reviews and approvals. CPM



CPM focused vendors

provide purpose built

solutions that are easy-

to-use and cost

effective.

solutions also provide financial modeling capabilities for integrated profit-and-loss, balance sheet, and cash flow forecasting. By incorporating access controls and audit trails, these applications support management and compliance needs.

Variance analysis to enable companies to view and evaluate differences between planned and actual figures and conduct related root-cause analysis.

Financial consolidation, which allows companies with multiple divisions to reconcile, consolidate, summarize, and aggregate financial data.

Scorecards to measure progress against the goals and objectives set forth in the strategy framework.

Dashboards to visually display summary key performance indicators (KPI), compare them against plans or (in some cases) industry benchmarks, and drill down to bottom-up detail and assumptions.

Financial reporting to produce reports required to deliver financial statements based on accounting results (usually for public companies).

A unified database to provide the flexibility required to connect with existing ERP and BI solutions for integrated analysis and reporting. This means that everyone “stays on the same page” throughout the planning process.

SECTION 3: MID-MARKET CPM SOLUTIONS

Until recently, CPM solutions have been available primarily as part of broader enterprise-class business intelligence (BI) suites. While BI solutions provide CPM functionality, they can be too expensive and difficult for midsize companies to deploy and manage. After all, the average midsize company (defined as businesses with 100 to 1000 employees) has only 4 or 5 IT people, who usually struggle just to keep basic IT infrastructure up and running. However, in the past few years, a few key trends have emerged to help make CPM accessible and affordable for mid-market companies:

CPM-specific solutions. Several vendors have introduced a new class of solutions designed specifically for CPM. These vendors target small and midsize



Companies need to

control costs, manage

risks, improve financial

processes and increase

visibility into planned

versus actual metrics.

companies that can’t absorb the cost or complexity of broader BI suites with CPM applications that are cost-effective and easy to use. Examples of these CPM-specific companies are Adaptive Planning, Clarity Systems, Host Analytics and PROPHIX.

CPM solutions that are part of broad business intelligence (BI) solution, but are also offered and can be deployed individually. This includes companies with broad BI, data warehousing and analytics capabilities like SAP, Oracle, and IBM. These vendors entered the BI space through mergers and acquisitions, and most midsize companies tend to view them as complex and expensive. However, these vendors have recently begun to re-package their solutions to make them more streamlined and work within the constraints of small or midsized companies. For instance, some permit customers to purchase only the modules that meet their immediate requirements, with the option to add additional modules in the future.

ERP companies offering pre-integrated CPM modules. Many ERP solution vendors now offer CPM modules (their own or third-party) pre-integrated with their ERP suites. This reduces the time and difficulty of deploying CPM to work with a customer’s installed ERP system. Examples include Exact Software, Infor, NetSuite, and SAP.

The rise of hosted and software-as-a-service (SaaS)

CPM solutions. These models reduce or remove IT infrastructure and labor costs from the CPM equation, and can dramatically reduce or eliminate upfront capital investments, implementation issues and ongoing maintenance costs associated with customer-premise solutions.

In addition, the current economic climate is driving demands to reduce costs and maximize profits. Companies need to control costs, manage risks, improve financial processes and increase visibility into planned versus actual metrics. CPM solutions provide firms with tools to address these needs, enabling them to improve planning, forecasting, budgeting and to better manage costs, optimize profits and comply with regulatory and auditing requirements. To help midsize companies meet these requirements, vendors have created easier, faster-to-implement and more affordable CPM solutions. Increasing interest and deployment of these solutions by mid-market enterprises is demonstrated by the double-digit growth rates that most of these companies are experiencing.



While SaaS, and to a

lesser extent, hosted

CPM solutions can

provide companies with

clear financial

economies and benefits,

one size does not fit all.

SECTION 4: DEPLOYMENT AND DELIVERY OPTIONS FOR CPM SOLUTIONS Today, CPM solutions are available via multiple deployment and delivery options. These include:

Traditional on-premise deployment. In this model, the customer (and/or a VAR or other business partner) sources, purchases, deploys, runs and manages the CPM solution and required infrastructure hardware and middleware in their data center. They typically purchase a perpetual license from the CPM vendor, and purchase annual support and maintenance contracts. Vendors typically update these solutions every 12 to 36 months, and customers determine if and when they will upgrade. The solutions provide templates to tailor the application to individual needs, and also allow for extensive source code customization.

Hosted software deployment. In this case, the vendor (or sometimes a VAR or other business partner) remotely hosts, implements, runs and manages a dedicated instance of their software for the end-user customer, making the solution accessible to users over the internet (either through a web browser or via terminal services). The vendor takes care of sourcing, integrating, maintaining, and managing the solution along with the infrastructure hardware and middleware required to run it. In some cases, customers still purchase the software license upfront, while in others, the vendor provides leasing or subscription-based pricing to provide the customer with the option to pay for the solution on a monthly, quarterly on annual basis. In most cases, customers can customize source code.

Software-as-a-service (SaaS) deployment. “Cloud” or SaaS solutions are developed ground-up to be delivered via the web in a subscription-based pricing model; customers pay monthly, quarterly or annual subscription fees that cover software, service, management, maintenance and updates. SaaS solutions are architected as a multi-tenant solution, meaning that SaaS vendors can run thousands of customers from a single environment. This shared infrastructure model provides efficiencies of scale that allow SaaS vendors to provide solutions at lower cost than in a dedicated on-premise or hosted model. Because SaaS solutions are designed as services, vendors also provide 24/7 continuous support, and more streamlined “one-to-many” problem resolution—meaning that once they identify and address a bug for one customer, its generally fixed for all customers.



Today’s SaaS solutions (unlike the early days) provide for extensive tailoring via configuration; however, most SaaS vendors do not allow customers to customize the source code.

While SaaS, and to a lesser extent, hosted CPM solutions can provide companies with clear financial economies and benefits—and are becoming an increasingly popular choice—one size does not fit all. For instance, some companies may need specific features or functionality only available in a traditional software option, or have specific regulatory or customization requirements that can’t be achieved via a hosted or SaaS option (see Section 8 for a detailed list of considerations).

SECTION 5: MID-MARKET CPM VENDOR READINESS GRID For this study, we interviewed several mid-market CPM solution vendors as well as mid-market companies that currently use or plan to use CPM solutions. Our analysis takes into consideration:

The insights we received from mid-market CPM customers and prospects regarding their requirements and constraints for deploying and using CPM.

Vendor-provided information about their companies, product capabilities and strategies, and marketing, pricing and channel models and other defined criteria.

Secondary research, including vendor websites and discussion forums, and financial reports.

We compiled the above information into an SMB Readiness Grid that positions and provides directional guidance for mid-market customers. This is not intended as a complete representation of the CPM solution universe, but is representative of the vendors that responded to our inquiry for request for information or vendors that are of interest to larger SMB and mid-market companies.



Figure 1 lists the criteria used to analyze each vendor, and the weighting applied to each criterion. It also indicates our score for each the scoring of each vendor, which we derived from briefings, one-on-one discussions, and secondary research. Each vendor’s score was calculated, and then vendors were ranked on a scale of 1 to 7 to show relative positioning among all of the vendors. These rankings are projected in Figure 2 by the size of the sphere, which is mapped on the X-axis with solution functionality breadth and on the Y-axis with the size of the target customer.

FIGURE 1: MID-MARKET CPM CRITERIA AND VENDOR RATINGS

Criteria Weighing

SAP

Business

Objects

Edge

Host

Analytics

IBM Cognos

Express

Adaptive

Planning

Clarity

Systems

Prophix

Software

LongView

Solutions

Company

Current/Future Strategy 12 3.0 3.5 3.0 3.5 4.0 3.5 3.0

Financial Stability 10 5.0 3.5 5.0 3.0 3.5 3.0 3.0

Growth 8 3.5 4.0 3.0 4.0 4.0 4.0 2.0

Mid-Market Installed Base 5 3.5 3.3 3.0 3.5 4.0 4.0 2.5

Customer Comments 8 4.0 3.0 3.3 4.5 4.0 4.0 3.0

Solutions

Functionality/Breadth of products 15 5.0 2.5 4.0 1.5 3.0 2.3 2.8

Breadth of Delivery Options 9 3.0 3.5 3.0 3.5 4.5 3.0 3.0

Integration Capabilities 5 4.0 4.0 4.0 4.0 5.0 4.0 4.5

Service and Support 8 3.5 4.0 3.0 4.0 4.0 4.0 3.0

Ease of Use 5 3.0 4.0 3.0 4.5 4.0 4.0 3.0

Marketing

Distribution Channels 5 4.0 3.0 3.0 3.0 3.0 4.0 1.0

Free Trial 2 4.0 3.0 4.0 5.0 2.0 4.0 2.0

Pricing Transparency 3 2.0 2.5 2.5 5.0 1.0 3.5 1.0

Marketing Outreach 5 4.0 3.0 3.0 3.0 3.0 3.5 2.0

Ratings on each category is on a scale from (least) 0 - 5 (maximum)

Source: SMB Group, Inc. 2010



Figure 2 illustrates the relative positioning of the mid-market CPM solutions that were included as part of this research study as follows:

The X-axis on this grid represents the scope of solution functionality.

The Y-axis represents the size of the target customer for the solution.

The size of the vendor sphere represents the relative ranking of the vendors and is calculated from the detailed vendor rating criteria and ratings shown in Figure 1.

FIGURE 2: SMB READINESS GRID FOR MID-MARKET CPM SOLUTIONS

SAP BusinessObjects

Edge

IBMCognosExpress

Adaptive Planning

Clarity Systems

Prophix Software

LongView Solutions

Host Analytics

Planning &--------------------------------- CPM/BPM -----------------------------Business Forecasting Intelligence

Solution Scope

Ver

y Sm

all

Bu

sin

ess

1-9

9em

pl.

Larg

eEn

terp

rise

s1

00

0+

empl

.

Targ

et C

ust

om

er

Size

Med

ium

Bu

sin

ess

10

0-4

99

emp

l.)

Mid

-Na

rket

Bu

sin

ess

50

0-9

99

emp

l.

Source: SMB Group, Inc. 2010

(size of sphere represents relative ranking of the vendor for solution and market readiness)



Positioning of vendors on the grid is based on input from vendors and from end-user customer discussions. The size of the sphere represents our view of the relative market attractiveness for that solution scope and target customer size. The sphere’s position on the X-axis represents the breadth of functionality that the vendor provides, while the position on the Y-axis represents the size of the vendor’s core target market for the solution. The vertical arrows for each bubble indicate the range of product suitability to address the needs and constraints of customers smaller and larger than the vendor’s core target market.

SECTION 6: CPM VENDOR MID-MARKET READINESS ANALYSIS

Adaptive Planning

Adaptive Planning provides CPM budgeting, forecasting, and reporting solutions via a SaaS-based delivery model. It has also recently introduced an on-premise model. This vendor targets SMBs, mid-market companies and divisions of large enterprises with easy to use CPM solutions that are affordable and can be deployed in days without any IT support. Adaptive Planning offers three implementation choices: full implementation by Adaptive Planning’s professional services team; QuickStart implementation, in which Adaptive Planning provides training and a block of hours for project design work and the client completes the implementation; and self-implementation, in which the client does all of the implementation work internally. All three of these implementation scenarios are well-represented among Adaptive Planning installed base customers. Typical installations take 2 to 6 weeks. Pricing is very transparent and designed to be affordable for smaller and midsize firms. Prospects simply enter some basic info about the edition they want, number of users, type of users (full or review only), etc. to get immediate pricing details. Strengths:

SaaS option is an affordable, accessible way to use CPM without requiring internal IT staff, infrastructure, and resources.

The on-premise model features many advantages of the SaaS offering--including subscription pricing, rapid implementation, ongoing support and access to new releases.

QuickStart and self-service implementation services and training enable companies to reduce consulting and implementation costs.



Prospects can easily configure and price solutions for their businesses on Adaptive Planning’s web site for an upfront and accurate estimate of costs.

A free trial enables customers to gain a clear understanding of whether or not the solution will be a good fit for their business before they buy it.

Optional automated data integration is available many financials and ERP solutions, making it easier to integrate with these systems.

Strong partnerships with SaaS financials vendors Intacct and NetSuite.

Customers very pleased with the benefits and TCO they are getting from this solution.

Weakness:

Does not include functionality that some companies require, such as score carding and financial consolidation that larger companies may require.

Provides configuration flexibility but cannot be customized to the extent of on-premise solutions.

Clarity Systems

Clarity Software targets large and mid-market organizations that want to improve their budgeting, planning, consolidations, dashboards, score carding and management reporting processes with its unified, web-based solution. Clarity Systems delivers CPM and related solutions via a traditional on-premise model and through a dedicated hosting model. Most of Clarity’s 40,000 end-users run the solution on-premise. Clarity offers customers unified licensing so that they can start with the core CPM function, and then add on additional functionality as required. The solution also automates external reporting processes to support the production of regulatory and statutory reports. Clarity sells primarily via direct sales in North America, the U.K. and Europe, ad with partners as a secondary channel. In Asia Pacific, Middle East, South America and Eastern Europe, Clarity sells exclusively through partners. Clarity’s worldwide revenues grew 38% year-over-year in 2009. Strengths

Proven enterprise-class CPM solution.

Strong year-over-year growth

Offers both on-premise and on-demand deployment options.

Clarity FSR, an automated external reporting solution, can be added to the core solution to improve efficiencies in the external reporting process. It can output to multiple formats, including XBRL to streamline financial reporting and compliance.



Offers an unlimited use license option so customers don’t have to worry when they add additional users.

Custom reporting capabilities can be used by finance and LOB without involving IT.

Supports multiple industry standard OLAP databases, and multiple industry-standard relational databases.

Strong growth rate. Weakness:

Reliance on direct sales and implementation services in North America will impede growth and ability to sell into the core mid-market.

Pricing isn’t as transparent as some other vendors, hindering consideration in the lower end of the market.

Well suited to the high end of mid-market business and larger companies, but tends to be too costly and involved for most companies with less than 500 employees.

Host Analytics

Host Analytics offered its corporate performance management (CPM) solution for seven years via both on-premise and hosted deployment models. In 2008, Host Analytics decided to pursue a multi-tenant, annual subscription SaaS model instead. Since then, it has migrated about 90% of prior customers to the SaaS offering. Currently, it only offers the SaaS model. Host Analytics’ CPM portfolio includes budgeting, forecasting, financial consolidations, dashboards, score carding, reporting, and analysis. Pricing is by module and is approximately $100 per module per user per month. The solution features “smart templates” that enable users to see how calculations are created via an Excel-like front end. The modeling functionality allows for bottom up, top down and middle out modeling. External content can be brought into the system for planning and benchmarking. Host Analytics customers are in the upper medium, mid-market and large enterprise space, with annual revenues ranging from $100 million to $1 billion. 99% of the vendor’s current focus is on North America. More than 120 accounts use the solution, which typically takes 6 - 8 weeks to implement. The vendor partners with several financials and ERP vendors, including NetSuite, Oracle and Microsoft on the technology side, and works with regional system integrators (SIs) for consulting and implementation. Strengths:

Experienced team that with a strong understanding of upper mid-market companies and larger enterprises CPM needs.



SaaS based delivery model can provide TCO advantages compared to on-premise solutions.

Broad set of CPM functionality including score carding and financial consolidation.

An attractive offering for upper midsize companies that want to deploy rapidly and cost-effectively.

Can be implemented via remote consultants (lowering implementation costs)

Weakness:

Focus on the upper mid-market and large enterprise, but not cost-effective for most true SMB customers.

Lack of on-premise option may exclude Host Analytics in accounts where SaaS is not an option.

Does not currently offer free trials, and pricing is not available on the web site (however they indicate they fully disclose pricing when asked) which can hinder consideration.

IBM Cognos Express

IBM launched Cognos Express in 2009 as an integrated business intelligence (BI) and planning solution purpose-built to meet the needs of midsize companies. It delivers the essential reporting, analysis, dashboard, scorecard, planning, budgeting and forecasting capabilities geared to midsize companies’ requirements and budget constraints. Cognos Express is designed for companies with no or limited BI skill, and IBM positions it as an integrated reporting, analysis and planning solution for mid-market companies. Cognos Express is currently available as an on-premise solution only. Cognos Express is available as three modules, which can be purchased separately. Cognos Xcelerator enables Excel-based planning and business analysis; Cognos Express Reporter helps users build reports and perform ad-hoc queries; Cognos Express Advisor connects to operational data so that users can perform analytics and create interactive report and dashboards, and offers visualization tools to create reports for presentation purposes. Pricing depends on the number of users and the number of servers used to run it. Each module requires a $10,000 per connector fee, plus per-user fees, which run from $500 to $1,000. Channel partners lead in sales and delivery for Cognos Express. Since it was introduced, mid-market awareness has been growing, but IBM admits that it needs to accelerate this. Strengths

Pre-configuration of features and tools (such as OLAP cubes and security) allow



Cognos Express can be deployed with far less customization and fine tuning, and with less or even no reliance on IT.

Pre-configuration also cuts down on deployment time, allowing users to get productive more quickly.

The solution is designed with an Excel-like look and feel, which reduces training and speeds adoption.

In-memory, OLAP engine strengthens performance and analytics capabilities.

Strong integration with Excel.

Affordable for the upper midsize businesses.

Financing from IBM Global Financing is available and rates are attractive--off-setting the lack of a SaaS option to some degree.

Rapidly expanding VAR and SI partnerships should help IBM Cognos Express accelerate sales and increase market share.

Strong IBM brand and deep pockets enable IBM to invest here for the long haul. Weaknesses:

Cognos Express was introduced to market in fall of 2009 and IBM is still ramping up market awareness for the solution.

Cognos Express offers core CPM functionality, but is positioned more as a BI solution than a CPM solution. This is likely to hinder consideration by CPM buyers, who may not be aware of the CPM capabilities and/or reluctant to buy a more comprehensive BI solution.

Lack of an on-demand or hosted version in the CPM area precludes it from consideration by SMB customers that want or need this option because they don’t have resources to run it in-house.

IBM needs a stronger distribution channel to more effectively tap into the SMB market opportunity.

Longview Solutions

Longview Solutions is a division of Exact Software, which operates in 40 countries. Longview offers fully integrated performance management platform that facilitates real-time financial and operational planning, budgeting, forecasting, consolidation, and related tax processes utilizing one central data source. Longview CPM is an on-premise application, targeted at the higher end of mid-market and large companies. (Note: Longview’s tax provisioning and planning solutions are primarily provided to customers via a hosted delivery model—dedicated virtual instance—giving Longview the know-how to provide CPM in a similar fashion as market requirements change). Most customers are global companies with fairly complex requirements, and locations in multiple geographies. About 10% of its customers are



smaller companies that have more complex logistical or data challenges than their counterparts. Longview Solutions are licensed by process, not by number of users, hardware platform, etc. The five processes include: consolidation; planning, budgeting and forecasting; tax; profitability analytics; and learning. There is no restriction as to number of users. New

releases and new versions are provided to customers who are current on maintenance. Longview employs a direct model to sell, implement, and support it customers, boasting one point of contact from inception to completion, and it indicates it has a customer retention rate of more than 95%. Strengths

Longview solution has strong breadth and depth across all aspects of CPM.

Only CPM offering that addresses tax provisioning and planning

Strong rating for customer satisfaction and retention.

Longview has been rated highest for performance and scalability among CPM vendors

The solution integrates with more than 300 source systems via the Longview Integration Suite.

Weaknesses:

Currently lacks a hosted or SaaS version of CPM, precluding it from consideration by companies that are interested in this deployment model.

Recent year-over-year growth of CPM revenues lags that of most competitors.

Lacks a channel to service the core mid-market, which is likely to hinder its future growth.

Pricing information is not readily available on the Longview web site.

PROPHIX Software

PROPHIX Software provides solutions designed to automate financial processes including budgeting, planning, reporting, analysis, and performance management for SMBs, mid-market businesses, and divisions of large corporations. The solutions are currently available as on-premise offerings only. PROPHIX will interface with applications utilizing OLAP or ODBC via a number of database connections. PROPHIX pricing is based on a named-user pricing model. PROPHIX offers several versions of its CPM suite: PROPHIX Express (targeted at the lower mid-market), a pre-packaged solution designed for smaller companies with up to $10M in revenues and 1 to 5 users, starting at $3,000 for a single user; PROPHIX Performance Management (targeted at the upper mid-market and enterprises with pricing starting at $7,000 for the



base system and an additional charge of $750 for a standard user (with Online/Offline access to the system) and $250 for a basic reporting user; and PROPHIX Consolidations for mid-market companies with multiple entities. The company also offers PROPHIX G/L Reporter for analysis and reporting as part of the Performance Management solution or as an add-on. PROPHIX sells its solutions directly to customers and provides consulting and implementation services. The vendor has more than 1,700 customers around the globe. PROPHIX has started to partners to sell and implement solutions for the core mid-market; they have 26 partners in North America. Outside the North American PROPHIX primarily sells through indirect channels in Europe and Asia. Strengths:

CPM solutions and price points designed to span from $1 million to $1 billion company requirements and budgets.

Familiar spreadsheet interface.

Strong breadth of CPM functionality.

PROPHIX solutions integrate with Microsoft Office and SharePoint.

Expanding North America channel program to reach deeper into the core mid-market with partners ranging from referral partners through to sales and implementation, including some with focus on vertical industries.

PROPHIX is expanding its sales and implementation channel to broaden its global reach.

Weakness:

Lacks an on-demand or hosted version in the CPM area, precluding consideration by customers requiring this delivery option.

Pricing information is not readily available on the PROPHIX web site.

SAP BusinessObjects Edge

SAP BusinessObjects Edge solutions are designed for companies with 100 to 2,500 employees that want affordability, ease of use and fast time to value. Offerings include a full range of business intelligence capabilities as well as packaged applications for budgeting, planning and forecasting, financial consolidation and reporting, strategy management, segregation of duties access controls, and global trade services. BusinessObjects Edge Planning and Consolidation provides planning, budgeting, consolidation, and reporting functionality. As part of the BusinessObjects Edge portfolio, SAP also offers Business Objects Edge Business Intelligence and BusinessObjects Edge Strategy Management for scorecard functionality.

http://www.prophix.com/solutions/reporting-software/



SAP also offers optional QuickStart BI Packs, designed to provide customers with rapid insight into data stored in existing applications, and prebuilt industry or department-specific reports and dashboards. SAP sells BusinessObjects Edge via a traditional licensing model and delivers it in an on-premise model. Pricing starts at roughly $10,000 for a 10 named user license. SAP also offers concurrent access licensing options. The vendor indicates that most customers go live within 4 to 8 weeks. The solution is available in 12 languages. While SAP doesn’t break out growth rates for BusinessObjects Edge, Business Objects has enjoyed 57% year-over-year growth. BusinessObjects Edge has seen good traction with both SAP ERP customers and non-SAP customers. The company recently announced a free personal use version of BI On-Demand, designed to boost interest among the vast majority of SMBs that don’t yet use any BI solution. This should also provide a good feeder channel for BusinessObjects Edge. Strengths:

On demand demo and free trials are available.

QuickStart Packs offer best practices guidance to companies that may not have BI expertise in house.

Broad portfolio of solutions--customers can start with CPM, and augment with additional BI functionality as needed.

Strong Business Objects VAR channel, which SAP is further extending to global markets.

Increasing exposure to and opportunity in SAP Business All-in-One customer base due to strong synergies between these solutions.

Provides both CPM functionality and supply/demand operational management capabilities, which can fill both financial planning daily operations management requirements.

Very positive customer comments on benefits and TCO of this solution. Weakness:

Lacks an on-demand or hosted version in the CPM area, precluding consideration by customers requiring this delivery option.

Pricing information is not readily available on the SAP web site.

SECTION 7: ADDITIONAL GUIDANCE FOR MID-MARKET CPM DECISION MAKERS

Effective corporate performance management requires more than software. In addition to evaluating different CPM vendors and their solutions, mid-market decision makers



In addition to

evaluating different

CPM vendors and their

solutions, mid-market

decision makers need to

assess their own

internal requirements

and constraints to select

the best-fit option for

their businesses.

need to assess their own internal requirements and constraints to select the best-fit option for their businesses. For a successful outcome, key stakeholders must be on board. Buy-in from key executives, including the CEO and CFO and/or finance director is critical, and early involvement and input from these stakeholders and others that will be using the solution is essential. Providing information and education to illustrate how CPM can provide better visibility into corporate KPIs (Key Performance Indicators) will help get people engaged in the process. A needs assessment should identify key goals and desired outcomes to help scope solution requirements. This will also help narrow the list of alternatives to evaluate--from basic CPM to offerings that include consolidation to comprehensive BI suites. Based on in-depth discussions with mid-market CFOs and CIOs that have evaluated, selected and implemented CPM solutions over the last couple of years, here are our recommendations for other key factors that each company should assess:

Do you want a focused, purpose-built CPM solution, or CPM that part of a broader business intelligence solution? Solutions designed specifically for corporate performance management (such as Adaptive Planning, Clarity Systems, PROPHIX, Longview and others) are typically more cost-effective and faster to deploy than broader business intelligence suites, which often include a CPM component. However, vendors with broad based BI solutions, such as IBM Cognos and SAP Business Objects, offer CPM-specific modules that integrate with the broader suite. Consider both short and long term requirements in deciding which route will best serve your firm’s needs.

What other solutions does CPM need to integrate with? In all likelihood you will want to integrate financials and ERP solutions--and possibly other BI solutions--with CPM. Many ERP vendors offer pre-integrated CPM modules, and many standalone CPM vendors have done the work to pre-integrate their offerings with popular financials and ERP solutions. Ascertain whether or not the CPM solutions you are considering offer pre-built integration to your existing solutions and how much time and effort are necessary to integrate them.

When do you need to have the solution up and running? Most mid-market enterprises do not have months to spend deploying and getting productive with



CPM—they often need it operational for the next budgeting cycle. Talk to customers already using the solutions you are considering to get an accurate, realistic picture of how long it will take.

What IT resources do you have internally or available via a third-party to implement, support and manage the CPM solution? Do you have internal resources available to take on this new responsibility, or will you need to seek third-party assistance to deploy the solution, provide on-going support, updates and management? For companies that lack the internal resources to take on this role, SaaS or hosted CPM is likely to be a better option than trying to hire or contract for these tasks.

What is the pricing and total cost of ownership (TCO) for the CPM solution? Consider not only software and subscription costs but any resources required to design, implement, configure and manage these solutions (including annual maintenance fees), and the hardware necessary to run them over a four or five year period. Look for transparent vendor pricing help you calculate capital and operating expenses and determine how they will map to your budgeting requirements and process without getting blindsided by hidden costs. Many vendors provide pricing calculators to assist with this. Also consider multi-year contracts, which offer a discount. Many midmarket buyers are considering software-as-a-service (SaaS) or cloud-based CPM solutions that offer subscription-based pricing because they eliminate the need for upfront capital investments, don’t require on-premise infrastructure, or internal IT support or maintenance, often resulting in reduced TCO.

What are your data security requirements? Security is a top concern for all companies, and in some industries, regulatory requirements also come into play when considering a CPM solution. In some cases, specific compliance constraints require companies to deploy on-premise solutions. However, a quality SaaS provider that is SAS-70 compliant and can readily document the physical and virtual security measures can provide better, more secure and more reliable operations than an internal IT department.

Who will be using the CPM solution? What will be the split between heavy and casual users? The number and type of CPM users—full users and review users—can vary greatly from company to company depending on company size, process complexity, management culture, planning philosophy, etc. Many CPM vendors provide different pricing options for full users versus review users, and pricing will vary significantly as the ratio between these changes.

Where will CPM users be located, and how will they access the solution? Will users be accessing the solution from multiple locations, remote offices, or while on



the road? If so, you need to determine what (if any) additional work will be necessary to provide them with access to the solutions you are evaluating, and look for solutions that provide web-based access and user self-service.

How much time and money is the company willing to invest in training users to become productive with the solution? Corporate cultures and individual tolerance for getting up to speed on new solutions vary wildly. Ideally, CPM solutions should have an interface with a familiar spreadsheet look and feel. You should be able to easily configure the interface and dashboards without help from IT or external consultants, and building models should be intuitive. And, when users can easily create and run reports themselves, they get the key performance indicators (KPIs) and other information they need more quickly, helping to speed and improve decision-making.

How heavily will I need to customize the solution, and how much can I spend on it? As discussed in Section 4, most SaaS applications are tailored via configuration, not source code customization. In contrast, traditional software can be extensively customized at the source code level—but will require additional investment as well.

SECTION 8: SUMMARY AND CONCLUSIONS

Streamlining and optimizing CPM processes and results is becoming a strategic imperative for midsize companies as they strive to improve financial agility and establish competitive market advantage. By replacing spreadsheets with CPM solutions, companies can:

Decrease the time it takes to set up and maintain budgets and forecasts.

Improve participation, collaboration and visibility into the process, by providing a consolidated unified and accurate view of the planning process.

Reduce errors through built-in audit trails that help detect mistakes or omissions.

Gain agility and flexibility, as CPM helps companies to more readily identify when actual performance is diverging from goals, collaborate on remedial action.

Produce more timely and accurate analysis and reports by dramatically reducing time and labor intensive manual consolidation and reporting efforts required with spreadsheets, making it easier to input and access more detailed drill down information.



Today, more CPM solutions are available that are specifically designed to meet mid-market requirements than in the recent past. However, vendors’ definition of the “mid-market” varies widely from vendor to vendor—and so do pricing, solution capabilities and deployment options.

Companies need to carefully evaluate how well different mid-market CPM solutions map to their unique corporate requirements and constraints. Fortunately, most vendors provide easy access to demonstrations, pilots, proof of concepts, and/or free trials to help companies try before they buy—or at least get a good idea of whether a solution will work for them. Advisors, such as third-party value-added resellers (VARs), system integrators (SIs) and consultants can also help guide companies in the evaluation and selection process.

By taking the time upfront to conduct a thorough internal needs assessment and external vendor evaluation, mid-market firms will be well-positioned to select the CPM solution best-suited to their corporate needs—and reap the benefits of a more connected, productive and efficient planning process.



APPENDIX A: SMB READINESS GRID METHODOLOGY

The SMB Readiness Grid is a graphical representation of solutions for the small and medium business segment for a specific solutions area. It represents market conditions at the time of development of the report. Vendors are selected based on SMB market presence and fit. We assess vendors based on a specific set of criteria and weighting of each of the criteria items indicated on Figure 1. Ratings are determined through:

Briefings and one-on-one discussions with vendors

Information from vendor websites and discussion forums

Publically available company and financial information

One-on-one interviews and discussions with end-users

Ongoing secondary market research Information for each vendor is complied and calculated as a numerical score from 0-5 for each criterion (0 representing the lowest score, 5 representing the highest score). In some cases where information was unavailable or insufficient, we assigned an average score of 3. Each vendor was provided with a summary of their ratings and positioning on the grid, and asked to review and provide input before the final results were complied for this report. Once all vendors’ ratings were calculated and finalized, vendors were ranked on a scale of 1 to 7 to show their relative positioning. These ratings are illustrated in Figure 2 by the size of the sphere, which is also mapped to the breadth of solution functionality on the X-axis, and size of the target customer on the Y-axis. This represents analysis by the SMB Group based on defined criteria and is intended to provide directional guidance. This is not a representation of the complete universe on vendors that address this market but representative of the vendors that responded to our requests for information and relevant information we obtained from public sources.



APPENDIX B: DEFINITIONS OF SMB READINESS GRID CRITERIA

Included below are more detailed definitions of the SMB Readiness evaluation criteria. Evaluations are based on both objective data (such as publicly reported financial information, product information, etc.) as well as qualitative information obtained from vendor briefings and customer interviews.

Company:

Current/Future Strategy. Vendor focus and track record in the mid-market, including ability to understand current and future market needs of midsize companies; the management team’s experience in the mid-market segment; and their ability to execute to plan.

Financial Stability. Vendor overall financial health and ability to invest in product innovation and market expansion.

Growth. Assessment of growth based on revenue growth and customer acquisition in the mid-market based on public information when available, and our estimates when not available.

Mid-Market Installed Base. Size of current mid-market installed base relative to overall installed base.

Customer Comments. Indicates customer perceptions of their experience with the solution and services from initial engagement through ongoing support based on one-on-one customer discussions.

Solutions:

Functionality/Breadth of Products. Breadth and functionality of core mid-market CPM products and services. If the vendor provides broader business intelligence solutions beyond core CPM, it also considers if the vendor provides options for flexible, modular purchase and deployment, or requires customers to buy everything upfront.

Delivery Options. The degree of choice the vendor provides in terms of deployment options: on-premise, hosted (dedicated instance) and multi-tenant Software-as-a-Service (SaaS).



Integration Capabilities. Availability of prebuilt connectors, integrations and APIs to help to reduce cost and time required to integrate with existing ERP systems.

Service and Support. Vendor capability to (directly or through a partners) provide consulting services, initial implementation support, and ongoing support (onsite and remotely).

Ease of Use. Based on one-on-one interviews, customer perceptions of ease of use.

Marketing:

Distribution Channels. Breadth and depth of channel capabilities (direct, VARs/SI, OEM sales, etc.) to reach and serve mid-market companies.

Free Trial. Considers whether the vendor offers a free trial to help prospects easily try the solution to determine if it will be a good fit.

Pricing Transparency. How easy or difficult is it for a prospect to obtain basic pricing information from the vendor web site.

Marketing Outreach. Vendor ability to provide a clear and compelling message to mid-market companies about solution positioning, differentiation, etc. via websites, promotional materials and seminars.

SMB Group representation

The SMB Readiness Grid is a representation of the subset of the available vendor solutions and strategies

at a specific time period during which we conducted the study. It represents the SMB Group analysis on how

these vendors measure against the defined criteria defined by the SMB Group. The SMB Group does not

endorse any vendor, product or business models depicted in this SMB Readiness Grid, and do not advise

SMB and mid-market users to select products based on this analysis, it does our views based on our

analysis. This is intended solely as a research tool and is meant to only provide directional guidance. The

SMB Group disclaims all warranties, express or implied, with respect to this research, including any

warranties of merchantability or fitness for a particular purposes.



SMB GROUP, INC.

The SMB Group focuses exclusively on researching and analyzing the highly fragmented “SMB market”—which is comprised of many smaller, more discrete markets. We take a custom approach to working with clients, assessing where you are in the market today, and the steps you need to take to get where you want to be tomorrow. Our pragmatic, actionable research approach provides you with insights and recommendations you need to capitalize on shifting market requirements and trends, and create successful go-to-market outcomes. We also work closely with your marketing team to help integrate key findings and deliverables into your marketing and media outreach campaigns to boost market awareness and consideration of your offerings.

http://www.smb-gr.com/

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