Performance Management Solutions Analyst(s): · PDF filePerformance Management Solutions Published: 26 September 2016 Analyst(s): Christopher Iervolino, John E. Van Decker ... Anaplan

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Critical Capabilities for Strategic CorporatePerformance Management SolutionsPublished: 26 September 2016

Analyst(s): Christopher Iervolino, John E. Van Decker

IT leaders for corporate performance management — and financeexecutives — will find that the strengths of strategic CPM vendors varysignificantly based on the processes and use cases supported by eachproduct. Use this research to help assess vendor offerings.

Key Findings■ The offerings covered in this research vary in terms of complexity, pricing, planning processes

supported, broader modeling and analytics capabilities, customer satisfaction withimplementation, ease of use, integration, maintenance/upgrade and ongoing support, as well asenterprise scalability and typical customer size.

■ The ability for each solution to support complex financial budgeting, planning and modeling ishighly important, but usability and product satisfaction also have a major impact on determiningthe business value each solution provides.

■ A growing number of the midsize and large organizations requiring complex financial budgetingand planning process support are also demanding improved ease of use, integrated financialplanning and modeling capabilities.

Recommendations■ Examine the five use cases to determine which best describes your organization, then review

the scores for the critical capabilities that relate to your potential use of strategic corporateperformance management (SCPM) solutions.

■ Consider the top vendors (four to seven maximum) for these capabilities as strong candidatesfor further review as part of a comprehensive evaluation and selection process.

■ Use this research in conjunction with the companion Magic Quadrant, and develop a "specificrequirements" document that identifies your functional needs and objectives.

■ Do not be restricted to your incumbent vendor if its offerings fail to fulfill your needs in certainareas. To meet your requirements, consider solutions from other vendors to augment what's in

place and evaluate them over time to determine the degree to which they can capably supportadditional strategic SCPM processes.

Strategic Planning AssumptionBy 2020, 40% of large organizations will extend or complement existing financial planningcapabilities with domain-specific modeling and planning solutions.

What You Need to KnowThis Critical Capabilities report covers functionality and releases described in the 2016 "MagicQuadrant for Strategic Corporate Performance Management Solutions" and the time frames forproduct releases and survey responses used for that document. Developments made since thattime in specific vendor products may be described in this document; however, the main source forthe analysis for this report was the companion Magic Quadrant.

The office of finance requires budgeting, planning and modeling solutions that facilitate more-transparent, collaborative processes while supporting a strategic focus. This need can be brokendown into several critical capabilities that SCPM solutions must satisfy. These factors affect therelative importance of the critical capabilities for each use case described in this document.

They include:

■ Financial Budgets and Plans

■ Complex Financial Budgets and Plans

■ Integrated Financial Planning, Modeling and Analytics

■ Integration

■ Ease of Implementation

■ Ease of Use

■ Ease of Maintenance/Upgrade

■ Support and Vendor Satisfaction

■ Enterprise Scalability

The degree to which each of the above capabilities is important varies by use case.

The use cases described in this research are:

■ Small Organization: Small public or private organization with less than $250 million in annualrevenue

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■ Midsize Organization: Midsize public or private organization with $250 million to $1 billion inannual revenue

■ Midsize/Large Organization: Midsize to large public or private organizations with $1 billion to$3 billion in annual revenue

■ Large Organization: Large public or private organizations with more than $3 billion in annualrevenue

■ Business Unit: Individual business units within large organizations

The office of finance must also support financial accounting processes (such as the corporatefinancial close, financial reporting and consolidation), and other processes described withinGartner's definition of enhanced financial control and automation (EFCA) processes.

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Analysis

Critical Capabilities Use-Case Graphics

Figure 1. Vendors' Product Scores for the Small Organization Use Case

Source: Gartner (September 2016)


Figure 2. Vendors' Product Scores for the Midsize Organization Use Case



Figure 3. Vendors' Product Scores for the Midsize/Large Organization Use Case



Figure 4. Vendors' Product Scores for the Large Organization Use Case



Figure 5. Vendors' Product Scores for the Business Unit Use Case



Vendors

Adaptive Insights

Adaptive Insights is a SaaS vendor that provides solutions for budgeting, forecasting, dashboards,modeling, performance reporting, analysis and collaboration. It has offerings for complementaryintegration (Adaptive Integration), Microsoft Office connection (Adaptive OfficeConnect) and revenueplanning (Adaptive Revenue Solution).

Adaptive Insights received high scores for all ease-of-use capabilities, support/overall vendorsatisfaction, and financial budgets and plans; these are important for small and midsize businessesas well as individual business units within larger organizations. Most (68%) of the vendor's surveyrespondents had less than $1 billion in revenue, and about half (48%) had fewer than 50 users (theyhad a mean of 123 users). Of Adaptive's respondents, 32% reported an average annual revenue ofover $1 billion; however, 28% had over $3 billion.

These results, and Gartner client discussion, indicate that Adaptive Insights is used less often forcomplex financial budgets/plans and large integrated financial planning or modeling needs.Although the vendor does have large customers, these use cases are typically not enterprisewide.The company does, however, provide an attractive combination of cloud, ease of use, customersatisfaction and consumable analytics that have allowed it to expand in some customer examplesto hundreds and even thousands of users.

Anaplan

Anaplan is a SaaS vendor headquartered in San Francisco, California. Anaplan provides a SaaSplanning and performance management platform for finance and other business functions. Itsproducts support financial planning and forecasting, as well as planning for sales, capitalexpenditure, operations, workforce, marketing, and supply and demand.

Anaplan received high scores for complex financial budgets/plans, integrated financial planning(IFP), modeling and analytics, and ease of maintenance/upgrade. This combination of criticalcapability scores is important for midsize and large organizations, as well as business units withinlarger organizations. Gartner survey results and customer discussions indicate that Anaplan is mostappropriate when there is a combination of a sophisticated processes (for example, highdimensionality, a large number of detailed business rules and large amounts of data) in combinationwith the flexibility and ease of use required for business users who want to maintain their ownsolutions (in such instances, although the need for IT support may be minimal, IT governanceoversight is recommended).

Anaplan's lowest scores were for ease of implementation, where survey results partially reflectedthe characteristics of the vendor's target market (larger organizations with more-complex usecases). Gartner's customer interactions indicate a common usage in business units anddepartments of larger organizations, as well as wider enterprise use. Of our respondents, 46% hadover $1 billion in annual revenue and 30% had over $3 billion.


Only 27% of Anaplan respondents had more than 200 users (11% had over 500 users). Severalexamples with high numbers of users meant there was a mean of 334 users. These results, alongwith feedback received during Gartner client discussions, indicate an initial tendency for Anaplan tobe adopted for a specific process, often within a business unit or department, as opposed to anenterprisewide process. Anaplan also has a noteworthy number of customer examples in which thesolution has expanded to enterprisewide use.

Axiom Software

Axiom Software, a division of Kaufman Hall, has customers across multiple industries, but focuseson specific industries, including healthcare, financial services, higher education and manufacturing.The product supports planning and budgeting, capital and workforce planning, strategymanagement, cost management, and profitability modeling. Its solutions are available both on-premises and through the cloud, making use of Microsoft Azure. Axiom's platform supportsplanning and budgeting with unique, industry-specific capabilities (such as cost accounting anddecision support for healthcare, and funds transfer pricing for banking).

Axiom received high scores for supporting complex financial budgets and plans, integration, andnearly all ease-of-use categories. These capabilities are applicable for organizations over $1 billionin revenue as well as business units in larger organizations. Axiom's lowest score was for simplerfinancial budgets/plans, as its use cases in this area tend to be more complex.

The size of the vendor's survey respondent base was balanced between midsize and largeorganizations. 50% of Axiom EPM's respondents had an average annual revenue of over $1 billion,40% had over $3 billion in revenue. Of our Axiom Software respondents, 30% had over 200 users(15% had over 500 users) with a mean of 426 users per customer. These results, along withfeedback received during Gartner client discussions, indicate a tendency for Axiom to beimplemented alongside a strategic finance initiative. For large organizations, this tended to occurmore often within a business unit or specific geography, although Axiom has a noteworthy numberof larger customers using its solution enterprisewide to align business units more closely to widerstrategic initiatives.

Board International

Board International takes an integrated approach to SCPM and business intelligence (BI). Board'ssolutions target both midsize and large organizations looking for a more-cohesive approach toplanning, modeling, profitability analysis and performance reporting. Board can also supportgranular business processes that tend to require more-frequent application updates from businessusers. Its solutions are available both on-premises and through Board Cloud using Microsoft Azure.

Board received high scores for complex financial budgets and plans, IFP/modeling/analytics,integration, and ease of implementation. These capabilities are applicable for organizations over $1billion in revenue as well as business units in larger organizations.

The company had a mean of 204 users per customer; 26% of implementations had over 200 users.These results, along with feedback received during Gartner client discussions, indicate the ability tosupport a high degree of process complexity, both in midsize and large organizations (58% of


Board's survey respondents had less than $1 billion in annual revenue, 31% had an average annualrevenue of over $1 billion, with 22% over $3 billion). Board supports complex use cases withinlarger organizations (over $1 billion); however, these tend to be related to financial modeling andanalytics as opposed to support for enterprisewide processes.

Corporater

Corporater provides a configurable business management platform that places the key functions ofanalytics, planning, and execution within a business framework. It supports planning, strategymanagement, analytics, budgeting, dashboarding, scorecarding, KPI management, web anddocument reporting, portfolio management, and governance, risk and compliance requirements.Corporater supports the visualization, evaluation and reporting of strategic, tactical and operationalperformance in real time throughout an organization. Corporater can be used as either a primary orcomplementary solution for budgeting and planning. It provides a unique approach usingconfigurable model objects to support business frameworks, link the planning process to businessoutcomes, and manage strategy. Corporater can also be delivered as a SaaS solution via AmazonWeb Services.

Of Corporater's survey respondents, 42% were in the government sector (split evenly betweenlocal, regional, national and international), 29% had an average annual revenue of over $1 billion,and 24% over $3 billion. The company had a mean of 216 users per customer, and 30% of itsimplementations had over 200 users. These results, along with feedback received during Gartnerclient discussions, indicate the vendor's ability to support a high degree of process complexitywithin its business framework approach. Corporater is increasingly supporting more-complex usecases within larger organizations, particularly for government and commercial organizationstargeting particular business frameworks and/or strategy management initiatives that have a widerscope than the more-traditional database- and analytics-oriented financial budgeting, planning andmodeling capabilities scored in this study.

Host Analytics

Host Analytics is a SaaS vendor whose Cloud EPM platform supports budgeting, planning,forecasting, dashboards, modeling, analysis and collaboration. The vendor's planning and modelingmodules support a variety of use cases, such as revenue, sales and long-range planning. HostAnalytics' technology partners include Microsoft, Qlik (for data discovery and analytics), Dell Boomi(for data integration) and Box (for enhanced data load functionality).

Host Analytics received high scores for all ease-of-use capabilities. It also received strong scores forfinancial budgets and plans, as well as corporate planning and modeling. This combination ofratings is important for small and midsize businesses, but also benefits individual business unitswithin larger organizations. Thirty percent of Host Analytics respondents had an average annualrevenue of over $1 billion with only 11% over $3 billion. Usage in larger organizations tends to focusexclusively on the office of finance; of the customers surveyed, about half (47%) had less than 50users and only 9% of respondents had more than 200 (a mean of 99 users), although the vendorhas some deployments with thousands of users. Survey results, along with feedback receivedduring Gartner client discussions, indicate the vendor's ability to support higher degrees of process


complexity, mostly within small and midsize organizations (58% of survey respondents had lessthan $1 billion in annual revenue).

IBM

IBM's offerings in this sector include both on-premises (IBM Cognos TM1) and cloud (IBM PlanningAnalytics) solutions for budgeting, forecasting, dashboards, modeling, advanced analytics,collaboration and strategy management. In addition, Cognos Command Center facilitates processautomation on-premises, in the cloud, or across both. IBM also offers IBM Cognos ExpressPerformance Management User for midsize companies.

IBM received high scores for complex financial budgets/plans, IFP/modeling/analytics andenterprise scalability. These capabilities are primarily applicable for large organizations. Of IBM'ssurvey respondents, 65% had an average annual revenue of over $1 billion, with 45% over $3billion. IBM's Planning Analytics solution provides greater overall ease of use, as well new dataexploration and predictive capabilities. However, this product was not included in these ratingsgiven its recent release. IBM's lowest scores were for ease of maintenance and upgrade as CognosTM1 requires a high degree of specialized knowledge to configure and implement compared tonewer SCPM solutions (especially those based in the cloud) in this study.

Of IBM's respondents, 42% had over 200 users, 17% had over 500 users, with a mean of 387 usersper customer. These results, along with feedback received during Gartner client discussions,demonstrate IBM's ability to support larger organizations for complex planning, modeling, analyticsand process support needs, especially where high degrees of customization are desired andimplementations are more IT focused.

Jedox

Jedox offers an integrated BI and SCPM platform in the cloud or on-premises. It supportsbudgeting, planning and forecasting, including write-back and extraction, transformation andloading (ETL). Jedox enables business users to model, analyze and report without specialisttechnical knowledge. It can use either a Microsoft Excel or a Jedox web spreadsheet interface, andit offers both web and mobile clients. The vendor's on-premises solution can be configured to usethe graphics processing units of specialized hardware for performance beyond the capabilities oftraditional in-memory technology.

Nearly all (95%) of Jedox's respondents had less than 200 users, with a mean of 93 users percustomer. These results, along with feedback received during Gartner client discussions, indicateease of use, strong compatibility with Microsoft Excel and low total cost of ownership as underlyingfactors supporting Jedox's use by small and midsize organizations, as well as individualdepartments/business units within larger ones. Jedox is typically not used by larger organizations asan enterprisewide solution. As a result, this vendor's lowest scores were for complex financialbudgets/plans and enterprise scalability.


Longview Solutions

Longview Solutions and arcplan were merged in March 2015 and their offerings further unified. Thiscombination provides additional finance and operational analytics for Longview customers/prospects and additional planning and process support for arcplan customers/prospects.

Longview received good scores for complex financial budgets and plans, IFP/modeling/analytics,and integration. These capabilities are important for both midsize and large organizations. OfLongview's customer respondents, 73% had an average annual revenue of over $1 billion (40%over $3 billion); 41% of Longview's respondents had over 200 users, 26% had over 500 users (18%over 1,000 users), with a mean of 703 users per customer, although this includes users for non-SCPM processes such as tax planning. These results, along with feedback received during Gartnerclient discussions, demonstrate Longview's ability to support larger organizations for complexplanning.

Oracle (On-Premises)

Oracle's on-premises SCPM offerings include Oracle Hyperion Planning, Oracle HyperionProfitability and Cost Management, Oracle Hyperion Strategic Finance, Oracle Scorecard, andOracle Strategy Management.

Oracle Hyperion Planning received high scores for supporting complex financial budgets and plansas well as for modeling. These capabilities are primarily applicable for large organizations thatrequire a high level of configurability and can provide the IT resources to support it. Oracle's lowestscores were for Hyperion Planning's ease of implementation, ease of maintenance/upgrade, andsupport and vendor satisfaction. These capabilities are more important to organizations with lessthan $3 million in annual revenue.

Of Oracle's respondents, 71% had over 200 users, 54% had over 500 users and 34% over 1,000users (a mean of 1,010 users per customer). These results, along with feedback received duringGartner client discussions, demonstrate Oracle Hyperion Planning's ability to support largerorganizations for complex planning, modeling and process support needs, especially where highdegrees of customization are desired and implementations are more IT-focused.

Oracle (SaaS)

Oracle's SaaS SCPM offerings include Oracle Planning and Budgeting Cloud Service (PBCS) andthe Oracle Enterprise Performance Reporting Cloud Service for narrative reporting.

Oracle's PBCS can be used by smaller organizations and for complementary on-premises HyperionEPM product use for individual business units within larger organizations. Eighty percent of Oracle'sreference respondents had an average annual revenue of over $1 billion.

Oracle PBCS's lowest score was for support and vendor satisfaction; however, this rating washigher than Hyperion's on-premises SCPM products. Given Gartner client interaction feedbackduring 2016, this appears to be improving over time for this cloud-based product.


When comparing customer examples related to the number of users, Hyperion Planning customerssurveyed had more users than PBCS; however, use cases with larger numbers of users isexpanding, and Oracle has a number of noteworthy examples with hundreds of PBCS users.

prevero

On 11 July 2016, prevero was acquired by enterprise application vendor Unit4. Although detailedinformation regarding additional integrated solution capabilities between the two vendors has notbeen announced, Unit4 will continue to offer prevero as a separate solution for support forbudgeting, forecasting, dashboards, modeling and analysis, as well as project portfolio and salesplanning.

Prevero received high scores for IFP/modeling/analytics and integration, as well as most ease-of-use categories. These are applicable for business units in larger organizations and midsizeorganizations. Of prevero's reference respondents, 57% had an average annual revenue of less than$1 billion; however, 36% were over $1 billion, and 18% over $3 billion. Although prevero referencesrepresented a range of organization sizes, only 16% had more than 200 users (a mean of 182users). As a result, prevero's lowest scores were for complex financial budgets and plans, andenterprise scalability. Survey results, along with feedback received during Gartner clientdiscussions, indicate prevero's ability to support a high degree of process complexity, mostly withinmidsize organizations and increasingly for specific use cases within organizations with revenue ofmore than $1 billion.

Prophix

Prophix's solution is largely used by small and midsize organizations to support budgeting, planningand forecasting, dashboards, modeling, analysis, strategy management, and financial consolidation.Prophix can also support integrated sales, workforce and project requirements, as well as revenueplanning workflows for SMBs. Prophix is built on the Microsoft SQL Server 2014 platform. It alsouses Microsoft Excel and SharePoint.

Prophix received high scores across all ease-of-use capabilities, which are particularly important tosmall and midsize organizations. Although the vendor had a high score relative to other vendor'swith a concentration of on-premises customers, Prophix's lowest ease-of-use rating was for ease ofmaintenance/upgrade. This is because even though Prophix customers generally find the vendor'ssolutions relatively easy to maintain and upgrade, its cloud version has only recently becomeavailable.

Of Prophix Software's reference respondents, 77% had an average annual revenue of less than $1billion. Respondents also had a mean of 99 users. Seventeen percent of the vendor's referenceshad over $1 billion in revenue, with 13% over $3 billion. These results also indicate some successfulusage within business units and/or departments of larger organizations.

SAP

SAP's on-premises SCPM offerings support complex use cases and are typically used by large andcomplex global organizations. They are favored by those standardizing on an SAP ERP and/or SAP


for analytics (SAP BW for data warehouse and Business Objects for analytics, for example). SAP'smost widely used SCPM offering, SAP Business Planning and Consolidation, supports financialconsolidation and close, as well as planning, budgeting and forecasting. SAP's other on-premisesSCPM products include SAP Strategy Management and SAP Profitability and Cost Management.SAP also offers a SaaS planning and analytics solution, SAP BusinessObjects Cloud.

SAP received its lowest scores for ease of implementation and ease of maintenance/upgrade.Support and vendor satisfaction were also low compared to some other vendors. These capabilitiesare less important to organizations with more than $3 million in annual revenue. SAP'sBusinessObjects Cloud (formerly SAP Cloud for Analytics and SAP Cloud for Planning) providesgreater overall ease of use as well as new in-memory analytics and collaboration capabilities (see"SAP BusinessObjects Cloud Offers Integrated Discovery, Analytics and Planning, but AddsPortfolio Complexity"). This product was not, however, included in these ratings as no customersusing this solution in production for planning were available for survey or interview by Gartner forthis study.

SAP received high scores for supporting complex financial budgets and plans, as well as IFP/modeling/analytics. These capabilities are primarily applicable to large organizations, especiallythose using SAP's ERP offerings. Of SAP's reference respondents, 65% had an average annualrevenue of over $1 billion (48% over $3 billion). Of SAP's respondents, 46% had over 200 users,23% had over 500 users, and 23% over 1,000 users (a mean of 652 users per customer). Theseresults, along with feedback received during Gartner client discussions, demonstrate SAP's abilityto support larger organizations, especially where implementations are more IT focused.

SAS

SAS's performance management suite comprises four integrated offerings: SAS FinancialManagement, SAS Strategy Management, SAS Cost and Profitability Management, and SAS CapitalPlanning and Management. These products draw on the vendor's business analytics competenciesand are most often used by organizations with complex corporate modeling needs.

SAS embeds analytics capabilities — such as correlation analysis of cost drivers and scorecardmetrics, predictive forecasting and the ability to incorporate macroeconomic data — into forecastprojections. The accompanying visualizations and wizards make these capabilities more accessibleto finance users. Also, SAS's Capital Planning and Management offering integrates financial andrisk-planning processes at both office of finance and operational levels of detail. It also supportsindustry-specific internal capital planning requirements. The vendor's performance managementfocus and strong modeling capabilities are characteristic of SAS Institute's more extensive strategicCPM initiatives.

SAS Institute received very high scores for IFP/modeling/analytics. Its complex budgets and plansscore was also high. SAS's lowest scores were for ease of implementation and ease ofmaintenance/upgrade. Support and vendor satisfaction scores were also very low.

Gartner customer feedback suggests that a relatively high percentage of SAS customers use itssolution to support profitability and cost modeling, as opposed to enterprisewide budgeting and


planning. Of SAS's reference respondents, 62% had an average annual revenue of over $1 billion;however, the majority of SAS's survey respondents (89%) had fewer than 200 users, (a mean of 183users per customer). These results, along with feedback received during Gartner client discussions,demonstrate SAS's ability to support larger organizations for complex modeling and analytics;however, these applications are not used as widely across the organization and are designed andmaintained primarily by IT.

Solver

Solver's BI360 product is an SCPM solution that is frequently sold to complement ERP financialapplications. Solver partners with a number of accounting software vendors, most notably Microsoft(for Microsoft Dynamics AX, GP, NAV and SL), Sage (for Sage X3, Sage 500, Sage 300 and Sage100), Intacct, Acumatica and SAP (for SAP Business One). About 95% of Solver's revenue comesthrough its ERP channels. Solver's tight integration with these ERP solutions gives it detailedtransactional reporting and drill-down capabilities that are unique in this sector. Solver also hasprivate cloud offerings with joint ERP/CPM installations that allow for real-time reporting in thecloud, through ERP-focused hosting partners like Concerto, Data Resolution, Njevity, RoseASP andSaaSplaza.

Solver received high scores for integration and ease of use, as well as for support and vendorsatisfaction. Solver also received good scores for financial budgets and plans. These are especiallyimportant for small and midsize organizations, particularly those using one of Solver's closelysupported ERP solutions. Of Solver's reference respondents, 62% had an average annual revenueof less than $1 billion. These respondents also had a mean of 59 users. Solver implementationstend to be focused more exclusively on the office of finance. For these reasons Solver's lowestscores were for enterprise scalability. These results, along with feedback received during Gartnerclient discussions, indicate Solver's ability to support planning and budgeting in small and midsizeorganizations, especially where operational reporting detail and tight ERP integration is required.

Tagetik

Tagetik supports budgeting, forecasting, performance reporting, dashboards, modeling andanalysis. It also offers integrated financial planning, cash-flow planning and packaged integration forMicrosoft, SAP (Hana) and the Qlik Analytics Platform. Tagetik's suite can run on Microsoft SQLServer, Oracle or SAP Hana databases. Tagetik Cloud is licensed as SaaS, and can also be hostedon private Amazon Web Services or Microsoft Azure cloud environments.

Tagetik received high scores for complex financial budgets and plans, integration, and support andvendor satisfaction. These capabilities, along with Tagetik's combination of ease of use and abilityto support complex processes is important to both midsize and large organizations. Tagetik surveyresponses showed a fairly even split here with slightly more than half (58%) of Tagetik's referencerespondents having an average annual revenue of over $1 billion.

A third (34%) of Tagetik customers had over 200 users with 11% over 500 users and another 11%over 1,000 users (a mean of 430 users per customer). These results compare favorably to othercompetitors of a comparable size. These results, along with feedback received during Gartner client


discussions, demonstrate Tagetik's ability to support a high degree of complexity especially whereclose process integration with financial reporting is required.

Context

This research analyzes how successfully the selected vendors (see the Inclusion Criteria section)support strategic corporate performance management processes, as well as their use and adoption.This analysis differentiates the appropriateness of each vendor's solution based on organizationsize. This generally reflects use-case complexity, and the related need for more diverse functionalityand application customization. In addition, the use of each vendor's solution is evaluated for aparticular single business unit within a larger organization — that is, as a departmental solution fororganizations with $1 billion or more in annual revenue.

Product/Service Class Definition

Strategic corporate performance management solutions support the office of finance's budgetingand planning efforts. They also provide integrated financial planning, financial modeling, analyticsand strategy management capabilities. Ultimately, these solutions help CFOs and other businessleaders orchestrate organizational performance and manage strategy in a more controlled andtransparent manner.

Critical Capabilities Definition

Financial Budgets and Plans

The ability to support financial budgeting and planning processes, including support for financialbudgeting processes in which targets are set for revenue, expenditure and cash generation.

This also includes the ability to act as a fixed control mechanism and use financial classificationsfound in the general ledger to classify financial goals and targets, as well as the ability to supportplanning and forecasting using a modeling engine optimized for the office of finance's use (byincluding profit-and-loss balance-sheet and cash-flow forecasting capabilities, for example). Thisfeature distinguishes CPM from other analytics applications that also create plans and forecasts(such as applications for operations planning, or marketing campaign planning). These capabilitiessupport the creation, review and approval of financially focused plans and forecasts, as well as theirassociated workflows. They should support driver-based planning and maintain an audit trail of allassociated activities.

Complex Financial Budgets and Plans

Includes budgeting, planning and forecasting capabilities as well as the ability to support more-advanced modeling and analytics, with a broader set of users, more complex processes andbusiness rules, and expanded data stores.

These applications support large numbers of users, departments and/or business units. Theysupport an extensive amount of business logic with high complexity, such as intricate allocation


rules. They support and automate complex workflows while providing transparency and control, andcan also integrate additional operational data to improve the accuracy of enterprisewide budgetsand plans. These solutions can use business drivers to model alternative outcomes if businessconditions change, and can incorporate in-memory computing, advanced statistical techniques andanalytics to control and support financial planning, predict performance and guide strategy.

IFP/Modeling/Analytics

This capability can complement and/or extend complex financial budgeting and planning to morecollaboratively integrate financial planning across business domains. This capability can alsoinclude financial modeling efforts in support of short-term and long-term planning.

These applications help the office of finance to link to related operational planning capabilities inother business domains (such as sales or human resources) or model other financial planningcomponents in more detail (such as revenue, cash, demand, capital and project portfolio planning).These solutions create more-accurate predictions based on experience, can model alternativeoutcomes if business conditions change, and incorporate in-memory computing, collaborationfeatures, advanced statistical techniques, data discovery and other features to help support more-collaborative enterprisewide planning, predict performance and guide strategy.

Because these solutions are used across business domains, and require more-frequent and detailedbusiness-knowledge-driven updates, both finance and other business users need models that areeasy to build and maintain, allow for more-frequent modifications, and leverage additional internaland external data sources. More-extensive data allows additional statistical techniques to be usedmore effectively (for example, for predictive or prescriptive purposes) and requires more extensivein-memory computing capabilities. This also includes complex, initiative-specific planning, cost andprofitability modeling, and provides decision support.

Integration

This capability addresses whether a given vendor solution has demonstrated integration tocommonly deployed strategic and operational solutions, and the reliance on IT and externalresources to develop and maintain these interfaces.

Ease of Implementation

This refers to the solution's ability to be designed and implemented rapidly with a minimum ofspecialized skills and outside consulting expertise.

This capability is important for organizations of all sizes, but especially for smaller ones anddepartments or business units in larger organizations. Ease of implementation is becoming a more-important capability as a whole, and Magic Quadrant survey respondents rated this the third mostimportant criterion when selecting a vendor for SCPM solutions.


Ease of Use

This refers to solution use from both an ongoing administrative and end-user standpoint. It includesend-user satisfaction, ease of adoption, effectiveness and ease of support.

This capability is important for organizations of all sizes, but especially for smaller ones anddepartments or business units in larger organizations. Ease of use is now a primary capability as awhole, Magic Quadrant survey respondents rated this the second most important selection criterionwhen selecting an SCPM solution. Understandably, only functional capability rated higher.

Ease of Maintenance/Upgrade

This capability describes the ability of a solution to be maintained and upgraded with a minimum ofeffort, specialized skills, and cost. SaaS-based applications that include upgrade capabilities havean advantage within this capability.

This capability is important for organizations of all sizes in order to ensure compatibility with relatedproducts and leverage new product features. It's especially relevant for smaller companies withminimal IT resources and less money to spend on third-party consulting support for upgrades.

Support and Vendor Satisfaction

This includes satisfaction with ongoing application support and overall vendor satisfaction.

A critical capability for success depends on how closely a solution can support desired businessoutcomes and the level of customer trust it earns. This latter capability is especially true in thecloud, where customers give up more control than with on-premises options. Cloud customersmust rely on their vendors to a greater degree. This is especially important within the office offinance, a business domain that is necessarily risk-averse.

Enterprise Scalability

This includes the ability for the product to scale to support hundreds and even thousands of usersfor many customers.

No distinction has been made between on-premises and cloud-based solutions, instead thiscriterion is based on each solution's typical use case, and the products' (and vendor consultants')ability to support large numbers of worldwide users and complex use cases.

Use Cases

Small Organization

Small organizations that are publicly traded or privately held, with less than $250 million in annualrevenue.


These organizations typically have relatively straightforward financial budgeting and planning needs.Application complexity is minimal. For example, processes involve fewer users, workflows havefewer steps and require less customization, and there are fewer business rules. Lower-costsolutions are desired. This includes initial solution cost, design and implementation cost, as well asongoing support costs. As a result of this, and because few to no dedicated finance or IT resourcesare available for system support, ease of use is very important.

Midsize Organization

Midsize organizations that are publicly traded or privately held, with $250 million to $1 billion inannual revenue.

These organizations typically have a range of financial budgeting and planning needs, from simpleto moderately complex, depending on the number of ERPs used, the degree of ongoing change inthe business environment process complexity, and the need for financial analytics. Applicationsneed to support a fair amount of complexity; however, initial solution cost, design andimplementation cost — as well as ongoing support cost — are important factors. Time to value andease of use are also important capabilities.

Midsize/Large Organization

Larger organizations that are publicly traded or privately held, with $1 billion to $3 billion in annualrevenue.

These organizations have more-complex financial budgeting and planning needs. The number ofusers, amount of source data and process complexity is high. Integrated financial planning,modeling and analytics are more important, given the breadth of relevant financial informationacross business domains — supporting SCPM processes is more challenging and leveraging thehigher data volumes can yield higher analytic value. Applications can need to support a highamount of complexity.

Initial solution costs, design and implementation costs, as well as ongoing support costs, areimportant factors but are secondary to satisfying business needs. As a result, time to value andease of use are valued capabilities and important factors during product evaluations.

Large Organization

Large organizations that are publicly traded or privately held, with over $1 billion in annual revenue.

These organizations can have the most-complex financial budgeting and planning needs. Thenumber of users, amount of source data and process complexity is high. Integrated financialplanning, modeling and analytics are very important, given the breadth of relevant financialinformation across business domains — supporting SCPM processes is more challenging andleveraging the higher data volumes can yield higher analytic value. Applications often need tosupport a high amount of complexity. Initial solution costs, design and implementation costs, aswell as ongoing support costs are important factors but are secondary to satisfying business needs.As a result, time to value and ease of use are valued capabilities and important factors during


product evaluations; however, dedicated finance and IT resources are typically available toparticipate in project implementation and support these SCPM applications on an ongoing basis.

Business Unit

Individual business units within a large, publicly traded or privately held organization.

These organizations have a variety of needs. Financial budgeting and planning processes may besimple or fairly complex; however, these needs typically exist because the enterprisewide solution:

1. Was not configured for the specific needs of the business unit.

2. Does not have the flexibility to satisfy the more-specific needs of the business unit or its more-dynamic processes, which may more closely mirror operational planning processes.

3. Does not have the ease of use required.

4. Is not available ("power user" licenses have not been provided).

5. Does not have the modeling and/or financial analytic capabilities needed. These can include theneed to support complex models (especially those finance users can manage themselves),application performance to support larger, detailed datasets, or information visualizations toprovide information to business users.

Vendors Added and Dropped

Added■ None — This is a new Critical Capabilities report

Dropped■ None — This is a new Critical Capabilities report

Inclusion CriteriaTo be included in this Critical Capabilities report, each vendor had to meet the following criteria:

Market Presence

■ At least 100 in-production customers using two or more of the SCPM applications.

■ License, maintenance and booked subscription revenue from SCPM applications for the period1 July 2014 to 30 June 2015 of at least $10 million. Unrealized recurring revenue was notincluded.


■ Market presence and demonstrated interest by clients in its solutions and offerings, asdetermined by Gartner.

■ License maintenance not overly disproportionate to new revenue.

■ Implementation services in three or more of the following regions: North America, SouthAmerica, EMEA, Asia/Pacific and Japan.

■ Target midsize or large companies, or large public-sector/nongovernmental organizations withmultiple, diverse departments.

■ Support for enterprise-scale deployments with hundreds of users in a variety of industries;industry solutions could not represent more than 70% of overall revenue.

■ In addition, ERP vendors had to show continued SCPM investment and market presenceoutside their ERP customer base.

Product Capabilities

■ SCPM offerings for at least two of the five SCPM components.

■ Demonstrable success with investments in new technology.

Vendor Viability

■ Financially viable, profitable or have a realistic path to profitability.


Table 1. Weighting for Critical Capabilities in Use Cases

Critical Capabilities Small Organization Midsize Organization Midsize/Large Organization Large Organization Business Unit

Financial Budgets and Plans 30% 10% 5% 0% 15%

Complex Financial Budgets and Plans 0% 15% 25% 30% 15%

IFP/Modeling/Analytics 5% 10% 15% 15% 20%

Integration 5% 10% 10% 10% 10%

Ease of Implementation 15% 10% 10% 5% 5%

Ease of Use 20% 15% 10% 5% 10%

Ease of Maintenance/Upgrade 15% 15% 5% 5% 10%

Support and Vendor Satisfaction 10% 10% 10% 5% 10%

Enterprise Scalability 0% 5% 10% 25% 5%

Total 100% 100% 100% 100% 100%

As of September 2016



This methodology requires analysts to identify the critical capabilities for a class of products/services. Each capability is then weighed in terms of its relative importance for specific product/service use cases.

Critical Capabilities Rating

Each of the products/services has been evaluated on the critical capabilities on a scale of 1 to 5; ascore of 1 = Poor (most or all defined requirements are not achieved), while 5 = Outstanding(significantly exceeds requirements).


Table 2. Product/Service Rating on Critical Capabilities

Critical Capabilities

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Financial Budgets and Plans 4.3 3.2 3.0 3.3 3.2 3.9 3.3 4.2 3.7 3.0 4.1 3.4 4.2 3.0 3.2 3.9 3.6

Complex Financial Budgets and Plans 2.9 4.3 4.0 4.2 4.2 3.6 4.4 2.7 3.8 4.5 3.7 3.6 2.7 4.5 4.3 3.0 3.9

IFP/Modeling/Analytics 3.5 4.3 3.6 4.1 3.9 3.6 4.4 3.5 3.9 4.2 3.7 3.9 3.4 4.2 4.7 3.0 3.7

Integration 4.0 3.6 4.5 4.1 3.9 4.2 3.8 4.2 3.9 3.8 3.9 4.1 4.2 3.4 3.4 4.2 4.3

Ease of Implementation 4.5 3.0 4.3 4.0 3.3 4.1 3.1 4.1 3.6 1.9 3.8 3.9 4.1 1.8 1.8 3.6 3.7

Ease of Use 4.4 3.8 4.2 3.9 3.8 4.2 3.3 4.2 3.8 3.2 3.5 4.2 4.2 3.1 2.9 4.0 4.0

Ease of Maintenance/Upgrade 4.5 4.3 3.8 3.7 3.7 4.5 2.1 4.0 3.3 2.0 4.1 3.7 3.9 2.0 2.0 3.9 3.7

Support and Vendor Satisfaction 4.5 3.9 4.5 3.9 3.8 4.3 3.8 4.3 3.9 2.8 3.2 4.2 4.2 2.8 2.9 4.2 4.2

Enterprise Scalability 3.0 3.4 3.3 3.2 3.4 3.4 4.5 2.8 3.6 4.5 3.7 3.3 2.7 4.5 4.0 2.9 3.6




Table 3 shows the product/service scores for each use case. The scores, which are generated bymultiplying the use-case weightings by the product/service ratings, summarize how well the criticalcapabilities are met for each use case.


Table 3. Product Score in Use Cases

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Small Organization 4.35 3.60 3.81 3.73 3.54 4.12 3.22 4.13 3.69 2.81 3.82 3.82 4.10 2.75 2.81 3.88 3.81

Midsize Organization 4.00 3.83 3.96 3.87 3.74 4.03 3.54 3.81 3.72 3.25 3.75 3.84 3.77 3.19 3.18 3.67 3.87

Midsize/Large Organization 3.73 3.87 3.96 3.93 3.80 3.88 3.88 3.57 3.77 3.63 3.70 3.81 3.53 3.57 3.54 3.48 3.88

Large Organization 3.44 3.90 3.86 3.86 3.82 3.75 4.10 3.29 3.75 3.98 3.71 3.70 3.24 3.93 3.82 3.28 3.84

Business Unit 3.90 3.87 3.85 3.87 3.75 3.94 3.72 3.75 3.76 3.47 3.76 3.81 3.71 3.41 3.48 3.59 3.85




Gartner Recommended ReadingSome documents may not be available as part of your current Gartner subscription.

"How Products and Services Are Evaluated in Gartner Critical Capabilities"

"Magic Quadrant for Financial Corporate Performance Management Solutions"

"Market Guide for Specialty Corporate Planning Applications"

"Modernizing Analytics in Support of Performance Management"

"The Office of Finance Must Embrace New Planning Frameworks to Link Strategy and Execution"

"How to Achieve Enterprise Agility With a Bimodal Capability"

"2015 Strategic Roadmap for Strategic Corporate Performance Management"

"Integrating Financial and Workforce Planning"

"Three Best Practices for Integrating Financial and Sales Planning"

"Predicts 2016: Financial Management Applications"

"IT Market Clock for Financial Management Applications, 2016"

Evidence

Among the research for this Critical Capabilities report, Gartner conducted a survey of organizationsusing SCPM products. The survey ran from November 2015 to January 2016. The surveyparticipants were reference customers nominated by each of the 16 vendors in the companionMagic Quadrant. These customers were asked 20 questions about their experiences with theirSCPM vendor and solution(s). The results were used in support of an assessment of the SCPMsolution critical capabilities. We obtained 736 full responses, which represented companiesheadquartered in six different regions, as follows:

■ North America: 56%

■ Western Europe: 26%

■ Latin America: 2%

■ Central and Eastern Europe: 7%

■ Asia/Pacific: 7%

■ Middle East and Africa: 2%

In addition to the survey results, these assessments reflect significant consideration of informationgathered from Gartner's interactions with SCPM reference customers throughout the year.


Critical Capabilities Methodology

This methodology requires analysts to identify the critical capabilities for a class ofproducts or services. Each capability is then weighted in terms of its relative importancefor specific product or service use cases. Next, products/services are rated in terms ofhow well they achieve each of the critical capabilities. A score that summarizes howwell they meet the critical capabilities for each use case is then calculated for eachproduct/service.

"Critical capabilities" are attributes that differentiate products/services in a class interms of their quality and performance. Gartner recommends that users consider theset of critical capabilities as some of the most important criteria for acquisitiondecisions.

In defining the product/service category for evaluation, the analyst first identifies theleading uses for the products/services in this market. What needs are end-users lookingto fulfill, when considering products/services in this market? Use cases should matchcommon client deployment scenarios. These distinct client scenarios define the UseCases.

The analyst then identifies the critical capabilities. These capabilities are generalizedgroups of features commonly required by this class of products/services. Eachcapability is assigned a level of importance in fulfilling that particular need; some sets offeatures are more important than others, depending on the use case being evaluated.

Each vendor’s product or service is evaluated in terms of how well it delivers eachcapability, on a five-point scale. These ratings are displayed side-by-side for allvendors, allowing easy comparisons between the different sets of features.

Ratings and summary scores range from 1.0 to 5.0:

1 = Poor or Absent: most or all defined requirements for a capability are not achieved

2 = Fair: some requirements are not achieved

3 = Good: meets requirements

4 = Excellent: meets or exceeds some requirements

5 = Outstanding: significantly exceeds requirements

To determine an overall score for each product in the use cases, the product ratings aremultiplied by the weightings to come up with the product score in use cases.

The critical capabilities Gartner has selected do not represent all capabilities for anyproduct; therefore, may not represent those most important for a specific use situation


or business objective. Clients should use a critical capabilities analysis as one ofseveral sources of input about a product before making a product/service decision.


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