Aspects to Consider When Selecting FP&A Software
Updated: Aug 1, 2021
Selecting Automated Financial Planning Tasks Help Finance Teams Work Better
The larger an enterprise, the greater the urgency for better financial planning and analysis (FP&A). You’re managing massive amounts of data, and you’re often under intense pressure to provide timely insights. Any delays or mistakes in financial planning could have catastrophic consequences.
Today, many companies are struggling to meet these expectations in their financial planning process. Team members involved in planning processes tend to say that the process is “just too slow”. As you can imagine, the process of sending out spreadsheet templates, collecting them, sending them back to receive missing information, consolidating the numerous files and eventually preparing the required report takes time - usually a couple long tiring months.
A great deal of the challenges in this process can be relieved by automating financial planning tasks that are repetitive. Financial professionals witness reduced error and increased productivity by choosing automation, granting them the ability to shift focus to greater priorities.
The traditional copy-paste approach to data leaves plenty of room for errors and while Excel may have been enough in the past, it's hard for large enterprises to maintain data quality and accuracy. In an area of business like Finance, you’re dealing with data on a day-to-day basis. Choosing to automate financial planning eliminates recurring data entry, reduces the risk of human error, and simplifies much of the work.
So whether your company is finally moving on from a spreadsheet-based system, looking to migrate from another package, or starting from scratch, purchasing FP&A software is no small undertaking.
Even setting cost aside, there are many aspects to evaluate when considering potential FP&A software. Evaluating the software means understanding what it can do for you today, tomorrow, and well into the future.
How quickly can you start using new FP&A software?
After spending months assessing different features and software vendors, the last thing a team wants to do is wait months more to begin using it. Yet, with some FP&A solutions, waiting is required due to extensive implementation processes and timelines. This not only delays the time of when you can start enjoying the benefits of the platform, but it also raises costs and causes business disruption. It’s also crucial to comprehend the involvement of your own internal resources for implementation tasks. Both finance and IT teams may need to devote significant hours to ensure adequate set-up of the software for long, complicated implementations, or those that are housed on-site.
On the other hand, if the platform offers a cloud-based solution, implementation time from IT may be minimal, costs are reduced, and disruption to the existing process can be all but eliminated. One example is DataRails which allows you to continue to run your processes much like you used to. By using Excel as its user interface DataRails is able to provide an extremely simple and short implementation time, taking anywhere between 1-2 weeks depending on the structure of your organization’s spreadsheets.
What’s the learning curve?
Learning a new software package may be intimidating. Having worked with spreadsheets for years, many teams are wary of a new way of doing things or are hesitant to trust a new platform. Furthermore, some FP&A software have a user interface that reflects the complexity of the application’s inner workings - or, put another way, the software isn’t easy to use.
When evaluating different FP&A software, it is important to pay attention to how user-friendly the software is. Is there a steep learning curve and extensive training required to get started? Is it easy to produce reports? Will the financial team be able to manage the software on their own, or will they require IT assistance?
Whatever software you choose, make sure the vendor is prepared to assist you with any questions you may have through the implementation process and during future use.
What’s the technology stack?
When investing in FP&A software, you’ll want to be sure that it will last for years, that it will run smoothly, and that it will work well with current technology.
The solution must be based on current technologies in order to be fast, efficient, and take advantage of the capacity to import and integrate data from a multitude of sources. Advanced functions, such as dashboarding and reporting, require the application to utilize the underlying technology to the fullest. When selecting a cloud-based solution, make sure it can take advantage of the cloud’s capabilities to provide you with quick and precise results.
Furthermore, an application must be developed to modern standards in order to be secure. Security is critical in both the cloud and on-premise environments. Security updates and patches will be difficult to implement for applications developed on outdata technology. With cloud-based solutions, your application is always up to date and secure, requiring no intervention from you.
How flexible is the FP&A software?
Flexibility and availability are essential for gathering a large range of information needed for an accurate budget. If your FP&A software doesn’t allow for collaborations or forces your finance team to reconcile data from numerous sources, your organization may miss out on opportunities or suffer from costly data inaccuracies.
The tool you purchase should be capable of doing more than just budgeting. The platform is an investment, and it should assist the organization in budgeting, forecasting, analyzing, and understanding where the company is and where it is headed.
When it comes to FP&A software, there is a lot to consider. It is important to make sure you are thinking not only about current requirements, but also about any potential future requirements your company might have. Selecting the right software helps ensure that your forecasting process is successful in the future.