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Planning, Budgeting & Forecasting Software Evaluation Guidelines

When a review of priorities says it's time to revamp the platform for budgeting, planning and forecasting, emphasis switches to choosing solutions that leverage performance in a holistic way.

Sound decisions help growing companies ease everyday challenges and fend off risks that threaten long-term viability. Successful transitions span unique business traits, collaborative work goals and rolling forecasts, among other key objectives.

Suitable budgeting, planning and forecasting software helps companies avoid pitfalls and leverage opportunities. But who doesn't fear the catch? Instead of delivering a long list of benefits, wrong choices cause nail-biting havoc and cost overruns that cripple growth strategies and careers.

Tailored solutions can accommodate companies in every situation. But the wealth of choices bestows a mixed blessing. A crowded marketplace features a handful of choices that are right for one company — and hundreds of ways to go astray when all variations and wrinkles are considered. Vendors recommend wrong and right budgeting, planning and forecasting solutions with honest intention and equal conviction. The burden rests squarely on companies, and CFOs in particular, to balance costs and benefits in optimal ways.

Experts often boil the selection process down to a series of steps. Short of duplicating those efforts, six questions can start to elicit a framework for making the best choices:

  1. Can you afford to invest in budgeting, planning and forecasting that will help your company grow faster?
    Start-ups might get by with budgeting and planning spreadsheets from retail stores, and multi-billion dollar companies can spend millions on top-of-the-line enterprise software. Mid market companies that hope to grow often face the hardest economic decisions. If budgeting, planning and forecasting software doesn't help frame the decision and suggest answers, that's probably exhibit A in the case for an upgrade. If reconciling ad hoc results to produce one coherent financial statement invites delays, errors or confusion, companies can't afford the status quo. Caveat: do not leap automatically to flashy solutions. For instance, usage patterns and expected lifetimes for a system lobby for or against cloud providers that charge on a per transaction basis. But where growth is pivotal, greater capacity for budgeting, planning and forecasting hones a competitive edge.

  2. By what date do you need the system to operate fully and smoothly?
    Length of time to install a new budgeting, planning and forecasting system is a key selecting factor. Unrealistic expectations and hasty actions wreak havoc on growing companies. Weighing a change is urgent long before it becomes imperative. Systems take months or even years to implement, allowing sufficient time for working out glitches and getting users accustomed to new approaches. The right tools get up and operating with minimal distraction and without excessive training or capital demands — whether installation requires two months or two years. Absent a seamless transition in a suitable time frame, companies risk taking on more than they can chew.

  3. What do you expect a new system to accomplish?
    Planning, Budgeting & Forecasting Software Evaluation Guidelines Software alone doesn't fix inefficient business processes; people do. Every situation calls for a different approach. Off the shelf products might satisfy a lone bookkeeper who handles budgeting, planning and forecasting for a small firm in one. Companies with multiple locations and more than one bookkeeper need additional support, if only by tweaking the existing software. At mid-sized firms with significant growth expectations and a CFO, a controller and a finance team, systems meant for smaller companies will curtail the future. Beyond results that resonate in finance departments, operations people must understand the market intelligence embedded in a ton of financial data. They should find all steps intuitive, from entering data to interpreting performance metrics. Rolling forecasts add a vital layer in the selection process. They must be flexible and adaptive as markets change, and easily integrated with general ledgers, travel and expenses, and diverse priorities of end users.

  4. Are you informed enough to evaluate hands-on testing?
    Selecting the right budgeting, planning and forecasting system hinges also on candid self-assessment. Do not embark on the selection process uncertain about skills and methodology that result in good decisions. Take time to conduct research and peruse tool guides, buyers' guides and reviews. Decisions made in a vacuum invite poor outcomes. Keep communication lines open. Involve everyone with a stake in operating the software or using results — senior executives, managers, customers, vendors, and even rank and file workers. Deep tech expertise is not a prerequisite, but good decisions require rigorous and consistent evaluation that breaches silos.

  5. How do companies narrow the field?
    Scoring systems can weigh pros and cons keyed to building a solid business case. Put software vendors on notice about expectations. Don't conceal blind spots; investigate them. Define must-haves like ease of use, ability to manage contracts, an easy-to-configure approval chain, supplier network capability and electronic links that form seamless connections internally and externally. Use high scores to build a short list of options and vendors, and then evaluate demos until vendors have answered every question about functionality and adaptability in the future. An installed demo allows time to probe strengths and weaknesses.

  6. Who makes the final decision to proceed?
    Calling shots in a vacuum invites poor outcomes, even if the finance department is the heaviest user of budgeting, planning and forecasting software. For substantial investments with impact across a whole company, choices invite trouble without buy-in from top management. When finance goes to bat for an upgrade in budgeting, planning and forecasting tools, the case must rest on more than hopeful expectation. Make benefits obvious and be candid about limitations. Even if Boards of directors do not weigh in at the outset, keep them up to speed. They will demand answers if budgeting, planning or forecasting puts the company at risk, and CFOs who stand alone often face harsh consequences alone.

Now that you have a solid foundation for making your technology decisions, feel free to explore our Budgeting, Planning, and Forecasting product listing, where you will find filtering capabilities and product reviews from financial professionals.