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What are some of the options being used for Budgeting and Forecasting software other than Excel, for a middle market company?

budgeting forecasting software

Answers

Jeff Taylor
Title: CFO
Company: Communications Co.
(CFO, Communications Co.) |

There are a number (quite a few, actually) platforms out there for moving budgeting/planning off of spreadsheets. And as a mid-market company, you really need to get off of Excel for that stuff - too slow and too many mistakes. The platforms I see most often are Host Analytics and Adaptive Planning. We are looking at both of them (there are a number of discussions on Proformative that mention both) and, having used massive enterprise planning platforms in the past, they both seem like great alternatives to both Excel and the heavy, slow and expensive "enterprise" planning solutions.

Bill Aiken
Title: Principal & CEO
Company: Abacist Group
(Principal & CEO, Abacist Group) |

As part of my consulting practice, I have completed over 40 Budgeting & Forecasting software implementations for companies moving from Excel to a more robust Corporate Performance Management application. Most of these implementations have been for Mid Market companies with revenues in the range of $50 million - $1 billion.

While I have touched various CPM applications including Hyperion Planning, Adaptive Planning, Cognos, SAP (BPC & BPS), Host Analytics and Prophix, I have spent more time with Hyperion Planning & Adaptive Planning, so will focus my comments against those applications.

Hyperion Planning is the best known and arguably most robust and most expensive tool for Budgeting & Forecasting while Adaptive Planning is the best known Cloud-base/Software-as-a-Service application (based on aided & unaided brand awareness).

What are some of the key differences between these two applications? I find it easiest to compare the two by breaking it down into three categories: 1) Software Functionality, 2) Implementation, & 3) Total Cost of Ownership

Software Functionality

Hyperion Planning is a powerful Budgeting, Planning & Forecasting application that leverages the power of its underlying calculation engine (Essbase) to allow for robust multi-dimensional planning (e.g., by cost center, by customer, by product, by month) while providing a controlled, form-driven end user interface that can either be served up via Internet Explorer or even within Excel itself. While Internet Explorer is often the application used to interface with the underlying data, it is important to realize that Hyperion Planning is typically installed on a company's own servers (and it does usually require multiple servers). Usually, Hyperion Planning comes with rights to 3 Essbase cubes which quite often are used for: 1) Revenue Planning, 2) Personnel Planning, 3) Financial Account Planning. Essbase itself is considered one of the top technology innovations of the last 20 years and can quickly and efficiently calculate/aggregate large amounts of data and has many, many formulas/functions that can be applied to the data. There is much more to say about Hyperion Planning's functionality, but I could literally write hundreds of pages of content and not cover it all. It is both powerful and at the same time, complicated.

Adaptive Planning also has cube technology but there are some differences. For most Mid-Market clients, their cube technology is more than sufficient but they don't have the very extensive array of aggregation/calcuations that Essbase possesses and for very large data sets, Adaptive is likely to take longer than Hyperion Essbase to process. Adaptive, in my opinion, actually does a better job than Hyperion Planning with qualitative information (think text instead of numbers) which can be extremely helpful for Personnel Planning, Capital/Asset Planning or Project-base Revenue Planning. Because Adaptive has less functionality than Hyperion it is much easier to use and maintain than Hyperion. For example, most clients of mine who have Hyperion have 1-2 FTE's to administer the application on an ongoing basis vs. for Adaptive it is usually a small fraction of 1 FTE.

Implementation

Because of the differences in complexity mentioned above and due to the Cloud vs on-premise differences, the implementation process usually is much longer and more costly for Hyperion Planning than Adaptive Planning.

In some cases, clients can be up & running in 6 weeks on Adaptive Planning vs. I have seen clients who have taken more than 6 weeks simply to get the servers set-up with the Hyperion software installed before the actually model development can begin.

Hyperion implementations do tend to be more robust including many days for requirements gathering, user acceptance testing and end user training. Versus most Adaptive implementations are not as formal with these steps and so they tends to be quicker, but not as well developed.

Overall, for clients that outsource their entire model build, I tend to see Adaptive clients get up and running with about 70-120 hours of implementation time at under $200/hour vs. most Hyperion clients are looking at well over 1,000 hours of consulting (including infrastructure set-up) at rates typically over $200/hour.

Hyperion implementations usually are conducted on-site at the client vs. Adaptive are usually conducted "virtually" over the Cloud.

Total Cost of Ownership

We have already touched on part of the TCO equation above, but there are at least 3 buckets to consider when trying to calculate the total cost of a software solutions: 1) Software Licensing & Support, 2) Hardware/Infrastructure, and 3) Services (Implementation & Ongoing Admin)

Because Hyperion is typically "on-premise" licenses are purchased one-time and then a recurring annual fee per user for support. For Adaptive, you don't purchase the software upfront, but instead pay annually for rights to use the software on the cloud as a service.

The 1st seat of Adaptive actually currently includes rights to one Admin seat and 2 standard use seats for a year and costs about the same as the 1st seat for Hyperion Planning. The 2nd year of Adaptive costs about the same as the 1st vs. the ongoing support costs for Hyperion are about 25% of the initial license. So while you would have to do the math to determine your true software cost year-1 and onward, realize that Adaptive will certainly be SIGNIFICANTLY cheaper for year-1, and could very well be cheaper or parity to Hyperion for years-2 onward when support costs are considered.

For hardware/infrastructure, there truly is no comparison between the two applications. With Adaptive you have $0 of infrastructure costs since it is on the cloud. With Hyperion Planning, you will probably need multiple servers available to run the application including at least one physical server to run Essbase itself (it does not work well in a virtual environment). So hardware/infrastructure costs are likely to be $10k's (in some cases even over $100k).

We touched on services above, so I won't go into great detail here. But it is likely that Adaptive services would cost 10% that of Hyperion.

In summary, both Adaptive Planning and Hyperion Planning are wonderful tools and can make your FP&A process much more robust and efficient than Excel alone. Both tools have added significant enhancements in the last 2-3 years. Adaptive is much quicker, easier, and affordable to use. Hyperion is more robust, powerful and complex. I have seen both used successfully in Mid Market companies. I do, however, challenge my clients (and potential clients) to prove to themselves that they can't do what they want to do with Adaptive Planning before spending the time, energy and money on Hyperion Planning. In some cases the requirements will lead them to Hyperion, but Adaptive has made significant advances in their functionality, so the gap between the two has shrunk.

Colleen Tebo
Title: Manager
Company: Cervello
(Manager, Cervello) |

We use Host Analytics for Budget/Forecasting, Revenue Planning, HR Planning and Consolidations. The system is really user-friendly, excel like so it is easily adapted by the administrators and the end users. The implementation was quick, the company was assigned a single point of contact during the design phase so you get 1:1 attention. The budget administrator is trained during the design phase so when the design phase is over the client will know how to maintain and modify as needed without the need to bring consultants in. The "out of the box" product is customized for each customer so you will get exactly what you want. So far it has been really easy to maintain and to make changes throughout the system such as adding accounts, products, company, new templates, reports etc. If by chance you don't know how to do something, the support team is always there and they have been amazing! I would definitely recommend taking a Host Analytics demo.

Joan Nevins
Title: CFO
Company: Kalido Inc
(CFO, Kalido Inc) |

We have been using Adaptive Planning for several years and I have recommended it to others as the "next step" beyond Excel. We are a sub-$25M company but with multinational locations and multiple currencies. It handles everything we need. Their most recent upgrade has added a lot of reporting flexibility and we now use to it generate our monthly package of budget v. Actual, uploading actuals into it and saving time.

Topic Expert
Len Green
Title: Performance Improvement Consultant and E..
Company: Haygarth Consulting LLC
LinkedIn Profile
(Performance Improvement Consultant and ERP Strategist, Haygarth Consulting LLC) |

Apart from the planning capabilities above, how do users find Adaptive Planning in the area of consolidation, including foreign subs, minority interests, changes in % of ownership and CTA proofing?

Topic Expert
Keith Perry
Title: Consulting CFO and Business Operations A..
Company: Growth Accelerator
(Consulting CFO and Business Operations Advisor, Growth Accelerator) |

Len....maybe repost this as a new question, because I *definitely* am interested in the answer.

Reginald Newsome
Title: Financial Analyst
Company: NPR Inc
(Financial Analyst , NPR Inc) |

We are currently using Host Analytics for all of our budgeting and forecast needs. We were able to produce our monthly forecast package in half the time by using Host Analytics. The company is saving time and money.

Katrina Yeung
Title: Project Manager
Company: Orchard Brands
(Project Manager, Orchard Brands) |

Does anyone have any updates on how they feel about Host Analytics now that they have used it for a period of time?

Alan Hart
Title: Consultant
Company: Pacific Shine Group
(Consultant, Pacific Shine Group) |

From my experience I find that the most important components in the budgeting and forecasting process are:
1) Spending more time on periodic analysis of actual numbers vs. budget and making the necessary corrections.
2) Using a system that is business rule based without depending on user programing and formula building with its associated errors, omissions and troubleshooting.
3) A system that is an extension of your actual accounting system and that allows you to forecast the entire chart of accounts and arrive at an accurate balance sheet in addition to the standard reporting output available from most systems.

Not having these components will significantly compromise the value of the budgeting process and will almost never accomplish its intended purpose.

You may want to investigate the solution provided by Centage Corporation (www.centage.com), titled Budget Maestro, as I believe it can address the 3 points mentioned above.

Sasi kumar Bhaskaran Nair
Title: General Manager ( Finance)
Company: Gulf Consolidated Contractors Company
(General Manager ( Finance), Gulf Consolidated Contractors Company ) |

Can anybody explain how these tools are interfacing with other ERP's like SAP. Since while comparing budget vs actual, we require strong interface

Topic Expert
Brenda Morris
Title: Board of Directors, Audit Committee Chai..
Company: Boot Barn
(Board of Directors, Audit Committee Chair, Boot Barn) |

I am a huge fan of Host Analytics. I just wrapped up my second implementation (new at 5.11 Tactical) of the CPM Tool and it has changed how we manage the business. We've moved from an Excel based, data logged environment to a single source of the truth environment that allows us to make better, more proactive decisions with analysis and reporting that is real time and value adding right then. It is cloud based and priced well so makes it a great solution for the small company to very large organization. You will never look back after moving to a great CPM/Planning tool!

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