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Selecting Budgeting & Forecasting Software Vendors Guidelines

Installing budgeting, planning and forecasting software requires a very specialized village. A roster of thorny, situation-specific details spawns thousands of decisions packed with potential for unintended consequences. Companies that try to manage implementation on their own – like defendants who hire themselves for lawyers -- often end up with advisors ill equipped for the job. Sufficient internal capacity seldom exists even at the largest companies. Medium and small companies, notwithstanding somewhat less complexity, invite outsized risks when, to save money up front, they plan to follow directions that come in the box. Errors multiply and so does the cost of unraveling them in a timely way.

Savvier managers set the stage by assessing key criteria they require in budgeting, planning and forecasting software. They set expectations accordingly. Then it’s time to find a partner with a sound grasp of every foreseeable option and nuance – and agility to find answers to questions that are not foreseeable.

Selecting the right partner in any venture calls for caution. If shortcuts cripple means to budget, plan and forecast financial performance, a company puts its future at stake. Seven basic questions initiate a sound framework for vendor selection:

  1. Does the vendor understand my industry and my business?
  2. Learn what industries a vendor can support with holistic, end-to-end solutions attuned to unique key line items and performance indicators. This is pivotal. No matter how smooth a sales pitch sounds, probe carefully for evidence that a vendor can deliver solutions geared to an individual business. Software that works well for a service business or the service component of a manufacturing business might fall short when it’s time to integrate service, manufacturing and distribution. Build a list of processes that encompass everyday and unique aspects of a business. Press vendors for their grasp of each one — or at least their ability to get up to speed in a hurry. Sales talk should address billing, reporting, general ledgers and seamless transitions from the old to the new. Test vendors on aspirational aspects of a business. No one wants a pivotal partner who can’t embrace inevitable changes to a company and its industry. Seek references acquainted with your type of business. Vendors will cherry pick references, so expand your search through contacts and candid reviews.

  3. If a vendor knows my industry, is confidentiality at risk?
  4. Selecting Budgeting & Forecasting Software Process & Best Practices

    Forewarned is forearmed when proprietary information is vulnerable. Never let up your guard. That said, top-drawer vendors of budgeting, planning and forecasting software launch programs but don’t usually get intimate with sensitive information. They want to know how a company conducts its business in order to develop basic forecasting architecture. A sound approach contemplates interactions with the supply chain and any ancillary relationships with, say, outsourced providers. Once the system works smoothly, based on the customer’s evaluation, vendors don’t peruse budgets, plans or forecasts. If ever one offers to share a rival’s proprietary information, consider it a red flag. You don’t need a lawyer to foresee a lawsuit, or an oracle to alert you that your own secrets are at risk. Look elsewhere.

  5. Does the vendor have a sufficient partner ecosystem to see my job to completion and beyond?
  6. This is a 21st Century version of asking whether a company has staying power in the marketplace. Nowadays, no single vendor owns an implementation front to back. Experts rely on networks of experts under one umbrella. Whoever is hired to hold the umbrella should have plenty of front line support and a deep bench if needed, along with standing in the software ecosystem to tap it for any challenge. Viability is paramount. Delve into it with questions reputable vendors will answer. Nothing is certain in the world, but all signs should indicate that the same vendor will be around to assist with an upgrade when the time comes.

  7. When should we talk price tag?
  8. Wait for it... Vendors will get to pricing eventually. Meanwhile, dig into all the reasons why a program has value, whether it’s cloud-based, located on premises or a hybrid. Pricing always varies accordingly. A number up front shouldn’t bias an assessment at the get go. Talking price up front tends to pigeonhole expectations. You need to know what expectations are feasible – not least because a rival may have access to them. A final conclusion rooted in what a budgeting, planning and forecasting solution can deliver is apt to find a friendlier audience than a truncated, cost driven solution, no matter what the price. Take the time needed. Don’t let a deal with an expiration date force a hasty decision.

  9. Do the vendor and solution provide ability to integrate with other 3rd party systems?
  10. A world interconnected in myriad digital ways requires systems agile enough to cope with different ways of doing things. If budgeting, planning and forecasting software speaks the language of one general ledger but can’t fathom data from other business units or supply chain partners, what sounds great may end up grating. Probe to make sure vendors don’t have barriers to working with other systems. If you can’t import, export, warehouse and validate data, a step forward might not be in the right direction.

  11. Can my vendor furnish support in every domestic or global region as we expand?
  12. Vendors should have ample bandwidth to support geographical expansion — even if it’s only on the horizon. A business based in the Southeast today may open for business on the West Coast or the Midwest tomorrow. A company in Delaware can’t wait three hours till a programmer in California wakes up; a California company at 6 pm can’t afford to find software management in Massachusetts has headed home for the day – or taken Patriot’s Day off. Likewise, a domestic business today is tomorrow’s global business. The right vendor will furnish end-to-end support, whether that means start to finish or New York to California. When going get hinkey, a dedicated service rep is a big step closer to solutions than lodging concerns with sales reps and account directors.

  13. When will I know that I know enough to select a vendor?
  14. The flipside of rushing to judgment is delaying too long. Haste makes waste, but don’t underestimate the consequences of excessive delay. The sweet spot is hard to predict in advance, but usually visible when companies get there. Once a checklist verifies that due diligence has identified internal requirements, all feasible solutions, all internal stakeholders and vendors with the geographic reach and a firm grasp of the business, it’s time to decide. Remember why the journey started in the first place: better budgeting, planning and forecasting yield better data-based business decisions. It won’t happen without a decision. If one vendor doesn’t stand out after presentations, demos and internal discussions have narrowed the list, don’t fear breaking a tie with gut instinct. The vetting is done; move on. You are probably right, but even if wrong the difference isn’t likely to be great, and less traumatic than the result of fence sitting while rivals race raid the garden.

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.

To learn more on this subject,attend CFO Dimensions 2013 in New York City, August 21-22. Register with code CFODKAR for a special $649 discount here.