Category Archives: Planning

EPM: Now More Than Ever

The theme of my presentation at past spring’s Host Analytics World was that EPM is needed in fair, foul, or uncertain weather.  While EPM is used differently in fair and foul weather scenarios, it is a critical navigational instrument to help pilot the business.

For example, in tougher times:

  • You’re constantly re-forecasting
  • You’re doing expense reduction modeling
  • You might do a zero-based budget (particularly popular among recently PE-acquired firms)
  • You’re likely to try and reduce capex (unless you see a quick rebound)
  • You’re probably making P&L, budget, and spend authority more centralized in order to keep tighter reins on the company.

In better times:

  • You model and compare new growth opportunities
  • You often build trended budgets more than bottom-up budgets
  • You adopt rolling forecasts
  • You increase capital investment and build for the future
  • You do more strategic initiatives planning
  • You decentralize P&L responsibility

These (and others) are all capabilities of a complete EPM suite.  The point is that you use that suite differently depending on the state of the business and the economy.

Well, now with the surprise election of our 45th President, Donald Trump, we can be certain of one thing:  uncertain times.

  • Will massive investments in infrastructure (including but not limited to, The Wall) happen and what effect will that have on economic growth and interest rates?
  • Will Trump deliver the promise 4% GDP growth that he’s promised or will the economy grow slower?
  • Will promised deregulation happen and if so will it accelerate economic growth?  What effects will deregulation have on key industries like financial services, energy, and raw materials?
  • What, as a result of this and foreign policies, will be the price of a barrel of oil in one year?  What effect will that have on key industries such as transportation?
  • Will Trump spark a trade war, increasing the price imports and reducing the purchasing power of low and middle-income consumers?  What effect might a trade war have on GDP growth?
  • What impact will all this have on financial markets and the cost and availability of capital?

I don’t pretend to know the answers to these questions.  I do know, however, that there is uncertainty about all of these questions– and dozens of others — that will directly impact businesses in their performance and planning.

If you cannot predict the future, you should at least be able to respond to it in agile way.

If your company takes 6 months to make a budget that gets changed once a year, you will be very exposed to surprise changes.  If you run on rolling forecasts, you will be far more agile.  If you have good EPM tools you will able to automate tasks like reporting, consolidation, and forecasting in order to free up time for the now much more important tasks of scenario planning and modeling.

Again, if you can’t know whether oil will be $40, $50, or $70 — you can at least have modeling out all three scenarios in advance so you can react quickly when it moves.

I’ve always been a big believer in planning and EPM.  And, in this uncertain environment, companies need EPM now more than ever.

The New Split CPM Magic Quadrants from Gartner

This week Gartner research vice president John Van Decker and research director Chris Iervolino took the bold move of splitting the corporate performance management (CPM), also known as enterprise performance management (EPM), magic quadrant in two.

Instead of publishing a single magic quadrant (MQ) for all of CPM, they published two MQs, one for strategic CPM and one for financial CPM, which they define as follows:

  • Strategic Corporate Performance Management (SCPM) Solutions – this includes Corporate Planning and Modeling, Integrated Financial Planning, Strategy Management, Profitability Management, and Performance Reporting.
  • Financial Corporate Performance Management (FCPM) Solutions – this includes Financial Consolidation, Financial Reporting, Management Reporting/Costing/Forecasting, Reconciliations/Close Management, Intercompany Transactions, and Disclosure Management (including XBRL tagging)

You can download these new CPM magic quadrants here.

What do I think about this?

  • It’s bold.  It’s the first time to my recollection that an MQ has included product from different categories.  Put differently, normally MQs are full of substitute products — e.g., 15 different types of butter.  Here, we have butter next to olive oil on the same MQ.
  • It’s smart.  Their uber point is that while CPM solutions are now pretty varied, that you can pretty easily classify them into more tactical/financial uses and more strategic uses.  Highlighting this by splitting the MQs does customers a service because it reminds them to think both tactically and strategically.  That’s important — and often needed in many finance departments who are struggling simply to keep up with the ongoing tactical workload.
  • It’s potentially confusing.  You can find not just substitutes but complements on the same MQ.  For example, Host Analytics and our partner Blackline are both on the FCPM MQ.  That’s cool because we both serve core finance needs.  It’s potentially confusing because we do one thing and they do another.
  • We are stoked.  Among cloud pure-play EPM vendors, Host Analytics is the only supplier listed on both MQs.   We believe this supports our contention that we have the broadest pure-play cloud EPM product line in the business.  Only Host has both!
  • In a hype-filled world, I think Gartner does a great job of seeing through the hype-haze and focusing on customers and solutions.  They do a better job than most at not being over-influenced by Halo Effects, and I suspect that’s because they spend a lot of time talking to real customers about solving real problems.

For more, see the Future of Finance blog post on the new MQs or just go ahead and download them here.

Host Analytics World 2016 EPM Keynote Address

We’re just finishing up a fantastic Host Analytics World 2016, with over 800 people gathered together in San Francisco to talk about enterprise performance management (EPM).   Here are a few pictures to give you a feel for the event.

Here’s 49ers football legend Steve Young delivering his keynote address:

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Here’s me delivering my keynote on EPM in fair weather and foul.

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Here’s an artsy shot of someone taking a picture during my keynote.

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And, of course, here are our mascots, Tick and Tie, stuffing bags for Project Night Night, the philanthropic activity we had at the conference cosponsored by Host Analytics and our amazing customer, Thrivent Financial.

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The conference has been superb and I want to thank everyone — customers, prospective customers, analysts, journalists, pundits, and partners — for being a part of this great event.

I find it amazing that at such a great time to be in the cloud EPM market that we have competitors more focused on business intelligence (BI), predictive analytics, and functional performance management than on core EPM itself.  At Host Analytics, we know who we want to be:  the best vendor in cloud EPM, serving the fat middle 80% of the market.  More importantly, perhaps, we know who we don’t want to be:  we don’t want to be a visual analytics vendor, a social collaboration vendor, or a sales performance management vendor — hence our partnerships with Qlik, Socialcast, and Xactly.

We serve finance, we speak finance, and we’re proud of that.  Oh, and yes, our customers, finance leaders, care about the whole enterprise so we offer not only solutions to automate core finance processes but also tools to model the entire enterprise and align finance and operations.

You can hear about this and other topics by watching the 75 minute keynote speech and demo, embedded below.

 

Finally, please remember to save the date for Host Analytics World 2017 — May 16 through 19, 2017.

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The Confusion Around Workday Planning

Workday’s planning strategy is enough to make an observer confused.

This far in, it looks pretty clear what happened:  Workday started out betting on Tidemark, but things didn’t work out (I’d guess because of Tidemark’s wandering eye and lack of focus on EPM), so they switched horses to Anaplan.  It happens.

But then it starts to get more interesting:

  • In January 2015, Tidemark COO Phil Wilmington leaves Tidemark (per his LinkedIn).
  • In mid-June of 2015, Workday announces leading a $25M round in Tidemark, rumored to be under fairly Draconian terms, including some non-trivial layoffs to cut the burn rate.

OK, it’s more confusing but it still looks explainable from the outside.  After switching horses to Anaplan, perhaps they found the grass wasn’t any greener, so they decide to switch back.  People get divorced and then remarried.  It happens.

Maybe Wilmington influenced things and was trying to help out his old company, or maybe he had nothing to do with it.  It’s impossible to see from the outside, but at the same time hard to believe he had nothing to do with it.

But then things get even more interesting:

  • Two weeks later, on June 30 2015, Workday announces its own “enterprise planning, budgeting, and forecasting” solution, a seemingly independent initiative without any reference to Tidemark’s technology in the announcement.  Moreover, it appears to be a a hurried, deep future announcement with availability specified sometime “in calendar year 2016.”
  • Even today, almost 2 months after the announcement, the “Learn More” link on the products page for Workday Planning points to the press release, in an actual circular reference from the press release to products page — something I can’t recall ever seeing before in my career, and certainly implying both a hurried announcement and a lack of meat to support it.

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What’s going on? Who knows?  (I have a guess and maybe I’ll share it one day in a separate post.)

But regardless of the underlying stories, the whole situation says a few things to me:

  • It’s another demonstration of why ERP and EPM are different categories.  Even a highly sophisticated ERP vendor like Workday can’t get its EPM strategy right.  It’s a different market, with a different buyer, with a different purpose, and which uses different and specialized technologies.  This pattern existed in the on-premises days and has continued into the cloud.
  • As such, it validates the desire buyers may have to go best-of-breed and buy EPM from a dedicated EPM vendor as opposed to expecting to see a great solution rolled into an ERP suite.
  • Most importantly, Workday’s pattern suggests it will be years before their EPM strategy is clear, their in-house product is delivered and proven, and whether the final strategy rides on their in-house product, Tidemark’s technology possibly picked up via a future acquisition, or some hybrid thereof.

Let me conclude by reminding anyone interested in doing EPM functions — like planning, budgeting, forecasting consolidation, reporting, and analytics — against Workday data, that at Host Analytics we have a clear strategy for Workday customers who want proven, cloud-based enterprise performance management (EPM).

My Favorite Quotes on Planning

“In preparing for battle I have always found plans useless, but planning indispensable.” — Dwight Eisenhower

“God laughs when Man plans.” — Yiddish proverb

“Everyone has a plan until they get punched in the mouth.” — Mike Tyson

“Plan your work.  Work your plan.”  — Grandpa Kellogg (and many others)

“Failing to plan is planning to fail.”  — Alan Lakein

“A good plan violently executed is better than a perfect plan executed next week.”  — George Patton

“Plans are only good intentions unless they immediately degenerate into hard work.”  — Peter Drucker

“A goal without a plan is just a wish.”  — Antoine de Saint-Exupery

“Proper planning and preparation prevents piss-poor performance.”  — Military Acronym (also known as the 7 Ps)

Video of my Host Analytics World 2015 Keynote Presentantion

Thanks to the 700+ folks who attended my keynote address at last week’s Host Analytics World 2015 conference in San Francisco.  We were thrilled with the event and thank everyone — customers, partners, and staff — who made it all possible.

Below is a 76-minute video of the keynote presentation I gave at the event. Enjoy!  And please mark your calendars now for next year’s Host Analytics World — May 9 through May 12, 2016 — in San Francisco.

Host Analytics Rocks the New Ovum Decision Matrix for EPM

Every leading industry analyst firm has their own 2×2 matrix — Garter has the magic quadrant, Forrester has the wave, and Ovum has the decision matrix.

The intent of each of these graphical devices is the same:  to provide a simple picture that selects the top vendors in a category and positions them by (1) a rating on the quality of their strategy and (2) a rating on the quality of the execution of their strategy.

While the ratings are inherently subjective, each customers has his/her own unique requirements, and “your mileage may vary,” these matrices are useful tools in helping customers make IT supplier decisions.

To start with a brief word from our sponsor, I’m pleased to note that:

  • Host Analytics is the best-positioned cloud EPM vendor on Gartner’s magic quadrant for what they call CPM (corporate performance management.)
  • Host Analytics is the only cloud vendor in the leaders segment on Forrester’s wave for what they call FPM (financial performance management).

While the temptation is to immediately examine small positioning deltas of the charted vendors (as I just did above), I’d note that one of the best uses of these diagrams is to instead look at who’s not there.  For example,

  • Anaplan is omitted from Gartner’s MQ, Forrester’s Wave, and Ovum’s DM.  I believe this is because they come to market with a value proposition more around platform than app, and that most analysts and customers define EPM as an applications market.  In plain English:  there is a difference between saying “you can build an X using our stuff” and “we have built an X and can sell you one.”
  • Tidemark is present on Forrester’s wave, but omitted from both the Gartner MQ and the Ovum DM.  I believe this is because of I what I’d characterize as “strategic schizophrenia” on Tidemark’s part with an initial message (back in the Proferi era) around EPM/GRC convergence, followed by an enterprise analytics message (e.g., infographics, visualization) with a strong dose of SoLoMo, which bowed to Sand Hill Road sexiness if not actual financial customer demand.  Lost in the shuffle for many years was EPM (and along with it, much of their Workday partnership).

I’m pleased to announce that Host Analytics has once again received an excellent rating on one of these matrices, the Ovum Decision Matrix for EPM 2014-15.

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  • The only cloud vendors on the matrix are Host Analytics and Adaptive Insights (fka, Adaptive Planning).
  • Host Analytics is shown edging out Adaptive Insights on overall technology assessment.
  • Adaptive Insights is shown edging out Host Analytics on execution, which is quite ironic given that Adaptive recently ousted its CEO, something, shall we say, that typically doesn’t happen when execution is going well.