In a previous article, I looked at building a solid foundation for transformation. Here, we provide an overview of the marketplace, concentrating on the different genres of software.
The technology landscape can be confusing. Technology continues to advance at a rapid pace. It has enabled new vendors to enter and disrupt the market with solutions that leverage cloud and AI. The established vendors are being challenged and, in some cases, displaced. If you’re going to make meaningful digital transformation in your organisation, you need to understand types of software that’s available, and what it can do.
Corporate Performance Management (CPM)
The tech landscape has changed in recent years with the recognised enterprise solutions (e.g. IBM, Oracle and SAP) challenged by newcomers focused on this market.
This is the most common genre of software in terms of finance team need and number of products. Within this category, I include solutions that cover the core processes of the finance team; financial consolidation, budgeting/planning, reporting and disclosure.
The budgeting and planning process is one that most organisation perform. Responsibility for this may be deployed to many users, necessitating high user numbers. The benefits to an organisation of a best-practice planning process can be very high, as seen during the recent crisis.
As a result, the many global vendors delivering tried and tested solutions make this an extremely competitive market. There is a high level of functional commonality across the solutions. You’ll find product differentiation in the more complex requirements, such as the ability to deal with large data sets or predictive capability.
Financial consolidation is a less common process. It is formulaic and repetitive characteristics that allow a high level of automation. There are a handful of vendors who focus their offering primarily on consolidation. However, most of the vendors who specialise in planning will also offer consolidation, although it may have limited functionality and be more akin to aggregation.
Planning and consolidation solutions will come with an embedded reporting capability. Quality and capability can vary. If necessary, it can often be enhanced by the use of specialist Analytics Software (see below)
Strong integration with Excel is now provided as standard by most vendors. An increasing number have extended this to include PowerPoint and Word. This functionality improves the control and efficiency of the ‘last mile of finance’, the automation of documents that contain numbers and narrative, such as management report books or annual reports.
There are a few vendors who specialise in ‘Disclosure Management’ and who have expertise at delivering regulatory compliance, such as iXBRL tagging. The benefit of these solutions is that they can source data from multiple systems, not just CPM.
Analytics is a mature and crowded market. Traditional business intelligence (BI) providers continue to develop dashboard and reporting capabilities that have been their bedrock for over a decade. Data visualisation is now an integral part of this, as is the notion of self-service. Most established BI tools mostly share standard feature sets.
Disruptive newcomers have entered the market, bringing new technologies to the table that are challenging the old guard. It includes AI-powered tools that will answer questions and using analytics data to help predict outcomes and successful courses of action. CFOs should do their research to make the most of business intelligence.
Close is an overlooked area when planning a transformation but a great place to start. The software in this area improves the control and visibility of the process by providing extensive workflow capability. Also, you can automate processes using Robotic Process Automation (RPA). You can find efficiency improvements in reconciliations (e.g. bank, accruals, prepayments) as well as transactional matching (e.g. intercompany).
Many of the CPM solutions will offer some functionality around financial close. However, there are a small number of vendors who specialise in financial close. These solutions enable ‘out-of-the-box’ configuration and have deep functional capability beyond that offered by CPM vendors.
Accounts Payable and Receivable (AP and AR)
There is an increasing number of vendors delivering solutions focused on the AR and AP. Platforms often work alongside an ERP to automate and optimise processes. An example of this is the automation of cash allocations within AR.
For organisations that have a high level of activity around AP and AR, there can be significant benefits to be found.
Robotic Process Automation (RPA)
I have already discussed the use and availability of RPA in finance focused solutions. Specialist RPA vendors have recognised the potential for automation within finance. As a result, we are seeing an increasing number of vendors marketing their products to the finance team.
I will be keeping a close eye on developments in this area in the coming weeks as I review some of the vendors in this area and feed this back to the GenCFO community.
GenCFO Top 100 Tech Showcase
In the coming months, we will be launching our Top 100 Tech Showcase, which will list software vendors that will be of interest to finance teams with details of their solutions and the problems they solve. You will be able to search this list to find solutions that meet your requirements.
If you are a vendor and are interested in being considered for our showcase, please email me at [email protected].