A completely normal day in the finance department: Reporting tasks, financial statements, and financial reports need to be dealt with. But the data are becoming increasingly complex, economic requirements are rising, and there are more comprehensive regulations to follow. Your company is growing and thriving. That’s fantastic. But the finance team is struggling under the burden. Overtime is mounting in the battle to maintain control of overflowing Excel spreadsheets and corporate management tasks. And nevertheless, the first errors are cropping up.
Is this your company? Does the scenario seem familiar to you? You need a solution. And you’ve probably already heard of one: Financial Performance Management (FPM). An all-in-one solution for greater efficiency and security sounds enticing. But does the journey to get there seem too long to you? The range of providers too large? The benefits uncertain?
Tips and a checklist for selecting the right FPM vendor
With this article, we’d like to help you make your decision. We’ll show you the advantages of using FPM software and give you some take-home tips to keep in mind when looking for a vendor. To help you take that very important first step, we will also give you a specific checklist for selecting the right FPM software tool.
The benefits of FPM software for your company
FPM software reliably covers all areas of responsibility in the finance department with a single application, providing you with a holistic view of your financial data. It’s the ideal basis for sustainable corporate management.
The right FPM software provides you with:
- A tool that unites all financial processes in a single solution – for consolidation, planning, reporting, and analysis
- A holistic view of your financial data
- A transparent basis of data for well-founded strategic business decisions
- Faster access to validated information
You’ll benefit from the following advantages in your daily operations:
- Noticeable workload reduction throughout your finance team
- Fewer errors and less imprecision in your data
- More time for crucial analysis that can move your company forward
Selecting the right FPM software
When making a decision about Financial Performance Management software, we recommend the following steps:
Step 1: Internal needs analysis
Form a project team of individuals who have an interest in the new financial software. In our experience, the team should consist of stakeholders from IT, (group) accounting, controlling, and commercial management. This core team will make decisions about the specific requirements of the FPM software, prioritizing them, and setting a budget for the overall project. Sort the criteria into these categories: musts, cans, and nice-to-haves.
Step 2: Best-of-breed vs. complete solution
The range of FPM software on the market is extensive. For this reason, you need to think about the following questions very carefully: Should the best tool be identified for each area of application and integrated into your own IT infrastructure (best of breed)? Or is it better for the company if all of the defined needs are handled by a single software system from just one provider (single vendor solution)?
Even if trends favor the best-of-breed approach, this is still always an individual decision for you to make. The following factors will play a major role when making this decision:
- Your business model
- Your resources
- Your goals
- Your existing system environments
When selecting your future FPM software, we advise considering all possible options initially and then gradually narrowing these down to a short list. Avoid ruling out any particular vendor from the outset.
Step 3: Market analysis of FPM providers
As noted above, the range of options is very extensive. Determining which vendor will best meet the specific needs of your enterprise can quickly become overwhelming. We recommend the following procedure to gain clarity about the market: create a long list and gradually refine it into a short list.
Note down all FPM vendors that meet your needs in a long list. When doing so, do not be swayed from the outset by recommendations or familiar vendors. Instead, be open to all software options that may be right for you. Only by following this approach can you ensure that the evaluation will meet your specific needs.
Sources that may be useful when compiling your long list include the following:
- Overviews of the market and trends in specialist media
- Discussions with other industry colleagues
- Studies by various analysts, such as Gartner
Once your long list is complete, it needs to be whittled down to a relevant short list. This means reducing the number of potential providers to just a few vendors by assessing them against your catalog of requirements. When doing so, you should ask yourself questions like these:
- Does the software meet all existing needs and can it also be adapted flexibly to cover future requirements?
- Does the provider have a track record in the relevant subject areas?
- Is the vendor established in my market
- How do independent, external market observers assess the provider (e.g. analysts like BARC)?
- Is the vendor financially sound and is there a corresponding level of certainty for your investment?
Our tip: Draw up specific specifications or a catalog of your requirements and assign weightings to the different criteria. Then clearly list and rate each of the software tools against these criteria.
The choice of FPM software is a crucial step. After all, the purpose of the tool is to make life easier and reduce stress when dealing with sources of error, planning uncertainties, etc. The software should support the future of the company. For this reason, take the amount of time you need to make your decision. Examine each individual software package carefully. Rule out products that do not meet all of the “must” criteria. And also keep an eye on all of your “can requirements”. Take advantage of what is possible.
After going through this process, only two or three vendors should be left on your short list.
Step 4: Selecting the software vendor
After you have considered and evaluated your needs, only two or three vendors should remain on your short list. The selection process will otherwise take too long and will become confusing. In the final step on the journey to selecting the Financial Performance Management software that best meets your needs, arrange for your finalists to hold individual presentations. These will allow you to run through all of the relevant aspects, assess criteria, and eliminate misunderstandings on a one-on-one basis.
Our LucaNet experts also advise companies looking for optimal Financial Performance Management software to carry out these final steps before making their final decision:
- Gain confidence by talking to your finalists’ reference customers. Find out their honest opinions and answers to questions such as these:
- How do they rate the FPM vendor?
- How successful was the software implementation phase?
- What benefits have been gained from using the FPM software, in terms of efficiency and cost savings?
- What suggestions for improvement do they have for the FPM software?
- What mistakes and problems, if any, have they experienced?
- Consider asking for a proof of concept to be carried out. This is an opportunity for the vendors to demonstrate the suitability of their software based on data and examples provided by you.
Why a thorough comparison of FPM vendors makes sense
Yes, the journey to selecting the right FPM software is a long one. But it is worth the effort. In the end, you will have the perfect FPM tool from a professional vendor that delivers you fully integrated financial data. Ideally, your new FPM software will reliably cover all areas of responsibility in the finance department. With a few clicks, your solution will provide you with:
- a holistic view of your financial data;
- successful corporate management;
- maximum time savings.
E-book with a checklist for selecting a suitable FPM vendor
Do you just want to get started and call together your team of experts? Fantastic. But just a moment! Before doing so, read our free e-book, “How to choose the right FPM software”. The checklist for a more efficient finance department”.
To help you find the right software more quickly and effectively, our e-book also contains:
- a software selection checklist;
- benefits of a best-of-breed solution;
- tips for creating the long list;
- helpful questions for assessing FPM vendors;
- process steps for a structured selection process;
- all of the benefits that FPM software offers.
Get your copy of our e-book now and begin your quest to find the right FPM software with professional support.
DOWNLOAD THE E-BOOK NOW
Last updated: Apr 17, 2020
G2 ranked LucaNet as a market leader in its summer 2020 rankings for best Corporate Performance Management (CPM) software. Read about the software comparison and about top rated CPM software now!
Following the past two years, we´ve got another reason to celebrate in 2020: The BARC Score has once again named LucaNet its market leader!