Adaptive Insights Highlights Importance of Strategic Finance

Adaptive Insights held its annual user group meeting recently. A theme sounded in several keynote sessions was the importance of finance departments playing a more strategic role in their companies. Some participating customers described how they have evolved their planning process from being designed mainly to meet the needs of the finance department into a useful tool for managing the entire business. Their path took them from doing basic financial budgeting to planning focused on improving the company’s performance. This is one of the more important ways in which finance organizations can play a more strategic role in corporate management, an objective that more finance organizations are pursuing. Half of the companies participating in our Office of Finance benchmark research said that their finance organization has undertaken initiatives to enhance its strategic value to the company within the last 18 months.

We believe that presenting its software as an aid to make the planning process more strategically valuable is a product strategy that is essential for the long-term success of planning software vendors. It was a theme in Adaptive Insights’ recent release of its Adaptive Suite and revenue planning software.

vr_ibp_planning_software_provides_faster_answers_updatedCompanies do many kinds of planning, not just budgeting. They plan sales, they determine what and how they will produce products or deliver services. They plan the head count they’ll need and how to organize distribution and the supply chain. They also produce a budget, which itself is a financial plan. The planning process involves discussions about objectives and the resources and tactics that people need to achieve them. Our benchmark research finds that dedicated applications are more effective tools for planning than are desktop spreadsheets (which nevertheless are still the most widely used technology for planning). For example, dedicated planning software is more able to get to underlying causes behind variances immediately during a performance review meeting. Users can apply the information that’s in the application when reviewing results and adjusting goals and objectives to reflect changes that have taken place in the business. The research shows that organizations that use dedicated software more often can get to the underlying details of the difference between plans and actual results and therefore are more able to make fast decisions about what to do next. Spreadsheets are inherently less capable of drilling down into underlying details.

Adaptive Insights has a suite of planning, analysis, reporting and consolidation applications that mirror the evolution of the business planning category. I coined the term “integrated business planning” more than a decade ago to describe an approach to planning that brings together financially focused budgeting and forecasting activities with various stand-alone functional planning efforts. The objectives of this approach are to provide senior executives with a comprehensive view of future expectations for their business; to set a baseline for performance measurement; to assess performance relative to these baseline objectives; and to periodically adjust objectives and resources in a coordinated, strategic fashion as conditions evolve. Integrating the business planning activities of the various functional groups within a company is best accomplished by providing a single planning environment in which each group can plan its part of the business the way it prefers, compare its actuals to plan using preferred analytical methods and easily report and communicate results within the group. Each planning process can be loosely coupled in that the cadence, items, measures, dimensions and other planning elements fit the needs of that specific part of the business. At the same time, because all planning takes place in a single environment, it’s easy to bring together the necessary information from each of the individual business unit plans to create a consolidated, forward-looking view of the company. It’s also easy to provide control and consistency across planning units by ensuring, for example, that all plans use the same projected benefits costs, commodity prices, exchange rates and other elements that will affect all parts of the organization. Our benchmark research on next-generation business planning finds that companies that integrate their planning by directly linking plans get better results: Two-thirds that have direct links said they have a planning process that works well or very well compared to 40 percent that copy and paste information and just one-fourth that have little or no connection between plans. Well-executed planning is the best way to get everyone onto the same page to ensure that the company is organized in executing the plan. Setting and to a greater degree changing the company’s course require coordination. It enables understanding of thevr_NGBP_02_integrated_planning_works_better impact of the policies and actions in one part of the company on the rest of the company. Information technology has the potential to make business planning more useful, and to help improve a company’s performance and increase its competitiveness.

From a financial management standpoint, it’s essential to be able to project pro-forma balance sheets and cash flows. When all operational planning is feeding the core business model, the future state of a company’s balance sheet and cash flow can be more realistic than when it is only loosely connected. Moreover, it’s possible to quickly and accurately compare the impacts of various operating scenarios on the company’s finances, assess the impacts of various financing alternatives and project how different capital market conditions will affect the company’s overall financing costs across multiple operating scenarios. All of this is possible using spreadsheets, but doing so is far more time-consuming (and therefore impractical) and potentially much less accurate.

Another reason why a dedicated planning application a better planning environment than desktop spreadsheets is that it facilitates the separation of planning into things and the financial aspect of those things: a unit-times-rate structure. While financial planning focuses on money, the rest of the business plans mainly in terms of things: units produced, head count at various pay grades, tons of raw materials and production yields, to name just a few. Having the ability to model units and currency amounts separately makes it far easier to measure performance in ways that are meaningful to each part of the business. In its most simplistic form, it helps planners determine immediately and unambiguously whether variance between the plan and actual results was driven by units, a price or cost variance or both.

Our research on enterprise use of spreadsheets shows that companies that use spreadsheets for forecasting, planning and budgeting usually spend much more time in analyzing and reporting results than users of more appropriate tools do. Dedicated software automates this process, enabling finance departments and other functional units to spend less time on repetitive tasks while providing accurate and consistent information to executives and managers. Adaptive Insights recently added to its suite Office Connect, which facilitates creating and updating reports in Microsoft’s Excel, Word and PowerPoint vr_NGBP_09_spreadsheets_dominant_in_planning_softwareapplications, enabling departments to operate more efficiently and speed the availability of performance reports. For example, using the software, standard monthly tables and charts can be instantly updated each month to speed the production of spreadsheets, narrative reports or presentation decks for monthly board meetings.

I have long advocated the use of dedicated planning applications rather than desktop spreadsheets for handling planning processes. The inherent technology limitations of spreadsheets make them a poor choice because they consume time needlessly and prevent organizations from being able to forecast, plan, analyze and replan effectively. Yet spreadsheets remain the leading technology used for planning. Our recent planning research finds that, across 11 different types of business planning, on average seven out of 10 companies use spreadsheets. I recommend that all midsize and large companies consider replacing spreadsheets with a dedicated planning application that provides a unified environment for planning across the entire enterprise. Midsize companies and midsize divisions of large enterprises should consider Adaptive Insights for this role.


Robert Kugel – SVP Research

Panviva Embraces Cloud Computing for Guiding People and Business Processes

When I last wrote about Panviva I likened its product SupportPoint to a smart agent desktop – a system that helps contact center agents access the information they need to handle customer interactions, guides them through the process of handling interactions and offers advice on what to say next (for example, which product to upsell). Several trends have emerged since then. Two of our recent benchmark research vr_NGCE_Research_05_who_handles_customer_interactionsprojects, next-generation customer engagement and next-generation customer analytics, confirm that handling interactions is now an enterprise issue – every business unit except IT now handles interactions. This change creates challenges. More kinds of employees need access to information relevant to the type of interactions they handle. Yet each business unit typically has its own processes and systems to support the way it handles interactions. A third issue is that more employees handle interactions away from their desks and need access to information on mobile devices. The situation is further complicated because, as our research projects also show, customers now interact with organizations through more channels, and companies must provide easy access to those channels.

All together these issues make it hard for companies to provide consistent information and experiences no matter who customers interact with or which channel they use. Our benchmark research into agent desktop systems shows that the desktops most employees use hinder them in handling interactions: 65 percent of organizations said it increases average handling times, 49 percent said it degrades the customer experience, 39 percent said it results in data entry errors and 31 percent said it negatively impacts agent satisfaction. Despite this, the research shows only 29 percent of companies provide agents with a smart desktop.

Panviva SupportPoint provides capabilities similar to a smart desktop but in a different way to most other desktop products I cover. I outlined many of its key functional capabilities in my previous perspective. Panviva continues to refine and add capabilities, but the key fact is that it doesn’t disrupt current practices by replacing existing systems: Users create “smart scripts” that work along with their existing systems to guide users in carrying out their tasks, and data is automatically pushed and pulled between systems so ll users see the same information and all systems are updated simultaneously. To increase the adoption of its product, in July 2014 Panviva made a bold move by withdrawing its on-premises version of the product and moving to cloud-only deployment. This changes not only delivers the usual benefits of cloud systems such as lower upfront and ongoing costs but also makes the system more easily accessible to distributed sites and users, and to mobile workers.

At about the same time as it moved to the cloud, Panviva created what it calls a customer experience team, which is much the same as a professional services team. The team helps customer companies set up and operate the product and demonstrates how to use its innovative features. Our benchmark research into next-generation customer engagement shows that many companies struggle to manage the customer experience: Only 14 percent reach the highest Innovative level for this area, and even fewer (8%) are Innovative in process management. Panviva’s customer experience teams shows users how to improve processes by using the system, and more efficient processes typically help employees become more effective in their work.

During a recent update, I learned that the combination of added capabilities, being cloud-based, having more partners and deploying the customer experience team is paying off forVR2014_Leadership_AwardWinner the company. Executives said that Panviva’s customer base has grown  13 percent; the new customers are cloud-based. One of its customers, Health Alliance Medical Plans, won our 2014 Leadership Award for contact and call center management by demonstrating how by using Panviva in conjunction with it has achieved improved business success. This example of success confirms findings of our agent desktop research, which shows that organizations that adopt such systems enable more employees to handle interactions (which 57% said), improve collaboration across business units (49%) and reduce average handling times (48%).

I recently wrote that a smart desktop can help organizations overcome issues in providing superior customer experiences, particularly as relates to providing consistent, personalized experiences, regardless of which business unit the customer deals with. Cloud-based systems facilitate organizations making it easier for a wider, more distributed set of employees to access the system, meaning SupportPoint can be used to improve back-office tasks such as completing a customer insurance claim. It includes reporting and analysis tools so managers can assess how well processes are working, decide which paths produce the best outcomes and spot potential improvements.

Early business process management systems typically allowed users to visualize processes, but being static, they relied on manual effort to spot improvements. Newer systems include capabilities to capture events (data) which allows users to monitor how processes flow, including timings, and this analysis can be used to spot improvements. SupportPoint supports both these capabilities and goes beyond them. Processes can be visualized as smart scripts which proactively guide users through a process, potential changing the flow depending on data entered or retrieved from systems.  So look beyond the branding as I believe it can be used very effectively to improve handing on customer interactions, and thus the customer experience. To that end, I recommend companies working to improve the customer experience evaluate how Panviva can help them achieve both operational efficiency and effectiveness.


Richard J. Snow

VP & Research Director