The Next Generation of Cloud Financial Planning & Analysis: Simple, Collaborative, and Real-Time

Simple, Collaborative, and Real-Time
The Next Generation of Cloud FP&A

1 The History
Before organizations could rely on technology to assist in financial planning and analysis (FP&A), there was a
lot more guesswork involved and a lot less accuracy. As business solutions, such as Enterprise Performance
Management (EPM), were introduced, business leaders were able to remove a lot of that guesswork and create
forecasts based on historical data.
As this technology has evolved to support the FP&A needs of organizations, new ways of consuming
technology were developed – enter cloud technology. Cloud solutions enable business leaders to
immediately access information wherever they are. These solutions have provided cost-effective, easily
implemented and updated alternatives to spreadsheets. But as cloud technology has increased in popularity,
it’s new-ness has worn off and now organizations are looking for features that are simple, highly collaborative,
and enable high performing FP&A processes resulting greater accuracy and effectiveness.
Current planning, budgeting, and forecasting processes are just too difficult to complete within a reasonable
amount of time without disrupting a business. In addition, organizations are finding it difficult with their current
technology and applications to get accurate results due to market volatility.

2
These organizations understand that in order to improve accuracy, they must get a better understanding of
the business drivers that impact performance, as well as involve more key stakeholders in order to ensure that
all essential information is accounted for. These pressures call for changes to the FP&A process, as well as the
technology that supports it.
Organizations are in need of evolved solutions that are simple, but also enable collaboration and more effective
analysis of real-time data.
Make it Simple, but Effective
The History
26%
30%
32%
37%
0% 10% 20% 30% 40%
Inability to trace business success to its key
components
Poor communication, coordination, and
collaboration across departments or divisions
(both upstream and downstream)
Market volatility creates the need to dynamically
account for change
Current budgeting and forecasting process is too
long and resource-intensive
Percentage of Respondents, n = 201
Source: Aberdeen Group, August 2014

3 Preparing for Planning
Top performing organizations look for solutions that can provide the essential information and process flows needed to
effectively and efficiently plan, budget, and forecast.
When selecting a solution, organizations need to consider deployment method. Due to cost concerns,
easy implementation, and recurring updates, cloud technology has been an attractive alternative to
spreadsheets for organizations that are looking to improve their FP&A processes. In fact, cloud budgeting
and planning solutions have been around for over ten years, and while the majority of organizations today
have deployed on-premise, the Best-in-Class are currently more likely than All Others to utilize a cloud
financial application.
44%
66%
32%
51%
0%
10%
20%
30%
40%
50%
60%
70%
Implemented ERP Solution Implemented tools to aid in financial
planning, budgeting, and forecasting
Best-in-Class All Others

4 Investigating Performance
Improvement
Automatic, recurring updates do a good job of continuously improving a solution to become more effective, but
new technology has emerged that calls for a revolution in the functions and features that are included with cloud software.
Today, half of organizations with cloud solutions have business analytics embedded into their solutions. This improves the
ability to understand trends and the potential impact of actions. These capabilities improve performance in FP&A because
they enable business users to determine relationships and visualize potential future outcomes. It takes a lot of the
guesswork out of planning, due to intelligence that employees simply could not apply on their own.
Additionally, only 22% of organizations with cloud technology have access to in-memory analytics technology, with
another 23% planning to implement. This technology greatly improves the speed of analysis and enables users to plan
and analyze more data sources, with larger amounts of data, at greater levels of detail more quickly. They can therefore
immediately apply analysis. In volatile markets where business conditions quickly change, this can become an extremely
valuable capability. Not only does this impact performance but it can also improve collaboration.
The New Generation of Cloud
50%
22% 22%
17%
23%
37%
0%
10%
20%
30%
40%
50%
60%
70%
80%
Business analytics In-memory analytics Social collaboration
technology used
within the planning
process
PercentageofRespondents,n=201
Plan to Implement in the Cloud
Currently Implemented in the Cloud

5 Simple and Social
The next generation of cloud financial applications should also include social collaboration technology.
In the planning process, this can include activity streams and comments, but also the ability to ask for input automatically
when information is needed from key stakeholders. This is accomplished in-context to ensure that budgets are rolled-up
and completed as needed. Combined with business analytics that are embedded in applications and in-memory
computing, social collaboration rounds out the technology environment of an organization with a modern approach
to FP&A. Ultimately, this new technology environment needs to evolve to enable capabilities that add simplicity while
facilitating high performance FP&A.
Need for Simple and Collaborative Solutions
53%
21%
72%
38% 43% 55%
30%
41%
28%
41% 37%
38%
0%
20%
40%
60%
80%
100%
120%
Business users are
able to create
reports / charts in
a self-service
capacity
Real-time,
contextual
visualizations of
business
narratives
Business units
work
collaboratively
with finance
throughout the
budget / planning
process
Ability to
incorporate
business drivers
into the on-going
forecasting
process
Ability to perform
“what if”
scenarios and
change analysis
Ability to re-
forecast as
market conditions
change
PercentageofRespondents,n=201
Plan to Implement in the Cloud Currently Implemented in the Cloud

6 Self-Service
Self-service significantly impacts ease of use and helps to mirror the look and feel of consumer software. Rather than
relying on IT, these business users can visualize data in ways that are most consumable to them, as well as better
understand the connections between business drivers and data sources. Since it is simple and self-service, employees
can do this to react immediately. This includes the ability to understand the impact of changes in business drivers, such
as the costs of certain materials and how long that impact will take to hit the business (as seen with timeline charts).
One capability that could be included is the ability to provide real-time contextual information, which may be supplied
by other key stakeholders through social capabilities.
Not only do users demand a FP&A process that is simple and collaborative, but top performing
organizations also insist that their technology helps them to create more accurate forecasts
through improved analysis. These features include the ability to incorporate business drivers
into the forecasting processes using embedded analytics, as well as scenario analysis. They
can then mix and match different strategies and determine likely outcomes. This promotes
high performance in FP&A since accuracy is easier to attain when intelligent formulas can be
applied that combine historical performance with forward-looking capabilities. While small
percentages of current cloud users have these capabilities, the percentage of cloud users that
plan to implement them in the future is evidence of the need for a new generation of cloud
solutions that feature them.
83%
Of businesses using cloud solutions
can create charts and reports in a
self-service capacity or would like
to in the near future.

7 Checklist
Today’s cloud solutions can be a foundation of FP&A processes due to ease of implementation,
access, and recurring upgrades. But the current generation of solutions lacks the usability, and collaboration and embed-
ded analytics capabilities that cloud users are clamoring for. Cloud solutions must evolve to meet those needs. But just
as cloud solutions must improve, so should your internal processes in your quest for FP&A success. If your organization
would like to improve these processes, use the following below is a quick checklist to keep in mind when selecting a
solution:
• Embedded and in-memory analytics
• Social collaboration technology
• Ease of use and extensibility
• Contextual information
• Real-time insight and agility
Use these recommendations to improve your selection criteria as you investigate the next generation technology that will
promote a high performing, simple, and collaborative FP&A process.
Read the Report >

The Next Generation of Cloud Financial Planning & Analysis: Simple, Collaborative, and Real-Time

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