4 priorities to consider when buying FP&A software (based on industry analyst reviews and reports)

Looking to buy FP&A software, but confused about which financial performance management (FPM) solution might have the most impact for your organization? Wondering what to look for “under the hood?” Thankfully, there are numerous credible FP&A software industry analysts who are closely engaged with vendors and customers, testing and demoing the latest products and platforms, and tracking precisely what finance departments are prioritizing for their businesses.

Today, we’ll give you all the tips you need to buy FP&A software, with highlights from recent analyst output on financial performance management. We’ll explore what these industry experts have determined to be the most critical components to consider. For financial analysts and CFOs, these areas should be considered top priorities as they seek to continue their digital transformations and invest in finance technology.

What is financial performance management (FPM), and how can buying FP&A software help?

Financial performance management (FPM) is the way a company manages financial processes across the entire organization, and includes budgeting and planning, reporting and analytics, financial consolidation, and intercompany management. This is where many companies may look to invest in software to support.

This kind of software may be referred to by many different names. You may have previously heard of FP&A software, budgeting and planning software, Corporate Performance Management (CPM), Enterprise Performance Management (EPM), and of course, Financial Performance Management (FPM)--which is the term that is increasingly favored by analysts and within the industry today. This software can be web-based, cloud-based, or on-premise.

Having FPM or purchasing FP&A software within an organization often signals high financial maturity. The more automated and dynamic your finance processes are, the more well equipped you are to scale as your company and needs grow. In contrast, if you’re relying on static platforms like spreadsheets to manage all or most of your finance processes, it may hinder your ability to make decisions, adjust plans, collaborate effectively, and drive performance overall.

Let’s hear more from industry analysts on why organizations turn to FP&A software.

Why organizations are implementing financial performance management

Every organization has their own unique reasons for seeking out FPM or investing in FP&A software, but some notable themes are consistent among prospects and supported by analysts:

Too much data in too many places. Data spread across too many platforms, systems, spreadsheets and documents.

Manual business processes take too much time and are hard to track. This includes report creation, data collection, forecasting updates, and more.

Collaboration is lacking and time-consuming across broader teams.

Recognizing these challenges as significant hindrances to improving performance, many analysts direct stakeholders to some form of FP&A software or financial performance management.

But what’s most important? Up next: a review of top features to look for when considering FP&A software in 2024, based on reports and insights from industry analysts.

Prioritizing FP&A software capabilities for financial performance management

To scale their businesses without having to increase headcount, analysts recommend that organizations seek a financial performance management solution that:

• Reduces manual processes to accelerate reporting and analysis
• Maintains an intuitive data integration web interface
• Leverages AI-powered automation
• Provides accurate, real-time insight within an accessible, user-friendly dashboard

Let's dive deeper into these priorities.

Financial budgeting and planning – the heart of the matter

Not surprisingly, most users prioritize financial budgeting and planning above most other functionalities. Dresner’s 2023 Wisdom of Crowds® EPM Market Study, for instance, found that forty-eight percent of organizations rate financial budgeting and planning capabilities as critically important to their FPM implementation strategies.

Why? For one thing, budgeting and planning software can consolidate relevant metrics into one application, reducing duplication, and minimizing errors. With automatic updates, organizations always have the most up-to-date information on hand.

A peek at Prophix’s Budgeting & Planning capabilities

Don’t have financial budgeting and planning software yet? Check out our blog on spreadsheets vs. FPM software to learn why Excel is holding you back.

Integration, intelligence, intuition emerge as priorities

In addition to financial budgeting and planning, some additional core FPM processes include financial consolidation and reporting, modeling, analysis, and monitoring of key performance indicators (KPIs). As BPM Partners highlights in its 2023 BPM Vendor Landscape Matrix, “...the focus this year for companies looking for new or replacement systems are offerings that are integrated, intelligent, and intuitive.”

The report continues: “Integrated refers to systems that integrate financial, operational, and strategic planning companywide.”

This means organizations should be seeking to take control of financial data with an intuitive data integration web interface. Users should have the ability to quickly add and manage data integrations without needing to call on IT. Integrations should be simple to set up without relying on complex coding or reliance on costly third-party solutions.

Learn more about set it and forget it data integration.

Leveraging the power of AI for FP&A

BPM’s report also states “vendors have continued to add new AI capabilities to their products, but the most important advance is that they have made them more accessible to more users.”

As a result of these advancements, organizations can move away from ad hoc analysis to truly get the answers they need. AI powered automation will instantly help organizations understand variances over time or between scenarios, letting them know, for instance, which factors drove the rise or fall of a value on a report as well as the breakdown of the underlying data. Other intelligent applications in use right now include the rapid creation of meaningful reports that empower stakeholders to self-serve, as well as natural language AI that gives users the story behind their data visualizations.

An example of Prophix’s AI insights in action, generating narrative for line items in a report

Check out more information on the power of AI in the finance department.

System useability is key for any FP&A software

Finally, BPM emphasizes the critical importance of system useability. “It doesn’t matter how robust the functionality is if you need to take multiple classes or scour online documentation to figure out how to use it.”

The ideal FP&A software for financial performance management enables organizations to allocate resources accordingly with real-time insights, dynamic reporting, and user-friendly dashboards. And it relies on advanced visual analytics that offers access to accurate, secure, and reliable data, providing visibility into overall performance. The ability to drill into and drill across data to easily find needed answers, when they’re needed, ensures that organizations can make the most informed decisions based on real-time insights.

Ready to drive business performance

The bottom line: as more organizations, particularly mid-sized businesses, contend with various market challenges – from high interest rates to global economic uncertainty – investing in financial performance management is a must. FP&A software enables these organizations to connect all of their planning activities, simplify the process of collecting and consolidating data from disparate business units and visualize that data company-wide. 

If your organization’s finance department is ready to undertake a digital transformation and implement financial performance management, the advice and data provided by industry analysts can help you make a significantly more informed decision.