The original Gold Rush was a mad, desperate scramble. People hoped to get rich as quickly as possible. The gold rush that’s happening within the corporate performance management space is different. In fact, it’s a lot more promising.
When more than 300,000 people flocked to California in the mid-1800s, for example, little was certain. You could pan for gold along streams and rivers. There was no guarantee of finding anything, though. You could stake a claim to mine a specific spot. There was still a risk others would dispute it. The wealth, when it came, was enjoyed by a few.
Contrast this with what BPM Partners has described as the Gold Rush in corporate performance management (CPM). The activity it analyzed in its 2021 Pulse of Performance Management Survey was telling, to say the least.
Investors aren’t panning for gold without a real strategy. They’ve taken the time to watch how CPM is helping mid-market companies. Specifically, they’re seeing how technology can help them manage their finances through the pandemic.
The result? More than $1 billion of equity investments poured into CPM vendors in the first six months of 2021. The implications here are crystal clear:
This ultimately boils down to greater choice for mid-market firms. It doesn’t matter whether you’re a controller, CAO, accounting VP, or CFO. Continuous forecasting and scenario modeling, financial close and consolidation, are moving out of traditional silos to a unified set of finance and accounting processes.
For investors, the gold is in the growth of CPM firms. For mid-market finance professionals, the gold is in the easy ability to find the best financial consolidation and close management software to meet their unique - and growing - needs.
The BPM Pulse Survey is a staple of the performance management space and its results are well worth examining. They’re based on almost 500 interviews with hundreds of finance and accounting customers, 63% in the mid market.
BPM Partners also spoke with customers from all the vendors in the sector - from traditional mega-vendors to modern, purpose-built consolidation software providers.
To see how Fluence did, download the 2021 Vendor Landscape report (spoiler alert: we did really, really well).
Back to the big picture, here are my takeaways from BPM’s broader research report.
Even before the pandemic, the business case for overhauling consolidation was practically writing itself.
It was obvious if you’d been relying on manual processes and tools. Spreadsheets are familiar and cheap, but they lack back-end sophistication. Errors creep in. Version control can be a mess. Yet many companies that started out small were in the same place once they’d reached mid-market level.
The BPM Partners study shows how far we’ve come since then. Dedicated performance management software adoption today is at more than 50%.
At the same time, the study shows how far many finance teams still have to go. For example, 26% continue to use an on-premise CPM system and 22% still rely on Excel spreadsheets. That’s almost the same as the proportion of those using a cloud-based system.
This makes sense because we often associate on-premise technology with control. It seems like less of a risk. But those attitudes are quickly changing because:
Cloud-based solutions have another, often overlooked advantage: the ongoing, industry-wide investment in enhancing them. Contrast that with on-premise applications which usually have no clear roadmap or are confirmed to be approaching end of life. These are called “legacy” technologies for a reason.
If you can bring greater speed and accuracy to consolidation, the cloud is a sure bet. That’s not the only thing finance professionals want, though.
Of course, whatever consolidation software you choose needs to be easy to use and adopt. It should scale as your business grows. And as almost 500 companies told BPM Partners, they’re very aware of what separates the best financial consolidation solutions from the rest of the pack.
Finance teams have developed a healthy skepticism about whether vendors will deliver on their promises, and they know what they need in terms of features and functionality. Among the most common functional requirements were:
As a quick aside, if you’re looking for these and other features from a consolidation solution, you should watch some of our 3-minute demo videos. Now, back to more analysis of the BPM Partners survey:
This is probably a good time to point out that very few accounting teams are starting their IT journey from scratch. It’s almost certain you have an ERP and/or general ledger (GL) system in place to handle day-to-day transactions and standard financial statements.
Taking that a step further, the prospect of handling financial consolidation and close management in your GL/ERP has some obvious attractions:
No wonder “seamless ERP integration” was another key consolidation feature in the BPM survey. It would be nice, wouldn’t it?
Unfortunately, it might not be realistic. Here’s why:
These issues only become more challenging the more subsidiaries and investments you have to manage, or ERP systems your entities are using. As BPM’s Craig Schiff put it, “It’s very difficult for companies to do consolidation when you have multiple (ERP and GL) systems out there”
“It’s very difficult for companies to do consolidation when you have multiple (ERP and GL) systems out there” - Craig Schiff, BPM Partners
I’m certainly not the only one with this outlook. In fact, part of the value in BPM’s research is in how you can use it to benchmark yourself against your peers.
Survey respondents were asked where consolidation should take place, for example. More than half, or 53% said in a unified system with budgeting and planning.
My prediction is that we’ll continue to see more finance professionals in mid-market firms follow suit. And the best financial consolidation solutions will be built on a modern, integrated cloud platform.
It’s much like the choice between cloud and on-premise, though. You should be able to move off older systems at your own pace. As Schiff said, “it’s all about getting rid of these old systems that hold finance back - and getting to modern systems that empower finance.”
“[Finance transformation is] all about getting rid of these old systems that hold finance back - and getting to modern systems that empower finance.” - Craig Schiff, BPM Partners
The real challenge, of course, is finding the right platform. A platform developed by a vendor who will truly support you. The best consolidation software for your needs today, and tomorrow.
It’s okay if your progress in streamlining consolidation doesn’t align with everything you see in the BPM Partners report. What matters is what you do next.
The statistics in the study are complemented by BPM’s analysis of the growing number of players in this space. Instead of just looking at the deal size or investment amounts, in other words, there’s a detailed look at solutions.
Spoiler alert: Fluence looks great in the next few paragraphs.
BPM Partners’ assessment matters. It’s an independent research firm with expert analysts. They ask the tough questions they know customers would want to know. They realize they are accountable to the people who rely on their awards and ratings.
Fluence, I’m glad to say, not only passed muster with BPM Partners but received incredible validation. This included achieving the top rating for financial consolidation. We were the only vendor to get a perfect score.
This means, if you were to buttonhole BPM Partners in a hallway and ask their advice, they would tell you to work with us. Fluence’s recommendation rating was 100%.
It’s not just a matter of offering a product with the right features and functionality. Finding the best consolidation solution for you involves figuring out whom you can trust. You need a vendor who can strike the right balance between working quickly and standing behind you during difficulties.
You should feel confident telling your boss, “We won’t regret this.”
According to BPM, Fluence meets all these criteria, too. We were designated an outstanding vendor in terms of overall satisfaction, customer support and more.
BPM’s Craig Schiff described Fluence as:
“It’s consolidation-first, meaning that’s their focus area...I don’t know too many other vendors with that as their primary focus - particularly in the mid market,” he said. “Interestingly, they also provide migration tools for people still doing consolidation in legacy, on-premise solutions, to make it easy to move to the Fluence platform.”
“Fluence is really delivering on their promise of easy to use and robust consolidation for the mid market.” - Craig Schiff, BPM Partners
The original Gold Rush wasn’t really about precious metals. It was about the value people associated with it. Gold was the raw ingredient for jewelry, currency and more.
Similarly, the gold rush we’re experiencing in the financial close, consolidation and overall CPM space is not about vendors. It’s not about our products and services. It’s about the value that can be extracted from data and turned into business improvements. And most of all, it’s about being able to meet our customers’ needs.
As more organizations modernize their financial close software, the benefits will build up, including:
These are all great advantages from a bottom line perspective. They are also great from an employee engagement perspective.
Working with the best consolidation tools will help finance teams move away from their standard operating model. No more manual reconciliations. No more questionable numbers. Adapting with a few clicks when reporting requirements change.
Best of all, being able to manipulate data with ease makes it easier to develop quality insights. It also becomes easier to report them to the people in the organization who need to make tough decisions. Marrying timely, accurate actuals with modern, agile planning.
To take the next step, download the BPM Vendor Landscape report on Fluence, and then:
Last but not least, don’t hesitate to reach out to experts for guidance.
Those experts include BPM Partners, of course, but they also include our team here at Fluence. We want to help as many finance teams as possible enhance their close and consolidation processes, and indeed their overall business performance.
We believe we’ll make an impact that lasts. You could say it’s our own way of going for the gold.
Discover how Fluence can help your organization plan better and close faster with more confidence.