The 2021 BARC Score Financial Performance Management

Today, many finance organizations face a variety of challenges. Chief among them is that holistic corporate management requires transparent and fast decisions. Integrated, functioning financial performance management (FPM) can support these requirements. With regard to the management and monitoring of financial results across the organization, FPM focuses on streamlining financial management processes.

Here, the use of modern technologies offers significant potential for improvement. Professional solutions target, support and improve existing processes, so customers can achieve better insights, speed and greater flexibility.

The FPM software market is highly competitive, so finding the right vendor and tool can be daunting. Our BARC Score concept was created with this in mind, aiming to help buyers find their way through this software jungle.

Our upcoming BARC Score examines the market for financial performance management (FPM) products and portfolios. Based on countless data points from various BARC surveys and many analyst interactions, vendors are rated on a variety of criteria, which range from portfolio capabilities and architecture to financials, product and sales strategy.

BARC Score FPM analyzes the strengths and challenges of all the leading vendors as well as many smaller vendors that often have less visibility, but equally, offer outstanding value to their customers.

The competitors: Vendors included in BARC Score FPM

There are two separate categories of inclusion criteria for this BARC Score: the first relates to a vendor’s products and portfolios and the other centers on the financial results of those products.

The product has to have a strong focus on providing FPM functionality. To confirm this focus, it must supply at least four out of these five technologies: financial planning, financial consolidation, operational planning and forecasting, and reporting and analysis. In terms of criteria weighting, capabilities for financial planning and financial consolidation are of particular relevance in this BARC Score.

Financial planning is a key element in finance control and supports financial management. Besides maximizing profits and increasing shareholder value, one of the most important objectives of financial planning, budgeting and forecasting is to ensure a company’s liquidity. Therefore, financial plans have to focus on planning the financial results of an organization (e.g., balance sheet, income statement, cash flow), which may also include a consolidation of the financial plans of individual companies and subgroups if regarded at a group level.

For this reason, functionality for financial consolidation is often required in financial planning as well, and not only for preparing consolidated financial statements of actuals.

To prove organizational robustness and maturity, vendors have to generate a minimum of €20 million in software revenue per year with the evaluated product. The origin of the revenue must spread across specific regions. This year, we are publishing two versions of BARC Score FPM – a global version and a version focusing specifically on the DACH region (Germany, Austria and Switzerland). Vendors must have a significant number of implementations and license or subscription revenues in the focused regions.

The vendors that met our inclusion criteria in this year’s BARC Score FPM are:

Strong competition among the ‘Challengers’

Now for the main attraction: the upcoming BARC Score FPM. The FPM market has reached a high level of performance and is characterized equally by software generalists and specialists in the digitalization of finance-oriented management processes. Most vendors are positioned in the ‘Challengers’ segment. Vendors in this segment are often corporate performance management specialists that also focus on financial performance management.

They are, broadly speaking, characterized by the pursuit of an expansion strategy and focus on completing their portfolios (e.g., through integrating modules for financial consolidation). This expansion strategy manifests itself either through acquisitions or through innovative, perhaps even disruptive technologies, ideas or business models.

In comparison, four of the vendors have established themselves as ‘Market Leaders’. The strongest distinction between these categories lies perhaps in their robustness. ‘Market Leaders’ have combined their technology with strong market adoption and strong account management. In other words, the pairing of powerful technology, comprehensive portfolios and a strong FPM focus and sales strategy earns them market success. While this is a very high-level overview of the development of the market, the analysis and BARC Score report go far deeper into details and individual vendor portfolios.

Final recommendations and next steps

The full BARC Score FPM will be released on March 29^th, 2021. The detailed report with all vendor and product assessments including strengths and challenges can help you to assess and classify the software market for your individual project. If you are currently selecting FPM software for your company, we recommend considering our new BARC Score FPM.