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What we can learn from how planning software is actually selected

The Planning Survey 21 The Results document: Chapter 2
Selection method A formal competitive software selection process before purchasing is the best approach to choosing a software product and we highly recommend selecting products in this way. First and foremost, it is essential to evaluate in detail whether a product fits the technical and functional requirements of the company. Comparing different products in a detailed evaluation (e.g., a proof of concept) before purchasing also reduces the risk of choosing the wrong product. As Figure 1 shows, many companies are aware of the necessity of a competitive software selection process in order to select the right software product. 79 percent of respondents say their company conducted a formal product selection process before purchasing their planning software. However, laggards in particular somewhat underestimate the importance of such a process. As a consequence, the satisfaction level laggards experience with their providers and the software itself is a long way behind that of leaders. Laggards also face many more problems than leaders during implementation and when using their planning software. Figure 1: Did your organization conduct a formal product selection before acquiring your planning product? (n=823) Products evaluated According to respondents, of all the products covered in The Planning Survey 21, IBM Planning Analytics powered by TM1 was – like last year – the most evaluated product for acquisition, appearing in 21 percent of selection decisions (see Figure 2). This is hardly surprising considering that TM1 has been around since the early 1980s and IBM is well known worldwide for its BI, analytics and performance management software. The remaining top positions are mostly occupied by planning products with a global reach such as SAP BPC (19 percent), Board (17 percent), SAP Analytics Cloud (17 percent) and Jedox (17 percent). However, products from vendors with a strong profile in specific regions are also regularly considered for purchase in software selection processes. There are several other well-known products not covered in detail in The Planning Survey 21 that are evaluated for acquisition by companies. Note that Figure 2 only includes products that generated more than 30 responses in this year’s Planning Survey. Figure 2: Which of the following planning products did your organization evaluate for acquisition? (n=899) Depending on the size of a company, different products are evaluated in software selection processes. Whereas the likes of Corporate Planning, Jedox and Board are frequently evaluated by companies with less than 100 employees (see Figure 3) but also by mid-sized companies with 100 to 2,500 employees (see Figure 4), products from SAP, IBM and Anaplan are often evaluated by companies with more than 2,500 employees (see Figure 5). SAP, IBM, Jedox, Board and Anaplan have a global market presence and are evaluated by companies of all sizes. Figure 3: Top 10 evaluated products in selection processes – companies with less than 100 employees (n=105) Figure 4: Top 10 evaluated products in selection processes – companies with 100 to 2,500 employees (n=460) Figure 5: Top 10 evaluated products in selection processes – companies with more than 2,500 employees (n=322) When drilling Figure 1 down to product level, additional insight emerges into which products are chosen more often without a formal evaluation and which regularly come up in competitive situations (see Table 1). One reason for not conducting a formal evaluation might be that companies have pre-existing agreements with vendors to use their products throughout the whole enterprise. However, satisfaction levels are often quite poor and problems regularly occur when a formal evaluation is not carried out.   Competitive evaluationSingle product evaluation No formal evaluationevidanza96%4%0%OneStream95%5%0%IDL93%4%4%Serviceware Perf.93%7%0%Board91%5%5%IBM Plan. Analytics87%6%7%CoPlanner86%6%8%CCH Tagetik85%12%3%Unit4 FP&A82%11%7%Valsight81%14%5%Prophix81%15%4%Jedox80%13%7%Anaplan80%8%12%Workday Adapt. Plan.77%13%10%macs Software75%21%4%LucaNet70%19%11%Corporate Planning69%21%10%SAP Analytics Cloud68%9%24%Infor d/EPM64%12%24%SAP BPC57%21%21%Oracle EPM Cloud56%28%17%Table 1: Did your organization conduct a formal selection process before purchasing your product? By product (n=823) Reasons to buy ‘Flexibility of the software’ (51 percent) and ‘good coverage of planning specific requirements’ (50 percent) are the main reasons why companies buy their planning products. The third most popular reason – ‘good coverage of reporting/analysis requirements’ (42 percent) – shows that many companies are aware of the fact that there can be no proper planning without reporting and analysis capabilities. The integration of planning with reporting, analysis and dashboards is essential and therefore has to be considered in the software selection process. As with selection projects for most types of software, ‘price-performance ratio’ (33 percent) is another prominent consideration for companies when buying planning products. Offering flexible and feature-rich software at an attractive price point can be a very persuasive factor when trying to convince customers to buy. Figure 6 shows all the reasons why companies choose planning products in descending order of frequency. Vendor-related reasons such as ‘vendor or product reputation’ (16 percent), ‘size and financial stability of the vendor’ (9 percent), ‘good vendor relationship’ (8 percent) and ‘vendor listed as corporate standard’ (6 percent) seem to be of minor importance for many companies when selecting a planning product. Figure 6: Why was your product chosen? (n=867) Excel, a widely used product for planning, BI and analytics all over the world, is rarely evaluated in a formal software selection process but is usually chosen because it is available, and many users are already skilled at working with spreadsheets. ‘Availability of people skilled in the toolset’ (66 percent, see Figure 9) and ‘Price-performance ratio’ (58 percent) are prominent reasons why companies use Excel as their planning product because in most cases it is already installed so no additional licenses need to be purchased. However, the increase in manual effort and problems with various aspects of planning that come hand-in-hand with Excel usually lead to higher total costs in the end. Other prominent reasons for choosing Excel are ‘ease of use for planners’ (40 percent) and ‘flexibility of the software’ (35 percent). Figure 7: Why was your product chosen? Specialized planning products (n=867) vs. Excel (n=125) Compared to leaders, laggards do not carry out their software selection projects as thoroughly as they should. Figure 7 indicates that laggards seem to underestimate the need for a thorough software selection process, affording undue importance to criteria such as ‘good vendor relationship’, ‘vendor listed as corporate standard’ or other criteria. In BARC’s opinion, based on more than 20 years of guiding customers through software selection projects, a thorough requirements analysis – including the definition and prioritization of needs – is essential as the basis for every project. Thoroughly evaluating software products with due regard to these technical and functional requirements guarantees that the wrong product is not chosen. Of course, criteria such as ‘vendor listed as corporate standard’, ‘size and financial stability of the vendor’ and ‘international focus of the software’ have to be considered for simple financial and sustainability reasons. However, greater importance should always be attached to technical and functional requirements than to how much the product costs. When selecting a suitable software solution, always focus on your company’s requirements and how each solution is able to fulfill them. Figure 8: Why was your product chosen? Leaders vs. laggards (n=163) As it has been since 2017, ‘flexibility of the software’ remains the number one reason why companies choose to buy planning products. However, over time, priorities seem to evolve and reasons to buy change in importance. For example, functional considerations such as ‘good coverage of planning specific requirements’ and ‘good coverage of reporting/analysis requirements’ are more important to companies selecting planning products now than in the past. As with every software investment, ‘price-performance ratio’ plays an important role in purchasing decisions (see Figure 9). Figure 9: Why was your product chosen? Timeline 2016 (n=565), 2017 (n=1158), 2018 (n=808), 2019 (n=911), 2020 (n=904) and 2021 (n=867) Time needed As a rule of thumb, software selection projects (excluding the implementation phase) should not take longer than six months. Requirements can change quite quickly so the choice of product should be made within three to six months of beginning the requirements analysis. The general goal for completing the subsequent implementation project should be anything between three and twelve months, depending on company size, geographical distribution and the scope of the project. Figure 10 shows that 85 percent of companies implement the planning aspect of their product (from purchase to initial rollout) within twelve months. Figure 10: How long did it take to implement the planning aspect of the application from software purchase to initial rollout? (n=845) Sales experience A decent sales experience for the buyer is the foundation of a successful project with a valued partner. For the vendor, it is a matter of merely surviving or thriving. Overall, buyers confirm that the vendors whose products they ultimately selected supported them well during the purchase process. On average, only 2 percent state that their experience with a vendor was poor or very poor. Figure 11: How would you characterize the following aspects of the sales/purchasing experience with the vendor? (n=647)

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Dr. Christian Fuchs
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