Compare leading business planning tools and software

Business planning, budgeting and forecasting are important elements of corporate management. They help to harmonize operational business with strategic goals.

In recent years, markets and competition have become more dynamic. Many organizations struggle to keep up. Business planning, forecasting and simulation are more important than ever. Decisions must be made based on current forecasts and data analysis. The efficient evaluation of possible future developments in scenarios and simulations, as well as the automation of processes and the reduction of the planner’s workload are also becoming increasingly important.

What is business planning and what do business planning tools do?

Business planning generally involves the forward-looking definition of operational, financial and strategic goals. It also determines the means and controls to achieve the goals. Business planning can be long-term, medium-term or short-term, and is divided into strategic planning, budgeting and forecasting.

• Strategic Planning: The definition of a company’s medium-term and long-term goals, which may be broken down into annual objectives.
• Budgeting: Preparation of the annual budget and profit planning (income statement, balance sheet and cash flow) based on integrated sub-plans (sales/turnover, production, resources, investments, etc.). Budgeting defines the company’s main objectives for a fiscal year.
• Forecasting: Short-term planning with ongoing review and adjustment to changing conditions. Typical forms are the rolling forecast or the year-end forecast.

In dynamic markets, up-to-date information and plans are essential. Modern software tools not only support this, but also provide the technological foundation for agile business planning and management. Many organizations see the right software support as a key lever for improving planning and forecasting.

A key software requirement for business planning is the rewriting of planning data into a planning data model in a central database. The planning model consists of planning structures (master data), metrics and planning logic, and brings together various operational and financial plans. Software solutions support the creation of the planning model and planning screens and allow the coordination of the various planning activities. They provide specific functionality for the execution of business planning and the collection of plan data.

What types of business planning solutions are available?

The software market offers a wide range of different business planning tools. Offerings fall into the following main categories:

• Financial planning: The focus is on planning and forecasting a company’s financial results (e.g., balance sheet, income statement, cash flow). This may include consolidating the financial plans of individual companies and subgroups, which requires group consolidation functions. In order to provide a comprehensive and meaningful view of a company’s financial situation, financial planning must take into account the interdependencies between the individual sub-plans.
• Operational planning and forecasting: The focus is on planning operational sub-plans such as sales, production, procurement, resources, costs and investments. Since it is not sufficient to plan these operational areas in isolation, they must be linked to the financial profit plans in the sense of integrated corporate planning. Advanced planning approaches, such as the full integration of business planning, the automation of forecasting using predictive algorithms and machine learning (ML) models, and simulations, are of great importance to many companies today.
• Strategic planning: Focuses on defining and planning an organization’s medium-term to long-term goals. These plans reflect an organization’s mission and vision and include the actions needed to achieve the goals. By breaking down the long-term goals into short-term, annual goals, an action plan can be derived with steps to achieve the strategic goals. In addition to positioning capabilities (e.g., SWOT analysis), these tools provide capabilities for defining strategies, setting KPIs, and monitoring and analyzing goal achievement.
• Simulation: Simulations and scenario analysis are essential for evaluating opportunities and alternative courses of action. Value-driver-based planning models are particularly well suited for simulations, as the impact of individual factors on the result can be shown quickly and transparently. The detailed comparison of different scenarios helps to assess the impact of changes and the resilience of the business. What-if simulations and parameter simulations are the most commonly used variants.

What are the typical features of business planning software?

The foundation of integrated business planning is a standardized database for actual and plan data and a consistent data model. Business planning software tools support the centralized storage of all data, creating a single point of truth for business planning and other performance management disciplines such as reporting, analysis and group consolidation.

On this basis, a planning model must flexibly depict integrated corporate planning. The goal is to dovetail strategic and operational planning with financial and profit planning. This includes the mapping of operational sub-plans (sales, production, procurement, resources, costs, investments, etc.) and their integration with each other and with profit planning (balance sheet, income statement, cash flow).

In addition to addressing various planning topics, leading solutions support the flexible mapping of different planning horizons to map strategic, mid-term to long-term planning and transfer it to traditional annual planning.

Business planning tools support different planning strategies, such as top-down or bottom-up planning. Top-down approaches are used primarily for strategic business planning and profit planning. Bottom-up approaches, on the other hand, are used in distributed environments where the goal is to collect planning data from many different locations in the enterprise. Top-down planning often focuses on parameter and structure simulation with scenario building, analysis or data splashing. For bottom-up planning, functions for the input of plan data via various clients (web, Excel, etc.) including validation of data entry and workflow mechanisms for process control are helpful.

How do business planning solutions add value?

Business planning solutions support the entire process, from setting up models and defining planning masks and workflows to executing and analyzing plans. Organizations most commonly achieve the following benefits and value with business planning tools:

• Improved quality of planning results
• Increased planning transparency
• More accurate and detailed planning
• Better integration of financial and operational planning
• Increased planning frequency and shorter planning cycles
• Reduced planning complexity
• Improved integration of strategic and operational planning

Why you should compare business planning software

Only software tools that meet a company’s planning needs can provide a high level of value. Therefore, it is important to compare several solutions when selecting software.

There are many products on the market, and finding the right solution can be time-consuming. It is therefore important to focus on your individual requirements. The basis for this is a careful analysis of functional, technical and organizational requirements, involving all key future users of the tool.

The step-by-step evaluation of potential business planning solutions should range from a long list of generally suitable tools to a shortlist of the most suitable tools, to a detailed evaluation of the solutions on the shortlist.

A formalized software selection process that compares multiple solutions is important and provides investment protection. A careful approach protects organizations from a wrong decision or even a failed project and lays the foundation for the best possible software support.

What to consider when comparing business planning tools

Especially during the detailed evaluation, it is important to examine the software solutions under consideration in detail and compare them with your own requirements. The detailed evaluation may include the implementation of a prototype to handle a sub-task of the overall task, based on (real) data provided, in order to evaluate all relevant requirements. Since cost and price/performance is usually an important evaluation criterion in selection processes, the initial and ongoing costs should also be calculated.

In general, organizations should consider the following criteria when selecting a business planning solution:

• Flexibility of applicability to different planning issues, strategies and approaches
• Planning support capabilities
• Ease of use for business users to model and set up planning (power users) and to execute planning
• Price/performance ratio
• Predefined interfaces and data integration capabilities from source systems (e.g. ERP)
• Impressive performance (data processing, load times, scalability)
• Support for related performance management disciplines (reporting, analysis, group consolidation, etc.)