Budgeting and Forecasting Software Comparison

Selecting a Budgeting and Forecasting solution should include a comparison of products to ensure that the software meets company needs.  This article will discuss a handful of budgeting solutions to help consumers understand how to secure a return on investment.

Budgeting and forecasting within any company entails more than one person bringing data and research to the table to project what the next (or the rest of the) fiscal year will bring, in terms of revenue and expenses, and sometimes for balance sheet items and cash flow.  There are several options for budgeting and forecasting for an organization – whether it is homegrown, a feature within an already-employed software, or independent software solutions.  This blog article will go about comparing budgeting software in an effort to understand the options better.

Figuring out what works best to meet company budgeting and forecasting needs can be a labyrinth process, and it already feels like there are not enough hours in the day without demos, training, and sales meetings for new software.  It is important to have a head start to get an infrastructure of understanding regarding options for this important process – and the solutions on the market, as well as their features and functions.

First of all, it is important to note valuable and relevant features for today’s budget managers.  Arguably the most important feature is the ease of use.  Budgeting is not a process that most professionals get excited to tackle, so the process should be painless in regard to how business user friendly the method or solution is for the manager.  More specifically, budgeting should employ accounting and business logic, allow for budget template reuse, and be streamlined in nature.  Streamlining the budgeting process is especially important in the context of how many people are involved.

There may be one person putting together the budget – or there might be a team, but either way, budgeting and forecasting requires data from more than one moving part.  Collaboration, therefore, becomes another important functionality.  Collaborating on a budget can mean long, back-and-forth e-mail threads with spreadsheet attachments, and the responsibility lands on the budget manager to link all of this data into one overall budget, but it doesn’t have to.  There are options to contribute to a company-wide budget without the hassle and lack of security associated with a long e-mail thread or dealing with manual spreadsheet files on a network file server.  And with collaboration, the concern of security adds to the list of features to seek in a budgeting process.

Budgeting usually entails comparing actuals versus projections, often at an employee salary level, which is sensitive material – meaning security is a must.  Furthermore, when department heads contribute to a budget, they do not necessarily need to see how much another department gets per fiscal year.  Therefore, the capability to get in and contribute to a budget without the data getting to anyone but the designated budget contributor is likely a priority for most companies.  Additionally, the pressure of budgeting for an organization of any size can be alleviated if security in a budget program empowers CFOs or budget managers to invite their department heads to contribute to the process – allowing managers to maintain a budget they created for their department.  It is these three primary features that this article will use as a framework to compare the following budgeting solutions: homegrown Excel budgeting, Microsoft Forecaster, Cognos, Hyperion, and Solver’s BI360.

The global finance team community’s favorite spreadsheet software, Microsoft Excel, can be used to budget for a company.  In fact, close to 90% of all companies are still working with regular, homegrown Excel Budget models.  It is easy to use in terms of its ubiquity and related familiarity.  However, these models have no database or the user security that empowers a more streamlined process, function on static input templates, and lots of potential issues when it comes to linking spreadsheets to consolidate the budget.  Microsoft does offer a step up, with Forecaster.

Microsoft Forecaster is similarly popular, as more than 2,000 companies are using it to budget.  However, these companies will be starting to looking for alternatives as Forecaster is at the end of the product life cycle, and it is in maintenance mode, as far as development goes.  However, it is important to note that Forecaster has a proprietary user interface and does not work within Excel, meaning a different and limited set of formulas and functions.  In terms of ease of use, the costs of training and learning curves for personnel come into play for this Microsoft offering.  Additionally, the capabilities within this product are relatively limited in comparison to some of the other software vendor offerings.

Cognos is an IBM product, and Hyperion is an Oracle solution.  They are both tools from the early 1990’s – still around and frequently used in the upper end of the market where IBM and Oracle have strong followings.  They are powerful products, being that they are very mature tools.  For the same reason, they are also quite complex in nature, and although they offer some Excel add-in and web front end functionality for companies that are highly distributed and/or aren’t interested in Excel software, their usability relies on learning proprietary formulas and functions, including proprietary OLAP cubes (TM1 AND Essbase) for data storage, rules, and aggregations.  More than twenty years of development could be the cause, but they both are part of full Business Intelligence (BI) suites.

In terms of ease of use, a full BI suite means that should a company opt to add another tool to aid in analytics and enterprise decision-making, there is one product line, one support team, one group of consultants, and one user interface to learn, since suites are integrated.  However, with Cognos and Hyperion, these suites can get pricey and don’t have the most seamless of integrations.  From module to module, there are different business logic capabilities and sometimes, different security because some tools have been acquired from different vendors over time, then stitched together by IBM and Oracle to offer a full BI suite.

Solver’s BI360 is also a full BI suite, and it is also an Excel add-in, meaning that this budgeting solution simply enhances Excel.  More specifically, users can create reusable and secure templates that are built for collaboration on budgets without ever getting out of trusty Excel.  The only learning required revolves around the accelerated features that make budgeting that much easier.  BI360 is five years old, and equipped with functionalities, including a web front end release slated for this summer, that are direct responses to modern consumer requests regarding ease of use, streamlined collaboration and security.  Furthermore, it is priced for the mid-market, which is another important piece of the pie, but big enough of a topic for its own blog entry.

Further on in the budgeting solution selection process, there might be more to consider, but the important aspects to consider when initially weighing options are user friendliness, the ability to simplify the process through teamwork and ownership, and security of sensitive data.  Solver would be happy to answer questions and generally review BI360’s easy-to-use Planning solution for collaborative, streamlined decision-making capabilities.

 

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