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10 things to consider when choosing a software solution that combines budgeting, costing and financial dashboards

Stéphane Gaouette
Stéphane Gaouette, CPA, CA, CA•TI
President of DECIMAL

When you need to improve or optimize your management solutions – specifically, your budgeting, costing, or financial dashboard processes – there are several factors to keep in mind.

It’s the same thing when opting for a Corporate Performance Management (CPM) software solution that provides these three functions. However, deciding which CPM system to choose also means taking a closer look at several additional factors.

Unlike many other corporate software systems, CPM systems affect Finance first and foremost. While it is true that decisions involving budgets, costing, and financial dashboards are now more deployed within the organization, in most of them they remain under the ultimate control of the Finance department. Further, most organizations are not selecting and installing this type of software to replace an existing system; rather, they are doing so to automate processes that are still being performed manually, supported by nothing more than a multitude of Excel spreadsheets!


Read on to learn about 10 points an organization should consider before deciding which tools are best suited to its needs.

  1. Autonomy of Finance departments and IT support

  2. In many organizations, information technology (IT) resources are allocated (and rightly so) to operations rather than Finance. This is why many Finance departments have developed so many Excel-based tools.


    Given that Finance has always enjoyed a certain independence in this respect, it neither wants nor can afford to be at the mercy of IT resources in order to tweak budget scenarios, update reports or make sweeping changes to organizational structure.


    However, Finance teams in other organizations are able to rely on a super user (Pilot) and even experienced programmers when required. Having this expertise and these resources at their disposal means they can use more complex software.

    The presence or absence of this type of support can significantly influence the type of software chosen or, at the least, exclude some of them from consideration. In fact, many software currently available represent more a development platform. These extremely flexible software options require a dedicated person, if not an entire team, to modify data entry screens, perform complex calculations or generate customized reports. These systems enable you to do almost anything … as long as your organization has the necessary expertise and resources.


    Other software products rely more on the resources of the Finance department itself, and although a little more rigid, they do liberate the Finance team from reliance on ongoing IT support and give it the freedom to use the software product as it wishes. Finance is thus able to tailor the data that will be displayed (or not) and develop their own reports, independent of IT support.

  3. Integrated system vs. Numerous software tools

  4. Another issue is whether or not to integrate budgeting, consolidation, costing, business intelligence systems, and so on.


    The Corporate Performance management (CPM) systems market is still somewhat fragmented, with many solutions supporting only one or, at best, a number of processes.


    It is therefore crucial to accurately assess the organization’s requirements and make sure the software selected meets both its short and long term needs. For example, the acquisition of a software with features to improve only the budgeting process could be inappropriate if other needs, such as gap analysis (actual vs. budget) were needed later. In this situation, software that integrates budgeting and costing functions would be a more appropriate choice. It may well prevent the organization from having to purchase another solution or redo some of its work.


    A good requirements analysis thus remains key in this regard.

  5. Enterprise Resource Planning (ERP) vs. Best of Breed (BoB)

  6. In my opinion, this issue is somewhat theoretical. However, since I am often asked why an organization should not look to its ERP software to provide it with CPM features, I will endeavour to answer that now.


    As a matter of fact, many people first look to their ERP provider when they consider acquiring a CPM system and quickly realize that these same ERP providers offer BoB-type budgeting solutions. It is rare that even the largest software providers (SAP, Oracle, etc.) are able to seamlessly integrate CPM systems into the rest of their ERP package. This is to be expected, as ERP systems are designed to bring rigor in organizations, whereas, in the budgeting process, it is not strictness that counts but flexibility, in order to create different scenarios.


    In 2015, connectivity issues are a thing of the past: all software, whether ERP or BoB, boasts of its software’s infinite connectivity options. Rather than focussing on this, the assurance that the software can meet your needs should be the determining factor in your choice. In order to ascertain this, you need to meet with many suppliers and not only your ERP vendor.

  7. Centralization vs. Decentralization

  8. Although internationally recognized software products generally support both centralized and decentralized processes, this is nevertheless a relevant issue, as there are still software products on the market that do not adequately support this function.


    It is also important to understand the flexibility of potential solutions. If Finance finds the tool too inflexible and cannot properly control the rollout, it is likely to be uncomfortable with decentralization and will want to maintain control.

  9. Security

  10. Like ERP software, CPM systems require special attention when it comes to security. When preparing budgets or producing management reports, deciding what information will be visible to users entering data is crucial, as is the ability to configure information accessible in reports.


    Security management is particularly important to organizations where many users have input to the budgeting process. Accordingly, security management by "roles" becomes an important factor.

  11. Cloud computing vs. Internal infrastructure

  12. While a significant number of organizations continue to install their own software internally, many providers are now offering cloud computing solutions. In fact, some of them only offer this delivery method. Cloud computing provides a three-fold advantage: the organization no longer needs to worry about acquiring and managing a somewhat complex infrastructure (often with limited IT resources); this method often provides Finance users with superior service (faster support response times, for example) and at a much lower cost. However, organizations that choose this method should carefully review the contract clauses applicable to service levels and any planned rate increases.


    Those that continue to install internally often do so because of data security concerns. Even today, many organizations are wary of allowing their data to go outside their walls. However, I assure you that, if you do some research, you’ll be surprised to learn just how many organizations are adopting cloud computing and how safe this model can be – given the right provider. Sometimes, your data is safer in the cloud than it is inside your office walls!

  13. Implementation team

  14. For most IT implementation projects, the team (both internal and external) is often the key to success. In this case, we must remember that Finance managers will be the main users. It is therefore important that these people be able to free up the resources to participate in the implementation, and that the software provider’s team have the following capabilities:

    • Have an excellent grasp of budgeting, costing and financial dashboards; the team should be either trained CPAs or people with relevant experience;
    • Be locally based so it can be available throughout the implementation process and, especially, in order to provide long-term support;
    • Possess strong software knowledge so the organization can get the maximum benefit from its investment.

  15. Local support

  16. Local expertise is important in any software implementation project. This is equally true when implementing a CPM system. All too often, I have seen organizations deal with providers who do not offer many resources at the local level and who quickly came to miss that lack of availability.


    In Quebec, it is important to have French-speaking personnel with both functional and technical expertise. Having written materials – training and user manuals, support – in the right language is also crucial.

  17. Industry standard

  18. Equally if not more important, in my opinion, is the provider’s focus, both in terms of software range and its clients’ line of business.


    Unfortunately, many companies producing ERP or financial transaction management software claim to possess a budgeting module without having mobilized the necessary resources or experience to ensure their solution is capable of performing all the various processes their clients require.


    Moreover, adequately supporting different industries requires expertise that can only be acquired with years of experience. Since budgets are at the heart of an organization’s business strategy, it is important to understand the context in which it operates, in order to tailor the processes to its specific needs.


    It is important that clients ask their providers to provide solid references, both in terms of their chosen software’s functions as well as the provider’s experience in their line of business.

  19. General selection criteria (applicable to all computer systems)

  20. The preceding points address a number of relevant issues. However, bear in mind that choosing a CPM system remains in many ways similar to choosing any other computer system. In other words, it must be based on sound needs analysis, a detailed list of required features and a comprehensive review of available solutions.


    Important points:

    • Acquire the support of upper management
    • Conduct a sound needs analysis and draw up a detailed list of required features
    • Don't forget off-site users
    • Assess the technical “fit”
    • Evaluate the various options
    • Figure out the total cost of ownership (TCO)
    • Get industry-specific referrals
    • Think before you customize
    • Pick a project leader and provide him/her with good support staff
    • Develop a realistic plan; allow the necessary time and resources for the project to succeed

After many years of using ERP and CRM software, organizations are increasingly opting for CPM systems. But, as with the first two, there is still a chance that organizations will make poor choices. A rigorous, needs-based software selection process will undoubtedly improve the outcome for any organization that chooses these systems.