ISG Research is happy to share insights gleaned from our latest Buyers Guide, an assessment of how well software providers’ offerings meet buyers’ requirements. The Business Planning: ISG Research Buyers Guide is the distillation of a year of market and product research by ISG Research.
The primary goal of business planning is to ensure decision-making is consistently more informed and faster. Planning and budgeting software should expedite and refine analysis
ISG Software Research has long advocated for dedicated applications to enhance the value of corporate planning and budgeting. This vision promotes individualized business unit planning while integrating those plans into a
Many enterprises engage in both formal and informal planning, often within silos. Budgeting involves setting financial constraints, whereas planning pursues opportunities and outlines paths for success. Both are essential, but successful enterprises recognize that business planning within the constraints of financial goals provides consistently better results than budgeting on its own.
Inertia, vested interests and perceived risks can hinder enterprises from evolving their budgeting processes, which often leads to inefficiencies. Effective planning should foster structured dialogues between executives and managers around clear objectives rather than vague financial estimates.
Transforming business and a finance department into a strategic asset relies on technology that enhances visibility and decision-making capabilities as the focus shifts towards understanding future opportunities rather than solely reflecting on past outcomes. Strategic finance organizations can provide actionable, data-driven insights to optimize performance. Ultimately, effective planning software bolsters organizational agility and enhances the value of planning and budgeting across all departments.
ISG Software Research (as Ventana Research) coined the term Integrated Business Planning (IBP) in 2007 to describe a rapid, collaborative, high-participation process that brings together operational and financial planning using a software platform to connect the disparate planning activities that happen in an enterprise. With IBP, each business unit plans individually, but in a coordinated manner that achieves better alignment with overall strategy and objectives, as well as improved execution of the plan. ISG Software Research asserts that by 2027, one-fourth of FP&A organizations will implement this form of integrated business planning, bringing together operational and financial planning on a single platform to improve the business value of planning and budgeting. The implementation of IBP became feasible once the necessary technology underpinnings to make it practical and affordable were developed.
Planning is a collaborative process between executives, managers and employees, a structured dialog about the tactics and resources needed to achieve those objectives. It is structured in the sense that the objectives and resources are quantified. The answer to the question, “What are your objectives for next year?” should not be, “Volume and revenue will be up.” Instead, it should be, “Volume will be up by 11% and revenue will grow by 9%.” A well-managed planning process sets measurable objectives and quantifies the operational and financial resources required to achieve them. Setting those objectives also makes it possible to measure performance to those objectives.
There are several advantages to IBP. One is that an integrated approach supports a high participation, collaborative, action-oriented style of planning and budgeting built on frequent, short planning sprints. This promotes more accurate plans because refinements are made at shorter intervals. Short planning cycles enable companies to achieve greater agility in responding to market or competitive changes. An ongoing, collaborative dialogue about achieving objectives brings together finance, line-of-business managers and executives to promote better ongoing alignment and buy-in.
Companies engage in a significant amount of planning—both formal and informal. Workers plan for sales and how to produce products and deliver services. They plan for the headcount needed and how to organize distribution and their supply chain. They also produce a budget, which is essentially a financial plan. When business managers are tasked with preparing a budget, they first create a business plan, often informally, and then translate that plan into financial terms.
A formalized process for financial planning became the norm in business when large industrial concerns developed in the 19th century. Enterprises needed to impose formal fiscal controls on their far-flung operations, so they adopted the budgeting model used by the only institutions of similar size and scope—governments. Given the command-and-control management structures of that era’s organizations, the relatively slow pace of change in business and the limited communications and calculating capabilities, this model was the only feasible option for corporate planning.
Financial planning served as the original central business planning tool due to the need to maintain financial controls and because numbers are fungible, making it the easiest way to construct a consolidated plan of action for an enterprise. The available technology dictated the scope and speed of the process. Budgets were commonly assembled using a stack of paper spreadsheets and adding machines because these tools were readily available and easy to use. When electronic spreadsheets gained wide adoption in the 1980s, they naturally became the preferred method for assembling budgets. Desktop spreadsheets offered a means of automating many budgeting tasks, such as adding columns of numbers, performing analyses and consolidating multiple budgets. However, they have three major drawbacks: they are prone to errors, often become overly complex and inflexible, and addressing these issues takes time, which limits organizational agility.
Electronic spreadsheets are suitable for financial planning because accounting can be managed in two-dimensional grids. However, while accountants and financial planners typically work within two dimensions, businesses operate in numerous dimensions. Examples include products, customers, organizational structure, location, time and currency. Each dimension is complex in itself. Products, for example, form a hierarchy that extends from general product families down to individual stock-keeping units (SKUs).
The ability to apply a multidimensional structure to business models for planning and budgeting makes it easier to collect, analyze and report information. Working with dimensions allows planners to quickly make assumption changes and apply them globally to the model. Because the impact or a set can be calculated immediately, different scenarios can be explored interactively during a meeting, rather than having to wait hours or days for spreadsheet-based analysis. Additionally, a company can save each version of the complete plan and compare them side-by-side from any perspective or level of detail.
Working within a multidimensional data structure saves time at every step of the forecasting, planning, budgeting, analysis and review cycle. It significantly reduces the chance of inadvertent errors common in spreadsheets. While pivot tables in spreadsheets make it possible to work with three dimensions simultaneously and can be coaxed into handling four or even five by a highly skilled analyst, using a multidimensional database structure generally takes much less time, especially in analysis and reporting. The time saved can be significant, allowing organizations to perform more useful and impactful work.
Another important development of business planning platforms over the past decade has been the evolution of the data store, which is an essential component. Technology for managing data flows to and from source systems, including ERP, customer relationship management and supply chain management, has evolved rapidly. Application programming interfaces (APIs) make it possible to automate data extraction, transformation and loading from multiple sources onto the planning platform, ensuring accurate, timely and consistent data is accessible to all participants in the planning process. This automation significantly reduces the time analysts spend on manual data preparation.
Over the past 25 years, software providers have increasingly adopted the structure and language of IBP, even though different terms may be used. These systems have become much easier to use and far more capable than those available in 2007. All now incorporate artificial intelligence (AI) and generative AI (GenAI) technologies to streamline and accelerate planning cycles, make planning more accurate and agile and transform budgeting from what started as a strictly administrative burden into a valuable business tool for executives and managers.
The ISG Buyers Guide™ for Business Planning evaluates products based on their support for IBP, a high-participation process that integrates individual business unit or departmental plans in the context or corporate strategy and financial objectives. This enables enterprises to plan, budget, report and analyze faster and more accurately, bringing together executives, managers, analysts and administration, while offering AI and reporting capabilities. The software must be capable of accessing data from a variety of sources, modeling the data for analysis, analyzing the data using a variety of techniques, communicating the results in a variety of ways and supporting the data and analytics processes.
This research evaluates the following software providers that offer products that address key elements of business planning as we define it: Anaplan, Board, IBM, Jedox, OneStream, Oracle, Pigment, Planful, Prophix, SAP, Vena Solutions, Wolters Kluwer and Workday.
This research-based index evaluates the full business and information technology value of business planning software offerings. We encourage you to learn more about our Buyers Guide and its effectiveness as a provider selection and RFI/RFP tool.
We urge organizations to do a thorough job of evaluating business planning offerings in this Buyers Guide as both the results of our in-depth analysis of these software providers and as an evaluation methodology. The Buyers Guide can be used to evaluate existing suppliers, plus provides evaluation criteria for new projects. Using it can shorten the cycle time for an RFP and the definition of an RFI.
The Buyers Guide for Business Planning in 2024 finds OneStream first on the list, followed by Oracle and Anaplan.
Software providers that rated in the top three of any category ﹘ including the product and customer experience dimensions ﹘ earn the designation of Leader.
The Leaders in Product Experience are:
The Leaders in Customer Experience are:
The Leaders across any of the seven categories are:
The overall performance chart provides a visual representation of how providers rate across product and customer experience. Software providers with products scoring higher in a weighted rating of the five product experience categories place farther to the right. The combination of ratings for the two customer experience categories determines their placement on the vertical axis. As a result, providers that place closer to the upper-right are “exemplary” and rated higher than those closer to the lower-left and identified as providers of “merit.” Software providers that excelled at customer experience over product experience have an “assurance” rating, and those excelling instead in product experience have an “innovative” rating.
Note that close provider scores should not be taken to imply that the packages evaluated are functionally identical or equally well-suited for use by every enterprise or process. Although there is a high degree of commonality in how organizations handle business planning, there are many idiosyncrasies and differences that can make one provider’s offering a better fit than another.
ISG Research has made every effort to encompass in this Buyers Guide the overall product and customer experience from our business planning blueprint, which we believe reflects what a well-crafted RFP should contain. Even so, there may be additional areas that affect which software provider and products best fit an enterprise’s particular requirements. Therefore, while this research is complete as it stands, utilizing it in your own organizational context is critical to ensure that products deliver the highest level of support for your projects.
You can find more details on our community as well as on our expertise in the research for this Buyers Guide.