Market Perspectives

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 Financial Planning: ISG Research Buyers Guide is the distillation of a year of market and product research by ISG Research.

Financial planning software aims to refine and expedite the budgeting process, boosting the productivity of the financial planning and analysis (FP&A) group, while also enabling executives to set objectives and allocate resources in alignment with an enterprise’s strategy. However, budget setting has long been criticized for being time-consuming and offering little business value. Some of this is inevitable, as it involves navigating internal politics and balancing various competing interests.

Enterprises typically engage in both formal and informal planning, often within silos, making it difficult for executives to ensure that resources are used consistently and in line with broader strategic aims. The effectiveness of this process largely depends on the tools employed, which determine its capabilities and limitations. Inertia, vested interests and perceived risks can hinder an enterprise from evolving their budgeting process to make it a more useful and effective business tool. ISG Research asserts that by 2027, just 1 in 4 FP&A organizations will have redefined their mission to make planning easier for business unit leaders. Those that do will be a strategic asset.

ISG Software Research has long advocated for the use of technology to make budgeting and financial planning a more rapid, collaborative, high-participation process. Technology defines the constraints within which businesses operate, dictating the scope and speed of their processes. Using the right technology can enhance productivity by reducing the hours spent on the mechanics of budgeting while enabling FP&A organizations to deliver deeper and more timely insights into an enterprise’s performance. Improving staff productivity is crucial as it enhances visibility and decision-making capabilities. The focus shifts toward understanding future opportunities rather than solely reflecting on past outcomes. Strategic finance organizations can provide actionable, data-driven insights to optimize performance. Ultimately, effective financial planning software bolsters organizational agility and enhances the value of planning and budgeting across all departments.

For decades, 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 offer 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 take time, which limits organizational agility.

Dedicated budgeting applications address all of the core challenges enterprises face with spreadsheets. Most offer the best of both worlds by allowing users to work in a familiar Excel or grid interface, while also providing a real database for data storage, analysis and reporting. These applications come with essential administrative functions that speed up processes by eliminating lags in hand-offs and reducing supervisory workloads.

An important evolution of financial planning platforms over the past decade has been the design of their data stores. 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, accelerates analytical processes and forms the foundation for self-service reporting. These on-platform data stores are also essential for supporting AI and generative AI (GenAI), as they provide the necessary resident data to efficiently train AI models on a sustained basis.

As enterprises and institutions rush to adopt AI and GenAI, a good deal of attention has been paid to potential unforeseen and unforecastable adverse outcomes. However, one very likely positive impact of AI investments in business computing is the near-effortless availability of consistently reliable data for any task at hand. This is driven by the need for large, relevant data sets to make AI effective, as well as the technological advancements over the past decade that have made this possible.

There have been similar positive outcomes during past disruptive cycles in business computing. For example, the widespread adoption of ERP systems led to an almost unintended flattening of corporate hierarchies because layers of middle managers were no longer necessary. Similarly, data management technology is on the verge of transforming the role of business analysts across enterprises. In particular, within FP&A groups, the shift will move work away from low-value data preparation tasks and toward what analysts are trained to do: analysis. Putting the “A” back in FP&A is now a practical reality.

In many enterprises, FP&A professionals have less time for analysis because the mechanical process of pulling together and collating data takes up so much time that very little remains for using data to spot trends, find opportunities and isolate issues to create better informed forecasts, plans and decisions. Our Analytics and Data Benchmark Research found that two-thirds of analysts spend a considerable amount of time on data preparation and reviewing data for quality and consistency issues, which is a major drag on the productivity of a key resource.

In many organizations, FP&A professionals have less time for analysis because the mechanical process of pulling together and collating data takes up so much time that very little remains for using data to spot trends, find opportunities and isolate issues to create better informed forecasts, plans and decisions. Our Analytics and Data Benchmark Research found that two-thirds of analysts spend a considerable amount of time on data preparation and reviewing data for quality and consistency issues, leaving less time to do what they’re paid to do: analyze. 

Fortunately, this is about to change. As noted, financial planning software providers are already incorporating data stores into their applications and platforms, optimized for their specific users and use cases. Unlike general-purpose data stores such as data warehouses, everything a user needs is readily available and easily accessible on the platform, with metadata labels that are immediately recognized and understood. By substantially reducing the time required for data preparation and data quality control, financial and business analysts have more time to focus on analytical work. Automating data collection ensures reports and dashboards can be timelier. Additionally, by broadening the set and scope of readily available data—including external data—the FP&A group can provide more incisive perspectives and insights, enabling executives and managers to make better-informed decisions sooner.

AI and GenAI, along with natural language processing and agentic devices, are making deeper and interactive self-service reporting widely available, and periodic and ad hoc reports are becoming inherently interactive. As a result, through the remainder of the decade, analysts will spend less time on busy work, while executives and managers will have more effective tools that provide insights and guidance on how to navigate the future, rather than simply illustrating past events.

The expanding capabilities and significantly reduced data issues provided by FP&A tools form the foundation for building a more predictive finance department. Instead of merely orchestrating the company-wide budget, periodic analyses and reforecasts, FP&A should recast itself in an advisory role to support the entire enterprise. To facilitate the financial planning process, encourage high participation and shorten budgeting cycles, FP&A must design and implement streamlined processes that reduce the time required to create and update plans and budgets, while fostering a structured dialog.

Predictive AI has become a standard feature of dedicated budgeting software, making it possible to improve the accuracy of forecasts and enhancing agility in responding to change. ISG Research asserts that by 2027, almost all providers of software designed for finance organizations will have incorporated some AI capabilities to reduce workloads and improve performance. AI continuously monitors model accuracy and relevance, signaling when retraining is necessary as conditions evolve. With machine learning, systems can constantly monitor inputs and results to identify anomalies, inconsistencies, outliers, errors and omissions in data entry without specific programming. A well-trained AI-enabled system can suggest the next best step, options for the next step or a range of values to input that best fit the circumstances.

The ultimate objective of these actions is to use technology to create a financial planning process that supports rapid cycles built around short forecasting and planning sprints. Technology facilitates a rapid, high-participation process, improving both accuracy and accountability. Additionally, technology allows for multi-dimensional modeling to support driver-based planning, which enables managers and executives to connect resources to results and achieve their objectives.

Technology alone will not improve an enterprise’s budgeting process or the accuracy of forecasts and budgets. However, without a dedicated budgeting and financial planning application, enterprises will find it extremely difficult to maximize the business value derived from the considerable time spent on planning, budgeting, analyzing and reporting their financial outlook and condition.

The ISG Buyers Guide™ for Financial Planning evaluates products based on how well the software facilitates enterprise budgeting and financial planning, including budgeting, pro-forma financial statement forecasts, capital spending, cash flow, corporate finance and capital, strategic and long-range planning, process administration and how it utilizes AI using machine learning. In addition, the guide assesses support for executives, participants, analysts and planners.

This research evaluates the following software providers that offer products that address key elements of financial planning as we define it: Anaplan, Board, IBM, Infor, insightsoftware, 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 financial 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 financial 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 Financial 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:

• OneStream.
• Oracle.
• Anaplan.

The Leaders in Customer Experience are:

• Anaplan.
• OneStream.
• Board.

The Leaders across any of the seven categories are:

• OneStream, which has achieved this rating in six of the seven categories.
• Anaplan and Oracle in five categories.
• IBM and SAP in two categories.
• Board in one category.
  
  

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 financial 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 financial 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.