What's the most common forecasting and budgeting tool? Undoubtably Excel. Whilst it is a powerful and useful tool, that will inevitably be loaded on every "contributor's" PC, forecasting is probably the main example of Excel Hell.
Whilst I was in industry, newly qualified, I was compiling the annual budget and managed to miss out two employees from the SUM function for their department's salary expense. Their annual salary was more than half the total company contingency. I had to explain this to the Board and the departmental manager in every month's management accounts commentary, until I managed to get agreement to formally use the contingency for the purpose. Ouch, that was painful!
Excel can also be a right pain as soon as multiple people are involved, as Excel is not designed as a multi-user system. It's very easy to get versions confused, and miss some of the changes.
I've also seen massive integrated spreadsheets, some handling over 300 cost centres. The users said it was held together by "sticky tape".
Yet as forecasting is essential in every business - especially for cash flow, and to achieve corporate plans - Excel is often the only apparent solution. Or is there something better?
There is a big gap between expensive corporate forecasting systems (such as Hyperion and Cognos Planning , formerly Adaytum), and Excel.
There have many attempts to fill the gap, but commercially it's a difficult proposition. For example, Inca Planning (formerly Dillon) nearly disappeared in 2009, only to be bought by COA Solutions and re-branded "ClearView Planner".
Confusing as a London company similarly called Clear Plan (SAAS) Limited is marketing the US-based cloud solution Adaptive Planning into Europe. Adaptive Planning comes in various flavours, including a free starter edition, and for its sins is the planning component of Netsuite.
Otherwise TM1 is probably the best known mid-market solution. But as part of the IBM Cognos stable, it's difficult to know how it will progress. I was sorely embarrassed for the TM1 specialist who was giving a demo at Cognos's offices, when the Cognos Planning representative came in and effectively rubbished TM1. I'd like to have heard what was said afterwards! Interestingly Inca, the company that sold off Inca Planning, is now selling TM1 alongside their traditional role with Cognos Planning (Inca started as a spin off from the sales team of Adaytum, with Adaytum's consulting team becoming Budgeting Solutions).
Another cloud solution worth considering for larger businesses is Rocket's CorVu CorPlanning. This allows multi-user development of integrated P&L, balance sheet and cash flow statements, with the most sophisticated logic when you need it. Sadly the entry price is not for the faint-hearted.
When Microsoft canned the forecasting component of PerformancePoint in early 2009, as part of the migration of its reporting functionality into SharePoint, one of the executives founded XLPlanning. The product is browser-based, and available hosted in the cloud or on-premise. Simpler than CorPlanning, it is priced for businesses with revenues of £10-100m.
There are various other cloud and on-premise forecasting systems, stand-alone or as a module of a broader financial system. If you are a vendor or user of a sytem you'd like to tell us about, especially for start-ups and businesses in the £5-£500m range, please comment with a suitable link.
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