Imagine this: you sit down at the table with the CFO. It doesn’t happen that often, but now you were there for the wrong reason. This was a meeting where you would rather not be found. The Performance Management package that was purchased with much fanfare six months ago turns out to be a bad bargain. The chances are that you have fallen into one of the EPM Tool Selection pitfalls. Now what?
Tool Selection: the 5 key pitfalls to steer clear of
Pitfalls in selecting EPM software
Despite the shiny demos, the solution does not seem to be able to do what it should minimally. The vendor appears to have other priorities. Colleagues in other departments have already lost confidence and strategically distanced themselves in time. Now you get to explain it to the CFO. What could you have done to prevent this meeting? What five tips would you have liked to have had six months ago? And what are the pitfalls of a tool selection?
1. Don’t be dazzled by the analysts’ results
“Magic quadrants” or “waves” may seem to be a signpost to a safe choice for a new solution. After all, who has ever gotten in trouble for choosing a solution that was labelled as a market leader by a respectable analyst? However, many analysts’ reports on the choice of a Performance Management solution offer merely an illusory certainty. Almost 75% of any magic quadrant from Gartner is based on research among users in the United States. Unfortunately, crucial requirements for such a solution in the Netherlands are not relevant in the States. A “leader” according to US standards may not even meet the basic requirements in the Netherlands.
2. Don’t make your choices on your own
With the rise of cloud solutions, purchasing a new Performance Management solution seems to have become as simple as installing a new app on your phone. This makes it tempting to just buy a solution with your team of controllers, e.g. for planning and budgeting. Read all about how an EPM Software Selection program works.
But making this kind of purchase with just your own team is often a recipe for disaster and one of the tool selection pitfalls. Other departments look at solutions from a different perspective. They ask the questions that need to be asked. A good IT department checks data security and the ownership of the data. Purchasing knows how to find hidden costs. All of these issues can become nasty surprises later on and cause major problems.
3. Look beyond the features
In many selection processes the requirements are neatly mapped out. Once everything is outlined, RFIs are dutifully sent out asking if the vendor can meet these requirements. It is a trusted best practice that unfortunately provides little useful information and does not really show the differences between solutions.
You cannot get a good picture of a solution by only looking at the features. You have to drill deeper. Have a look at the characteristics of the vendor, for example. How are they financed? If there is private equity involved; how long have these individuals been on board? If the vendor has been taken over before; are the key figures who were the spiritual fathers of the solution still on board or have they cashed in and are now lounging under a palm tree? These kinds of questions tell you more about the future of a solution. Probe beyond the features, which are often no-brainers if you are looking at the right category of solutions.
4. Don’t automatically follow the market
Following in the wake of your industry peers is a common phenomenon. You will find certain Performance Management solutions spread throughout an entire sector. In a market where the solutions came with a new release every few years, this seemed a safe bet. However, the world has changed. Some cloud solutions come up with new releases four times a year. New functionalities and new integrations appear every quarter. Since changes are coming so fast, automatically following the choice in your sector may mean you are lagging behind.
5. Don’t outsource the choice to it
Tool selections are choices that are sometimes seen as high-risk. After all, you do not want to find yourself in the situation outlined in the introduction to this article. That is why sometimes the choice is “dumped” on the IT department. It’s a tactic that hardly ever has a happy ending. The biggest problem is often not the actual choice, but the lack of commitment to that choice by the future end users. If they don’t believe in it or aren’t four-square behind it, it will be hard to make it a success.
The will to make it a success
There are thousands of reasons why a Performance Management project could fail, and there are many more tool selection pitfalls, but there is a single reason why they succeed: the will to make the new solution a success. That desire has to grow from day one of a tool selection, and it should be shared by everyone involved.
Planning in PowerBI: Finext extends Planning and Analytics portfolio with partnership Acterys!
Digital Finance 2021
Digital transformation is a major trend. Many organizations see the need for it. It is no longer possible to imagine our working lives without it. On the 11th of November, our newest event 'Digital Fi...
Migration from legacy system to OneStream at Deli Home
Deli Home produces building materials and is known for brands such as CanDo, Bruynzeel, Lundia, Skantrae, and Weekamp. The international company has a strong growth ambition. As a result, it encounter...
No more out of date budgets, thanks to dynamic and integrated planning
On October 12th, our webinar "No more out of date budgets, thanks to dynamic and integrated planning" took place. Watch this webinar back at the bottom of the page!...