• ben zimmerman

CPM is Dead. Hail to the New King: AFP&A

In recent years, we have all witnessed the rise of CPM (corporate performance management) systems. Finance managers, after years of seeing other departments move to cloud solutions such as Salesforce, Marketo, Qlik and Tableau, also wanted flashy dashboards and cool graphics instead of the old boring green tables that they were used to.

The CPM tools addressed this need perfectly. With promises of “instant implementation,” “high ROI” and “this is how companies work today,” it wasn’t hard to sweep the market.

Today, however, the new AFP&A (Agile Financial Planning and Analysis) solutions are claiming the throne.


We wanted to see the effect real of the CPM revolution, where the market stands today and to understand why the AFP&A solutions are the new king.



Welcome to the Future

CPM solutions boasted one main advantage: Using them, organizations could move away from spreadsheets and move forward to a true enterprise system.

If there’s one thing that CEOs hate, it’s to see their finance departments wasting days collecting spreadsheets, consolidating them and preparing clunky reports that eventually fail to pass muster at the board meeting. Therefore, the promise of replacing Excel with an enterprise grade solution was a dream come true.

For CFOs, it was like being a child in a candy store, choosing a solution from a wide variety of giant vendors such as SAP, Oracle, IBM, or smaller ones such as Host Analytics, Adaptive Insights or Vena Solutions. It was realizing the dream of sitting in management meetings with a web-based dashboard.

The Challenge of Implementation

It’s a fact that 96% of IT projects fail to meet their deadlines, and implementing a new CPM solution is arguably worse.

Finance professionals, especially from the FP&A field, relate endless horror stories about companies that experienced painful CPM implementation processes. Often there was a gap between the “weeks of implementation” promised and the true months, and sometime years, of implementation.

The reality is that changing the way people work—especially when dealing with complicated financial processes that involve different departments and often multiple sites across the world—can be impossible.

No More Spreadsheets: The Promise That Has Run Dry

The reason why spreadsheets rule the world of finance is simple: They are flexible.

The finance models change and evolve rapidly, and financial experts need the freedom of painting on a blank canvas. Ultimately, a CPM solution is software that was designed by a company to answer the needs of hundreds or thousands of customers. It cannot be flexible enough to address the needs of a specific customer.

As requirements change over time, business evolves and software always lags behind, and that’s why 87% of CPM users eventually go back to spreadsheets in one form or another. You can imagine the disappointment of CEOs and CFOs who, a couple of years after enduring a painful implementation process to move away from spreadsheets, again see the green tables presented in management meeting rooms.

Budget: The Bottomless Pit

One main grievance we heard about CPM solutions was the disparity between the time and budget promised and the actual time and cost to go live. As with any IT project, CPM implementation projects were found to be taking more time and money than they were supposed to. This was obviously a major pain point for the company management.

The Rise of AFP&A Solutions

To meet the requirements of this evolving, continuously changing market, a new solution was needed to address these challenges. AFP&A (Agile Financial Planning and Analysis) solutions were the answer.

The advantage to these solutions is that teams and companies can work the way they are used to working, allowing for rapid implementation. By working on state-of-the-art cloud systems and automating the current methods of work of the end users, the companies enjoy both worlds.

The second advantage to the AFP&A method is the dynamic model calculation, which allows running simulations and scenarios by changing the raw data collected from the different company end points. This is accomplished automatically, without any manual input.

It appears that AFP&A solutions such as DataRails, Jedox and others are going to take over the market, but as always, we’ll have to wait and see what happens.

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