You Won’t Want to Miss these Key Trends in Financial Planning & Decision-making

Planning and decision-making expert Howard Dresner, Chief Research Officer at Dresner Advisory Services recently released its “2020 Wisdom of Crowds Enterprise Performance Management Market Study” report. Now in its 11th year, the report profiles enterprise performance management (EPM) market trends based on customer survey data and ranks vendors against 33 different survey criteria to provide an overall ranking that are categorized as Customer Experience and Vendor Credibility.

We’re honored to once again be recognized by survey respondents as an Overall Leader in Customer Experience and Vendor Credibility. This recognition is particularly meaningful for Planful as we’ve spent the past year continuing to enhance both our platform capability and customer service capabilities to help our customers realize their Continuous Planning vision.

The findings of this year’s Dresner report are exceptionally promising — especially the nearly 10% increase in FP&A software adoption in the last year alone. More and more, we’re seeing momentum in the market as business leaders and executive teams look to company-wide planning approaches for more collaborative and agile decision making.

Let’s look at some of the key trends and takeaways from this year’s report, as well as Planful’s focus on the customer experience over this past year. Below I dive into some of the findings we found most interesting. You can also tune into my recent episode of our Being Planful podcast where I dive deeper with Howard himself.

A look at the trends: more than just a tool for finance

One key takeaway from this year’s report is the evidence that supports growing market maturity over the past year. According to Dresner, 47% of organizations are currently using FP&A software, compared to 38% in 2019.

Figure 5 – EPM software use 2019-2020

Further analysis of the data indicates that finance and operations teams are the highest adopters of FP&A software solutions, with 61% and 57%, respectively. For the office of finance, this is no surprise since finance teams are often the ones using these planning and reporting capabilities most frequently. 

The higher levels of adoption by operations teams, however, are quite encouraging. According to Dresner, this year’s data indicates that operations teams are more prepared to embrace solutions outside of their domain silos. Its usage increased by 7% since last year, amounting to further evidence that businesses continue to embrace an enterprise-wide planning approach.

The positive signs don’t just stop with operations. FP&A software usage among executive management teams also increased significantly since last year, jumping up to 52% from just 25%. Dresner notes that this is a positive sign for how organizations can respond to the COVID-19 crisis, as FP&A solutions can help business leaders manage short-term uncertainty and plan for the new normal ahead.

Figure 8 – EPM software use by function

Perception among executive management respondents was also high: 85% believe that FP&A software is either “critical,” “very important,” or “important.” Dresner cites this as further evidence that organizations consider FP&A software to be an important technology across the organization rather than just a finance-oriented tool. 

At Planful, we believe that executive teams today have an exciting opportunity ahead of them. As leaders, we can re-imagine what the traditional planning and decision-making process looks like for our organizations and drive better business outcomes through a finance-led approach to business-wide planning.

Notable changes in use-case priority within FP&A

So, what did respondents cite as the highest-priority planning capabilities and what changed since last year? Unsurprisingly, budgeting and planning capabilities continue to remain a foundational aspect of any FP&A solution, and the annual financial budget once again clinched the top spot.

However, there were some notable changes in the top ten capabilities since last year. According to the Dresner report, capital asset planning replaced the ability to link strategic plans to the annual budget as a top-ten item. Cash-flow forecasting and planning also increased slightly in prioritization to overtake workforce planning as the second-highest priority.

Figure 23 – EPM planning priorities

The research reinforces what we’ve been seeing around the importance of disciplined cash management during a global pandemic. The focus on cash flow will likely remain a top priority for most companies this year. The same goes for capital asset planning: as businesses cautiously transition into their regroup and recovery phases, understanding where the traditional office environment fits into the new normal will be a key consideration.

All in all, Dresner believes these findings are positive signs since cash-flow and capital asset planning are key capabilities that will help organizations manage their way through the COVID-19 crisis.

One thing that hasn’t changed? Respondents continue to prefer cloud FP&A software over on-premises deployment. We saw the need for cloud planning tools become increasingly magnified during the onset of COVID, and we anticipate that this trend will continue to evolve as more businesses consider permanent remote working environments.

Our commitment to Planful customers

Customers are the heart of our business, and their quest for progress and innovation inspires the very decisions we make as a company. As a trusted planning partner, we’ve watched our customers shift their cultures to the adoption of proactive and continuous financial planning processes.

Our customers have not only become better at planning and decision-making, but they’ve become more interested in and aware of the operational benefits that are created by sound planning culture. As a result, our customers have become more planful — and this year, so did we. 

To learn more about current financial planning & analysis (FP&A) trends and FP&A technology vendors, download the Dresner “Wisdom of Crowds Enterprise Performance Management Market Study” and tune in to our latest podcast episode with Howard Dresner to drive into the data and findings live.