Gartner Splits the Magic Quadrant for CPM Suites

Corporate performance management (CPM) has been an established market and an important topic at Gartner and for its clients since 2001.

The CPM (also known as enterprise performance management, or EPM) domain has always spanned multiple processes within the Finance organization, including FP&A functions such as strategy management, integrated financial planning, and profitability management – as well as finance and accounting functions such as financial consolidation and reporting and financial disclosure management.

Recognizing that CPM spans multiple Finance processes, and the evolution in the way organizations are deploying these solutions, Gartner indicated in July of 2015 that it would be splitting its view of CPM software solutions into two segments: Financial CPM and Strategic CPM suites. And now, in May 2016, Gartner has published two separate Magic Quadrant Reports for these two areas.

Financial vs. Strategic Corporate Performance Management Suites

Splitting of the traditional Gartner Magic Quadrants for Corporate Performance Management Suites was a bold move on the part of Gartner’s CPM analysts. To our knowledge, it’s the first time Gartner has ever put products from different categories (e.g., Blackline, a close management system, and Planful, an FP&A platform) together on a single Magic Quadrant (MQ). While visionary and aggressive, it is also somewhat confusing – particularly for people used to seeing a Magic Quadrant full of different types of apples (McIntosh, Golden Delicious, Honeycrisp) and not one that positions different types of fruit (oranges, apples, pears).

Gartner’s intent is clear – to demonstrate through the use of two separate MQs those systems they think are financial/tactical from those they think are strategic.  Since we agree that organizations should be focused on both operational and strategic excellence, we are on board with their intent.  Although we don’t fully agree with the approach.

Let’s see how Gartner defines each:

  • Strategic Corporate Performance Management (SCPM) Solutions – this includes Corporate Planning and Modeling, Integrated Financial Planning, Strategy Management, Profitability Management, and Performance Reporting.
  • Financial Corporate Performance Management (FCPM) Solutions – this includes Financial Consolidation, Financial Management Reporting, Costing/Forecasting, Reconciliations/Close Management, Intercompany Transactions, and Disclosure Management (including XBRL tagging).

What This Means for CPM Suite Buyers

Splitting the Magic Quadrant for CPM Suites is a bold move by Gartner, designed to help Finance departments and enterprises to think more strategically about CPM solutions.  But it can also be confusing, as many organizations view all CPM processes as related and often prefer solutions that can integrate both the financial and strategic CPM processes.  They may start in one area initially, such as corporate planning, then expand into other areas such as financial consolidation and disclosure management.  So many buyers prefer vendors who can meet both their short-term and long-term needs.

In cases where a buyer is looking strictly for a corporate planning and modeling solutions, or a financial consolidation and reporting solution, the new Strategic and Financial CPM Magic Quadrants may be helpful. But for those looking for a broader CPM solution, or one that can be expanded to meet additional needs over time, the new MQs only present a partial view of the CPM vendor landscape.  So buyers will need to identify vendors that offer solutions in both MQs.

For cloud financial planning and analysis (FP&A) vendors like Planful, who offer a comprehensive, unified CPM platform that spans Financial and Strategic CPM suites, this new approach by Gartner downplays one of our advantages and splits our capabilities across two different Magic Quadrant reports.

Where Is Planful Positioned?

So you may be wondering where is Planful positioned in Gartner’s new Magic Quadrants for  CPM Solutions?  The good news here is that, based on the broad range of capabilities we support with our cloud-based CPM/FP&A platform – Planful is covered in both the FCPM and SCPM Magic Quadrant Reports.  We’re positioned as a highly ranked visionary in both CPM Magic Quadrants and are the only pure-play cloud vendor included in both reports.

This positions Planful as a vendor that can address a broad set of customer needs that cross the FCPM and SCPM domains.  According to Gartner, Planful was ranked as a visionary “due to its level of cloud experience, the customer satisfaction it delivers, and its products’ ability to support use cases of higher complexity.”

How to Use the Gartner Magic Quadrant for CPM Suites Reports

According to Gartner, the Magic Quadrant Reports present a global view of the primary CPM vendors from a market perspective. Vendors tracked in the Magic Quadrants vary in their capabilities to support different CPM processes and use cases.

More specific comparative product information can be found in another report titled “Critical Capabilities for Corporate Performance Management Suites.”  This report provides a more detailed assessment of the features and functions supported by various vendors and matches them up to specific use cases based on company size.

Buyers are advised to leverage both the Magic Quadrant and Critical Capabilities reports to identify potential vendors that provide solutions to meet specific company requirements.  In fact, Gartner now offers interactive editions of these reports to their clients, which allow buyers to specify their own criteria and better identify vendors who can best meet their requirements. But these reports are only a starting point to creating your short list of vendors.

As a prospective buyer, you should clearly document your requirements, contact vendors and perform a full evaluation of their solutions, and obtain a proposal on how the solution will be implemented to address your specific needs.  And you’ll want to check references before making a buying decision.

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