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Ventana Research recently awarded Workday a 2016 Technology Innovation Award for its newly released application, Workday Planning, because it simplifies and streamlines the budgeting and planning processes while facilitating collaboration, deepening visibility into spending and enabling tight fiscal control. These capabilities can help a variety of user organizations in several ways.

While I’ve long stressed the importance of ventanaresearch_technologyinnovationawards_winner2016_whitepaying more attention to business planning and less to budgeting, that doesn’t apply to every organization. By “business planning” I mean a process of capturing the most important “things” in business plans that drive results, such as production volumes, material yield, labor hours, sales pipeline conversion ratios, capacity utilization and so forth, while deriving the financial implications (revenues and expenses) to create a financial budget from those plans. However, this approach isn’t applicable to most government, higher education and nonprofit organizations. For them, the financial budget is usually of paramount importance. In addition, companies that have relatively stable and predictable revenues (such as regulated utilities) may have a preference for a traditional planning and budgeting process focused on controlling costs.

Especially if expenses related to head count consume a substantial share of their operating costs, organizations using Workday for their financial management and human capital management (HCM) requirements are likely to find its software an attractive option, especially if the organization is using desktop spreadsheets to manage its planning processes. Our next-generation business planning benchmark research finds that 82 percent of government, education and nonprofit organizations use spreadsheets for budgeting (compared to 66% of all other corporations). A dedicated application such as Workday Planning can improve financial control and visibility while streamlining planning, budgeting, reporting and reviewing.

Almost all government, higher education and nonprofit organizations operate in a way that puts a priority on controlling expenditures. This is because, either by statute or contract, money spent on a department or purpose cannot exceed the amount set in the budget. These types of organizations employ fund accounting, a system for recording and tracking resources whose use has been limited by law or by a donor, grant authority, governing agency or other individuals or organizations. This approach contrasts to almost all for-profit businesses, for which no such restriction exists and executives can alter spending at their discretion to address business needs and conditions.

Most government, higher education and nonprofit entities have little need for sophisticated business modeling, which is valuable when dealing with uncertain revenue flows and costs associated with them. For these organizations, fiscal control, visibility into how monies are being spent and ease of budgeting and administration are key concerns in managing their finances. Software designed for this purpose can add considerable value to the process by reducing the effort required to establish budgeted amounts, monitor outlays by individual budget, and enhance visibility into spending and trends while providing targeted alerts when necessary to address issues.

Our next-generation business planning research reveals that 82 percent of government, education and nonprofit organizations use spreadsheets for budgeting. Compared to spreadsheets, Workday Planning can provide a better budgeting experience because it is an integral part of Workday’s financial management and human resources applications. This eliminates the cost and bother of maintaining links between a budgeting system, the general ledger and HCM systems. Because Planning is part of a single system it uses the same data as financial management and HCM, updates to actual results are immediate and effortless, as are changes to head count. And because planning data uses this same database, periodic reports and dashboards will show accurate and up-to-date information about actual and committed spending as well as spending trends. Another reason why companies replace spreadsheets with a dedicated application is that the latter enables them to look forward. Our research finds that 55 percent of companies that use a dedicated planning application are able to explore all the implications of various scenarios, compared to 40 percent that use spreadsheets.

vr_ngbp_06_dedicated_applications_help_users_look_ahead_updatedAdditionally, Workday’s software has a strong set of collaboration-in-context features that facilitate rapid exchanges to sharpen the plans and speed their completion. Rather than exchanging spreadsheets, commentary and documents through a disjointed series of emails, instant messages or comments inserted in a spreadsheet cell, individuals can communicate with a group of relevant individuals. They can refer to specific budget or income statement items as well as related documents in a persistent conversation thread that can be easily referenced at any point in the future.

Workday also can significantly improve visibility into spending and fiscal control. Expenditures are immediately charged against specific budgets. Combined with planning data covering the remaining fiscal period, the software can provide an alert when outlays are running ahead of plan. Organizations with a disciplined purchase order system can also monitor committed spending against a budget. In such a case, those approving a purchase can immediately determine not only if funds are available and but also whether outlays for this particular purpose are in line with the budget and whether spending alterations must be made in future periods. Government, higher education and nonprofit entities often are people-intensive, so having head-count plans and related costs as part of the same system that holds compensation and head-count data (both actual and anticipated) ensures that budgets are always synchronized with up-to-date actual amounts and projections about head count, salary and benefits.

I strongly recommend that government, higher education and nonprofit organizations that use fund accounting and are currently using Workday for both financial management and HR evaluate Workday Planning to manage planning and budgeting, especially if they are currently using spreadsheets. Organizations of this type that are currently evaluating systems that combine financial management and HCM software should take into account Workday’s planning and budgeting capabilities in making their vendor selection. Similarly, I recommend that corporations using Workday Financial Management and HCM that prefer traditional budgeting and are currently using desktop spreadsheets to manage the process should evaluate Workday Planning as a replacement.

Regards,

Robert Kugel

Senior Vice President Research

Follow Me on Twitter @rdkugelVR and

Connect with me on LinkedIn.

SYSPRO is a 35-year-old software vendor that focuses on selling enterprise resource planning (ERP) systems to midsize companies, particularly those in manufacturing and distribution. In manufacturing, SYSPRO supports make, configure and assemble, engineer to order, make to stock and job shop environments. The company attempts to differentiate itself through vertical specialization and its years of ongoing development, which can reduce the need for customization and cut the cost of initial and ongoing configurations to suit the needs of companies in these industries, thereby reducing the total cost of ownership. Worldwide its targeted verticals include electronics, food, machinery and equipment and medical devices; in the United States, SYSPRO adds automotive parts (original equipment and after-market) and energy. The company’s development efforts follow a design philosophy that balances its target customers’ need for software capabilities that are on par with larger enterprises with their resource constraints (chiefly limited financial resources and technical staffs).  Its software can be deployed on-premises or in the cloud.

The ERP system is a pillar of nearly every company’s record-keeping and management of business processes. It is essential to the smooth functioning of the accounting and finance functions. After a decade of stasis, the evolutionary pace of technologies that shape the design of ERP systems began accelerating over the last couple of years, as I have noted. Reflecting this trend, SYSPRO recently introduced new capabilities to

  • Facilitate business process collaboration and information retrieval
  • Provide integrated customer relationship management functionality
  • Enhance the user experience
  • Expand its Web hosting offerings.

Because almost all business processes require collaboration, users of ERP systems need to work with colleagues in performing some functions within the application itself. In the past this typically required using email or a third-party instant messaging service, but recently vendors have started to incorporate collaboration services in their application suites. To this end, SYSPRO has added Harmony, a cloud-based platform that enables internal and external collaboration (the latter to interact with suppliers and channel partners). Harmony also facilitates the use of data analytics and reporting, which is helpful because it hasn’t always been easy to get information and insight directly out of ERP systems. In our Office of Finance benchmark research fewer than half (48%) of companies said they find it easy to get information from their ERP system. SYSPRO has added new predictive search capabilities to quickly provide the most relevant answers. Its vr_office_of_finance_21_information_access_in_erp_updatedWeb “robot” enables users to interact with SYSPRO’s applications using a natural language approach. For example, writing “Show me all invoices from ABC Co. over the last 12 months” will retrieve those records.

SYSPRO’s new CRM application enables companies to manage pipelines and marketing campaigns as well as handle service contracts. It also integrates with Microsoft Outlook to facilitate contact management. In its initial release the capabilities are basic, but it will likely meet many companies’ customers’ requirements. It has the advantage of being an integral part of the system so its total cost of ownership can be lower than that of similar systems. It is available as a cloud-based, multitenant offering or can be installed on-premises. The mobile version has a responsive user interface design that adapts to the specific device on which it’s running.

Keeping with an industry trend, SYSPRO has worked to simplify its user interface. Its Workbench UI is designed to make it easier for companies to tailor screens to the specific needs of individuals based on their roles or tasks without the help of a professional developer. Self-service configuration is an attractive capability for midsize companies because it reduces the cost of ownership and provides the application with greater flexibility when roles or processes need adjusting to meet changing business requirements.

SYSPRO provides customers with two basic cloud options. Its BusinessLive software as a service is a subscription offering that fully outsources the operation of the application and requires no capital outlays. Customers also can use SYSPRO to host their licensed software and avoid having to perform routine software maintenance or take care of hardware and security. SYSPRO recently added Microsoft Azure as an option for managed service in addition to Amazon Web Services.

As I’ve noted, deciding when to replace an ERP system can be complicated. Usually, companies need to do it because the business has outgrown (or will soon outgrow) its capacity to handle transaction volumes. Another trigger can be when it becomes too difficult to configure it to specific requirements because the company’s business model has changed significantly, it had to adjust its go-to-market strategy, added a new product line, expanded geographically or made an acquisition. I recommend that companies that operate in SYSPRO’s target industries and are considering replacing their existing ERP system evaluate the company’s software. Its ERP suite is functionally rich, and the company has demonstrated a commitment to protecting its customers’ investments by its dedication in applying technology advances to its applications.

Regards,

Robert Kugel

Senior Vice President Research

Follow Me on Twitter @rdkugelVR and

Connect with me on LinkedIn.

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