Robert Kugel's Analyst Perspectives

Planful, a financial planning and consolidation software vendor, held its annual Perform23 user conference in May. The event showcased the company’s ongoing investments to provide finance and accounting departments with the means to improve effectiveness by enhancing efficiency.

Over the past four years, Planful has steadily improved its planning platform to address the growing demand for integrated business planning software. The expansion of IBP reflects the current state of the world: We live in a time of uncertainty, not unpredictability. Managing an organization in uncertain times is always hard, but tools are available to improve the odds of success by considering the impact of a range of events or assumptions and devising plans to deal with them. Dedicated planning and budgeting software has been around for decades but has become increasingly more versatile as vendors incorporate capabilities that accelerate forecasting cycles and facilitate scenario planning to quickly investigate the impact of different contingencies and the consequences of a range of reactions to them.

One of the topics covered during Perform23 was investments the company has made to improve the performance of Planful Predict, a suite of artificial intelligence-enabled capabilities that make it easier to create and use predictive models and sanity check projections. Ventana Research asserts that by 2026, almost all vendors of planning and budgeting software will incorporate AI to reduce workloads and improve accuracy.

Planful has expanded its library of built-in forecasting and planning algorithms. Algorithms are often much better at identifying underlying patterns, relationships and trends within the data than humans. They weed out personal bias and uncover complex, multivariate relationships in the data. Rather than requiring organizations to develop data science skills, vendors like Planful include a range of algorithms that assist in the process. But algorithms alone are not enough. To make artificial intelligence and machine learning useful and practical for even moderately complex tasks, applications or platforms need a resident data store that enables the system to learn and refine its predictions. The data must be relevant to the user and use cases and in the same form and structure needed to model, predict, forecast, plan and report.

Data management automation is a critical capability necessary to support AI/ML and substantially reduce the time organizations spend on data preparation and checking for errors. Planful recently introduced Ivy, a proprietary framework that achieves faster and unified data handling, designed to facilitate planning, consolidation, accounting close and reporting processes in Planful. Ivy enables simplified data collection, validation, processing and reporting while ensuring data security, accuracy and consistency.

Ivy aligns with our concept of the data pantry, a method of data storage (and the technology and process blueprint for its construction) created for a specific set of users and use cases in business-focused software. It’s a pantry because all the data needed for a task is readily available and easily accessible, with labels immediately recognized and understood by all users. A key benefit of capabilities such as Ivy is that it can significantly reduce the time spent on data preparation, which our Data and Analytics Benchmark Research shows is a burden that crowds out time spent on analysis. The research found that 69% of participants spend the majority of time preparing data, with only 27% focusing on how changes impact current business.

The capability provided by Ivy is also necessary to support AI/ML systems used for predictive and prescriptive analytics or forecasting and planning based on time-series analysis. A data pantry facilitates machine learning by making it possible to amalgamate a broad set of information from many sources to create more realistic and statistically relevant models that produce more accurate forecasts to support planning and decision-making. Having that data as part of a planning platform is necessary to make ongoing training and model enhancements practical.

Technology makes it easier to link data from each business unit’s planning process to facilitate integrated business planning. Integrating planning silos requires the system to help line-of-business users translate plans into financial terms. To that end, Planful acquired Plannuh last year (now called Planful for Marketing) to enable marketing departments to plan activities, track results and translate these into accounting terms and financial metrics. Organizations can plan more effectively by reducing friction and promoting a constructive dialog between finance and marketing. Understanding how well various marketing initiatives performed allows organizations to prioritize successful activities. Since the acquisition, Planful has enhanced the software with additional budget management and reporting capabilities.

At the same time, the company is less keen on applying generative AI or large language models pending the resolution of several issues. Concerns include those in the legal domain (such as the inadvertent use of copywritten materials or patents for commercial purposes), privacy (the risk of exposing sensitive material) and enabling others to access – and exploit – commercially valuable internal information or intellectual property.

Perform23 sessions also highlighted Planful’s strategic partnership with Trintech to provide an integrated close management system that includes Planful’s consolidation system and Trintech’s Adra software. The combination enables organizations to accelerate the record-to-report process while increasing control and auditability. Our Smart Close Dynamic Insights research found that only one-third of organizations have automated all or many close processes. The research confirmed that, on average, organizations that have automated all or most processes complete the close days sooner than those with little or no automation.

Aimed mainly at midsize organizations, Trintech’s Adra supports transaction matching, account reconciliations and task management, with related analytics for visibility and insight to evaluate the department’s efficiency and quality in managing the close process. Transaction matching substantially reduces the time spent ensuring the accuracy and fidelity of financial statements by automating the tedious tasks of matching transactions with bank and credit card statements, point-of-sale systems and other internal or external sources of data. Midsize organizations typically do not have the transaction volume and complex legal entity and systems complexity typical of larger businesses, and Adra’s cost to deploy and maintain offers an advantage without sacrificing performance.

We live in a world that is uncertain but not unpredictable. Organizations can benefit from dedicated planning and budgeting software to anticipate the future and plan accordingly. The software can integrate business unit planning processes to achieve more accurate forecasts and better-coordinated execution. And by shortening the close, organizations have more time for analysis to better communicate performance and economic conditions. I recommend that organizations looking for software for forecasting, planning, budgeting or managing the close, consolidate and report cycle (or both) include Planful on the list of vendors for consideration.

Regards,

Robert Kugel