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Four vendors among best CPM software for strategic purposes

Gartner Magic Quadrant for strategic corporate performance management software selects Oracle, SAP, IBM and Adaptive Insights as leaders and ranks 12 other vendors.

The 2016 Gartner Magic Quadrant for strategic corporate performance management ranks products by 16 vendors serving...

a variety of small, midsize and large companies.

The 39-page report is partly based on a survey taken between November 2015 and January 2016 and includes responses from 736 organizations around the world. The products in this category help CFOs and other business leaders orchestrate the performance of an organization and manage strategy in a more controlled and open manner. To be included, each vendor needed to support at least two of the five components of strategic corporate performance management (CPM): budgeting and planning, integrated financial planning, strategy management, profit modeling, and performance reporting.

Christopher Iervolino, lead author of the report and research director for enterprise application suites and ERP at Gartner, discussed the findings with SearchFinancialApplications.

How do you define the best CPM for strategic reasons, as opposed to financial?

Christopher Iervolino, Gartner research director for enterprise application suites and ERPChristopher Iervolino

Christopher Iervolino: Budget planning and forecasting and financial modeling are strategic and they are responsibilities of the Office of Finance, but they are most beneficial for the organization as a whole. Financial CPM is more about the accounting process, which, once again, is in the realm of office of finance but is more exclusively for the benefit of the office of finance. In order to better define the market, we issued a separate Magic Quadrant for financial corporate performance management.

The Gartner survey indicates that about 30% of organizations have already moved financial components to the cloud or will do so in 2016. How is the cloud trend progressing among the best CPM tools for strategic purposes?

Iervolino: In previous years, organizations were far more likely to be kicking the tires with the cloud. They often wanted to know what existed in the SaaS [software as a service] market but had no tangible plan to move. Now, if an organization has not already moved to the cloud in 2016, cloud is certainly a topic of conversation in all organizations one way or another.

Why is the conversation becoming more serious if they have not moved financial components to the cloud already?

Iervolino: Organizations might be using the cloud in conjunction with traditional on premise. Organizations see the value of the agility and flexibility provided by the cloud. They are taking advantage of cloud capabilities -- faster time to value, painless upgrades, more intuitive interfaces, ease of use, new functionalities and better analytics.

What is the appeal of on premises considering the advantages of cloud?

Cloud is certainly a topic of conversation in all organizations one way or another.
Christopher Iervolinoresearch director, Gartner

Iervolino: One consideration is long-term pricing. There is more control over prices on premises. With the cloud, a vendor might charge a separate subscription for every single application. If an organization has 10 applications ... it might be charged 10 separate subscriptions. That would not be the case for on premises.

With on-premises software, an organization can pick and choose when to do updates. A lot of it depends on the business need. If there is a stronger need to leverage new functions, then cloud might be a better choice. If that need does not exist, then on premises has its advantages.

Adaptive Insights, a cloud pure play SaaS vendor, provides some of the best CPM for strategic reasons along with giants IBM, Oracle and SAP. Why did Adaptive Insights get this nod from Gartner?

Iervolino: Adaptive Insights is a leader in servicing small to medium-sized businesses. We credited them as such. When you look at the criteria for the Magic Quadrant, marketing and sales and execution of those is very important. Adaptive Insights executes well in those areas.

Oracle gets the No. 1 rank partly because of its high market share, with 80% of its survey participants netting $1 billion or more in annual revenues. Oracle is seeing strong momentum with its Oracle Planning and Budgeting Cloud Service. Oracle's Planning and Budgeting Cloud Service is generally given higher marks for implementation compared to the on-premises Hyperion Planning. Why is that?

Iervolino: In general the cloud cuts out a few steps in the implementation. The cloud is easier to get up and running and users don't need to be concerned with architecture -- interfaces and structural elements.

On premises is also more complex in that architecture and middleware configuration exists and application design must take them into close consideration.

SAP is a leader partly because of a large customer base committed to its offerings, especially for ERP. Also, you like SAP's vision for a common HANA platform for both on premises and cloud. Why could this be a benefit?

Iervolino: Enterprise performance management, which Gartner refers to as financial and strategic CPM, has never fully delivered on its initial promise. The latency between ERP's transactional system and CPM's analytic system has impeded overall performance management and added a lot of effort and support to the process.

HANA is a hybrid transactional-analytic platform. Adoption of a platform that can handle both analytics and transactional information has real promise in this space.

Some CPM capabilities will be more unified with ERP.

IBM supports some massive companies and offers some special strategic CPM capabilities. Sixty-five percent of IBM's customers surveyed for the report each had more than 200 users and they generally gave the company high marks for performance. Why is that?

Iervolino: IBM has always played well in the space. They are stronger on the strategic CPM side than the finance CPM side. IBM has large market share, and a large installed base and strong partner ecosystem. The capabilities of the IBM CognosTM1, including visualizations and the Watson analytics features introduced, are other reasons that define IBM as a leader.

Anaplan was ranked highest for completeness of vision. Why is that?

Iervolino: Anaplan's integrated financial planning approach targets business users across multiple domains by providing collaborative modeling capabilities with improved ease of use in the cloud. The combination of these is innovative.

Next Steps

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