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How the Anaplan Acquisition of Fluence Will Change the CPM Market (For the Better)

/in /by BPM Partners

Craig Schiff , President and CEO, BPM Partners

Overview

Anaplan has announced their intent to acquire Fluence Technologies with the deal expected to close by the end of the month, if not sooner. This may look like yet another routine acquisition of a smaller vendor by a larger vendor in the enterprise software space. These types of deals occur on a regular basis and most people barely pay attention anymore. This one is different though, and its impact will ripple through the red-hot performance management market. For one thing, it validates the importance of true financial consolidation capabilities as a key component of performance management solutions and may cause some planning-only vendors to sit up and take notice. Let’s drill into the details.

Anaplan, Fluence, and Their Customers Will Benefit From This Deal

Both vendors and their customers benefit significantly from this combination. The two vendors’ offerings complement each other nicely, filling in key gaps, with minimal overlap. Anaplan pioneered ‘connected planning’ starting with a focus on providing a flexible platform for aligning strategic and operational planning, followed by the addition of robust financial planning capabilities. Today, Anaplan on its own is a planning leader, but in large enterprise deals financial consolidation has only grown in importance, and that is a key component they lack. Fluence, on the other hand, is focused on financial consolidation, redefining how a financial consolidation solution can handle complexity while also simplifying its administration and use by leveraging out-of-the-box functionality. Fluence’s challenge has been their lack of planning capabilities, requiring them to partner with other vendors for the significant number of companies looking to purchase both consolidation and planning. This two-vendor CPM solution approach didn’t always go over well. Anaplan, after the Fluence acquisition, will be able to provide its customers and prospects with the complete performance management planning, consolidation and disclosure management solution that most companies are looking for. This will enable the Finance team to utilize the Anaplan platform to plan their business in real-time while also being able to leverage a familiar UX to control and execute consolidation and disclosure management, streamlining the entire process and accelerating time to decision-making.

Anaplan Joins the Ranks of the Comprehensive CPM Solution Leaders for Large Organizations

The combination of these two leading CPM vendors will create a new dynamic in the top-tier of large enterprise focused performance management vendors. When this acquisition is complete Anaplan will join OneStream Software, Oracle, and Wolters Kluwer CCH Tagetik as one of the few leading vendors in the world offering a complete CPM suite of financial planning, operational planning, financial consolidation and close, reporting and analytics for large organizations. You might wonder why certain other familiar vendor names are missing from this list. The simple answer is that their current financial consolidation strategies disqualify them. As the Anaplan acquisition of Fluence highlights – financial consolidation, and the ‘one version of the truth’ that it enables, is critical to companies trying to measure their actual performance against plan.

Best-of-Breed Becomes a Real Choice

There has been renewed interest in best-of-breed solutions, particularly when it comes to planning and consolidation. Buyers see the value in purpose-built performance management solutions architected and optimized for particular use cases, they just don’t want to get them from two different vendors and have to worry about integration and support. Fluence is a best-of-breed consolidation solution, and as part of Anaplan it will remain as such. The current Anaplan Connected Planning platform and the Fluence product will work together as two best-of-breed solutions, integrated at the data level, sold and supported by a single vendor. If this sounds familiar it’s because it’s very similar to the approach Prophix has taken with its Prophix One platform which incorporates its Sigma Conso consolidation product acquisition.

Midmarket Consolidation Solutions

The acquisition of Fluence by Anaplan for consolidation capabilities validates the activity that has been going on for a while now in the midmarket where planning vendors have been expanding their own consolidation capabilities. Planful, during its Host Analytics days, was one of the first vendors in the midmarket to see the importance of consolidation and delivered those capabilities alongside planning and budgeting. More recently they have been enhancing their offerings in this area through strategic partnerships. Prophix, as previously mentioned, now delivers a complete CPM suite for the midmarket through their Prophix One offering. Vena, although a Fluence partner, has built out their own consolidation capabilities to the point where they would only need to bring in Fluence for very specific consolidation use cases. While it is unclear right now what will become of Fluence’s existing vendor partnerships, Vena continues to enhance its consolidation capabilities to address the most complex requirements, while also leveraging Vena Copilot to provide insights into the consolidated data, all included in Vena’s Complete Planning platform. Even Workday Adaptive Planning has recognized the importance of true financial consolidation alongside planning, as evidenced by their recent announcement of Workday Adaptive Planning and Consolidation which leverages the consolidation capabilities of Workday Financial Management through a unified data model.

The Future

Beyond the current crop of vendors, most new CPM vendors are still in their early stages and are focused primarily on financial planning and modeling for smaller organizations. There is one major exception however. JustPerform, who we named our Best New Vendor in 2022, provides a very capable financial consolidation and planning solution targeted at the upper midmarket/large company market segment. Despite their relatively small size they have been effectively competing with some of the larger vendors in this space.

While there will always be a place for budgeting and planning focused vendors, for large companies and growing midmarket organizations consolidation has shown itself to be an essential component. With the Anaplan acquisition of Fluence these companies now have one more compelling option to consider when looking for a modern and comprehensive CPM solution.

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This is an important topic that directly impacts you if you are planning to purchase a new performance management solution. To ensure you incorporate the latest developments into your project plans talk to us, or add us to your team.

Vena Announces Vena Copilot for FP&A

/in /by BPM Partners

Craig Schiff , President and CEO, BPM Partners

Overview

We are at an interesting juncture in terms of the adoption of AI in performance management systems. While vendors have been steadily rolling out AI capabilities for a number of years now (anomaly detection, predictive forecasting with machine learning, natural language processing, etc.) customers and prospects have basically reacted with a shrug, or worse. In our 2023 BPM Pulse survey 74% of respondents were skeptical of the value that AI could bring to CPM, and therefore hesitant to take advantage of it. It’s a year later and I hope the 2024 BPM Pulse will show significant movement towards greater acceptance.

All the noise around generative AI has certainly increased interest in AI, but that hasn’t yet translated to it becoming a buyer priority for CPM solutions. Users have basically said: ‘I don’t need AI to do my job for me, I just want it to make my job easier’. For vendors, the key will be to add AI in a seamless, non-threatening manner that clearly adds value, ideally in terms of productivity. For example, this could mean automating routine tasks, quickly locating requested data, reconciling data, customizing workflows and related tasks/menu choices based on roles and responsibilities. Much of this actually falls under the banner of ease of use, which is a priority for everyone and should aid in adoption. As a matter of fact, Microsoft’s recently announced Copilot for Finance takes this approach, focusing on streamlining the analysis and presentation of financial data. The true value of AI for Finance comes not so much from large-scale generic AI capabilities, but how well trained the model is specifically on financial data, and the company data model in particular. In other words, the more localized the focus the better, which brings us to Vena Copilot for FP&A.

Vena Copilot for FP&A

In business applications the most desirable AI capabilities are those designed to address selected use cases related to specific business roles and requirements and tied to the company’s data model. That is exactly the type of solution Vena set out to deliver with Vena Copilot for FP&A, a purpose-built solution to enhance FP&A productivity. Utilizing Microsoft Azure OpenAI Service large language models, Vena Copilot for FP&A is essentially an advanced conversational assistant for self-service insights. It enables users to gather data, generate reports, and analyze trends in a fraction of the time it would have taken them to accomplish those same tasks on their own.  The setup walks business users through the process of creating and training their unique AI model. They can choose from revenue or cost focused templates, or build their model from a clean slate. Next, they point it to their data model and map the appropriate elements of their Finance cube for model training. When they are satisfied with their model they can publish it, which makes it available for use across the organization. Once in use they can review user interactions and the scoring of the accuracy of the model and further train and fine-tune if necessary. That’s it. A custom model, tied to their unique needs, using their data. Vena Copilot for FP&A harnesses the power of generative AI specifically for FP&A users on the Vena Complete Planning platform. Currently in beta, the product is scheduled for general availability this May.

Vena’s Progress

Vena Copilot for FP&A complements other recently released or enhanced AI capabilities including Vena Insights, which provides AI-powered data visualizations with key influencers, decomposition trees, and anomaly detection. Vena advanced predictive forecasting unites Excel, the Vena CubeFLEX™ analytical data model, and Azure Machine Learning to deliver deep learning capabilities to improve forecast accuracy. There are several other product enhancements recently or soon-to-be released including new collaboration capabilities, additional Microsoft 365 integrations, and support for Vena data exports to feed processes in other systems. While R&D has been busy, Sales hasn’t been sitting still either. By our estimate Vena has added over 400 new customers in the past year, which is particularly impressive considering how competitive this space has become. We believe Vena is on the right track, fully leveraging the Microsoft technology stack to deliver innovative CPM solutions to midmarket Finance teams, and Vena’s sales momentum indicates we’re clearly not alone in our thinking.

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The performance management market is rapidly evolving. If you plan to purchase a new solution make sure you don’t base your decision on outdated (or biased) information. Talk to us first, or better yet: add us to your team.