Carlson Thought Leadership in Finance & Technology

6 Tips for a Successful Cloud CPM Evaluation

April 14, 2015 / by Ethan Carlson

Are you considering replacing your legacy on-premise budgeting system for a cloud corporate performance management solution? If so, you are in good company as a recent Adaptive Insights survey of 300 finance professionals indicated that 86% want to leave their legacy system behind. Once you’ve made the decision to start looking around, the system evaluation sets the stage for a successful project and long-term benefits to the organization. However, there are several points you should take note of to ensure a thorough evaluation. In this post, we will review key priorities for embarking down this path.

Carlson on KPIs-of-High-Performance-Finance To receive maximum benefits, make sure the solution is ‘born of the cloud’.


1. Cloud or Pseudo-Cloud:  When you develop your evaluation criteria or begin engaging vendors, make sure their solution is truly a multi-tenant, cloud-based architecture that uses current technology. Many vendors today state in their marketing collateral that they offer cloud software, which is understandable considering the increased popularity of cloud solutions. However, you need to validate that their marketing aligns with the facts as many vendors have taken their legacy technology stack and updated with a “cloud” veneer. One way to determine whether their solution was "born of the cloud" is to review a diagram of their systems architecture. If it is overly complex with some surprising layers of technology, it’s probably not truly a cloud solution. Next, you should ask them to stage up a trial instance for your company. If they can't deploy a trial instance in a few days, they probably have a lot of older wiring behind the scenes that they're not telling you about. That also gives you an opportunity to play around with the solution and get a sense for usability and key features. One hallmark of cloud solutions that differentiates them from their legacy counterparts is ease-of-use. Also ask about their release schedule. Pseudo-cloud solutions typically have multiple versions running at any given time which slows the ability to roll out new features.

2. Consider working directly with an implementation partner:  It’s a natural tendency to engage a cloud solution vendor directly; however, it can be even more beneficial to deal first with an implementation partner. Software companies are primarily in the business of developing and selling software whereas implementation firms are focused on delivering successful projects and services. A benefit of working with a partner is that they have highly trained and experienced staff that have worked on significant numbers of implementations and bring these experiences to bear. They are also typically focused on long term relationships and will strive to build in-depth knowledge of your business. Interestingly enough, many solution vendors will bring in a partner firm to perform the implementation, so why not start there in the first place?

3. Information-sharing is a two-way street:  While many people think an evaluation entails the vendor providing information in support of their solution, there are things as a company you need to be ready to do as well. Foremost, you should be prepared to sign a non-disclosure agreement (NDA) and provide access to your existing models, financial information, current and future requirements, and key staff so that vendors understand exactly what your challenges and goals are. If you're very guarded and don't provide information and resources, it's difficult for them to facilitate a good evaluation. You should consider the evaluation as the beginning of a long-term relationship, so an NDA and a bi-directional flow of necessary information is key. Tangentially related to information-sharing is data ownership. Make sure that your company owns the data that would populate the system. Every cloud vendor will tell you that "SaaS is great because we have to earn your business every year." However, if you don't own your data and have the ability to discontinue your subscription at any time, then you are locked into that system and your leverage is reduced. So, make sure you understand the data ownership rights to that system and pay close attention to the terms of service.

4. Honesty is the best policy:  You need to be upfront and honest about both the challenges you have faced in budgeting, planning and reporting and what your eventual goal may be. Every company has models that are imperfect and maybe your team doesn’t perform all the analyses that you should. Be honest with the vendor about your shortcomings and let them know that perhaps you are looking to accomplish something you've never done before. By sharing your current status, warts and all, the vendor or partner firm can provide insights into best practices and can guide you through business process redesign. If you do that, you should have a better evaluation process and implementation that increases the likelihood of project success.

5. The Demo:  The demo is one of the pivotal activities upon which decisions are made. After all, by this time the vendor should have a reasonable understanding of your challenges and aspirations. They are also the solution experts and can show the features that you would want to implement and the benefits that you should expect. As such, you should insist on a demo that uses your data and speaks to your requirements. That is the best way to determine if they understand your business and can help you become more successful. If they are not able to do a personalized demo, then they probably have a more complex setup process than they are willing to reveal. Once again, this is another reason to consider engaging an implementation partner. A good partner should have experience in your industry, company size, and growth stage. They will therefore have an understanding your key financial and non-financial drivers and be able to “speak the language” of your business.

6. Speak to their customers:  Make sure that you talk to several actual customers and learn about their experiences, successes, challenges and efforts required to get them up and running. If they don’t speak positively to the ease in which they were able to get people trained, for example, that would indicate a potential red flag on the complexity of the system. You should be able to hear from customers that their cloud CPM solution takes only one, two, or however many days to get competency on the system once it's built. Don’t treat customer discussions as a formality, this is one crucial way to get the inside scoop on how the CPM vendor or implementation partner performs after the deal is done and money exchanges hands.

Cloud corporate performance management solutions are great investments in not only technology, but also allowing your team to focus on more value-added activities. However, proper due diligence in the underlying technology, an open relationship with prospective vendors, and proof that their solutions will deliver tangible value over the long-term are crucial before making this very important decision.

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