Report:
Magic Quadrant for Financial Planning Software
How does Gartner define the Financial Planning Software market in 2023?
Gartner defines financial planning software as the key tool that enables organizations to automate and streamline their enterprisewide financial planning processes. The software supports planning, budgeting and forecasting processes by connecting relevant operational and driver data to profit and loss, balance sheet and cash-flow financial statements. Additionally, the software offers enhanced decision support and analytics that can be customized to unique planning requirements. To provide this support, financial planning software offers data integration, data modeling, reporting and workflow capabilities, which all enhance a user's ability to effectively manage the planning process and their organization's financial performance.
Key Facts for Magic Quadrant for Financial Planning Software in 2023
- Publication Date: 5 December 2023
- Document ID: G00784792
- Coverage: 50 min read
- Authors: Regina Crowder, Matthew Mowrey, and 1 more
- Core Purpose: Financial planning software facilitates FP&A transformation and covers planning, budgeting, forecasting, modeling, performance reporting and agile insights. FP&A leaders can use this research to assess vendors best suited to offer technology solutions for their FP&A processes.
Strategic Planning Assumptions
No strategic planning assumptions provided.
How was the Financial Planning Software market evolved in 2023?
- Financial planning software enables organizations to automate and streamline enterprisewide financial planning processes
- Solutions connect operational and driver data to profit and loss, balance sheet and cash-flow financial statements
- Software offers enhanced decision support and analytics customizable to unique planning requirements
- Market has shifted from on-premises to cloud-based SaaS offerings with subscription-based pricing
- Vendors are investing heavily in AI/ML predictive capabilities for enhanced forecasting
- Greater transparency in AI/ML predictive results with confidence intervals and optimal models
- Enhanced integrated business planning (IBP) through extended financial processes across departments
- Evolution of natural language processing (NLP) for automated summarization and context
- Increasing focus on cross-functional collaboration features and remote workforce support
- 15 vendors evaluated: 8 Leaders, 2 Challengers, 1 Visionary, and 4 Niche Players
What product features are required to be included in this year's evaluation?
- End-to-end management of enterprisewide financial planning, budget and forecasting processes — This entails supporting flexible end-user-driven modeling capabilities, customizable planning dimensions and consolidations at the enterprise and business functional level.
- Administration functionality necessary to support planning activities — This involves the creation and prepopulation of new planning cycles, modification of business rule logic, dimension maintenance and security profile functionality.
What are the common features of top products in the Financial Planning Software space?
- Configurable user-friendly reporting and dashboarding — This applies to the ability to generate financial statement reporting (i.e., balance sheet, income statement and cash flow). It also applies to gaining actionable insights into the financial or operational performance of an organization through dashboarding visualizations that allow for a more cross-functional and inclusive approach when explaining trends and results.
- Built-in audit trails and versioning — This involves the ability to monitor events that occur within the system including data entry, data changes within the planning process and versioning to help users track the evolution of their data and models.
Scope Exclusions
- On-premises-only solutions
- Hosted on-premises options
- Solutions that must be bundled with other ERP modules
- Solutions that must be bundled with accounting systems
- Solutions that must be bundled with business process outsourcing (BPO) service contracts
- Vendors with less than 50% of customers having annual revenue above $50 million
- Vendors with fewer than 250 live customers as of December 31, 2022
- Vendors without active presence beyond home region
- Vendors with less than $25 million in cloud recurring subscription and support revenue for 2022
Inclusion Criteria
Vendors must, among other requirements:
- Support core functionality of financial planning software as defined in market definition
- Deploy software solutions as a cloud service (on-premises-only solutions excluded)
- Actively market and sell cloud solutions on stand-alone basis without bundling requirements
- At least 50% of customers have annual revenue above $50 million
- Minimum 250 live customers as of December 31, 2022
- Active sales and marketing with live customers beyond vendor's home region
- Cloud recurring subscription and support revenue of at least $25 million between January 1 - December 31, 2022
Ability to Execute — Relative Weighting
- Product or Service - High
- Overall Viability - Medium
- Sales Execution/Pricing - Medium
- Market Responsiveness/Record - High
- Marketing Execution - Low
- Customer Experience - High
- Operations - Low
Completeness of Vision — Relative Weighting
- Market Understanding - High
- Marketing Strategy - Low
- Sales Strategy - Low
- Offering (Product) Strategy - High
- Business Model - Medium
- Vertical/Industry Strategy - Medium
- Innovation - High
- Geographic Strategy - High
FAQs
Q: What does this research cover?
A: This Magic Quadrant evaluates 15 vendors in the financial planning software market based on their ability to execute and completeness of vision. It analyzes vendor capabilities in planning, budgeting, forecasting, modeling, performance reporting, data integration, workflow automation, AI/ML predictive analytics, and collaboration features. The research covers cloud-based solutions that serve organizations with annual revenue above $50 million and includes vendor positioning, strengths, cautions, and market trends.
Q: Who should use this research?
A: FP&A leaders and their staff responsible for driving improvements in financial planning processes should use this research as part of their market evaluation. It helps assess vendors best-suited to meet organizational needs based on use cases, implementation strategies, differentiating features, global support requirements, and pricing models. The research should be used in combination with the Critical Capabilities for Financial Planning Software for comprehensive vendor selection.
Q: What are the mandatory features of vendors included in this market?
A: Vendors must support end-to-end management of enterprisewide financial planning, budget and forecasting processes with flexible end-user-driven modeling capabilities, customizable planning dimensions and consolidations at the enterprise and business functional level. They must also provide administration functionality necessary to support planning activities, including the creation and prepopulation of new planning cycles, modification of business rule logic, dimension maintenance and security profile functionality.
Q: What are some reasons for not being included in this report?
A:
- Offering only on-premises solutions without cloud deployment
- Requiring bundling with other ERP modules, accounting systems, or BPO service contracts
- Serving primarily small organizations (less than 50% of customers with revenue above $50 million)
- Having fewer than 250 live customers
- Limited geographic presence (only in home region)
- Insufficient revenue scale (less than $25 million in cloud recurring subscription revenue)
- Not supporting core financial planning software functionality as defined by Gartner
- Product capabilities not generally available as of June 30, 2023
Q: What differentiates Ability to Execute vs. Completeness of Vision?
A: Ability to Execute evaluates vendors' current capabilities including product quality, customer experience, market responsiveness, and operational effectiveness - essentially how well they deliver and support their solutions today. Completeness of Vision assesses vendors' strategic direction and future potential, including their market understanding, product strategy, innovation investments, and ability to anticipate future customer needs - essentially their roadmap and vision for where the market is heading.
Reference
- Gartner, Magic Quadrant for Financial Planning Software, 5 December 2023, ID G00784792
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