Congratulations. Like many Finance leaders lately, you’ve made the decision to finally move your corporate performance management (CPM) processes forward with a new software solution. Reaching this critical decision is certainly a milestone. But at the same time, you must also prepare for what comes next – creating and managing an effective evaluation process. For many organizations, especially first-time buyers of CPM software, getting the due diligence process right is critical for selecting the right solution.
With so many Finance teams now rethinking their planning and financial close processes, we wanted to share our 5-step guide to conducting an effective CPM software evaluation.
Step 1: Document Your Needs with Specificity
Documenting your specific needs is the single most important task in the whole evaluation. One common error I’ve seen is that well-meaning folks define their existing processes rather than defining what’s required to achieve their desired state. Here’s a few tips to consider:
Step 2: Keep the Size of Your Selection Team Manageable
Be smart about who is part of the selection team. Including everyone in Finance who interacts with the system can make the selection team too large and dilute the process.
Instead, keep the selection team as lean as possible while still involving the key stakeholders. Involve IT early as well to avoid surprises. With IT’s input up front, you can also ensure your evaluation doesn’t come to a grinding halt because the chosen solution doesn’t meet fundamental IT standards and guidelines.
Step 3: Develop and Memorialize Your Selection Criteria
Selection teams at many organizations struggle to remember each vendor’s demonstration. You can avoid those struggles by making sure you’ve defined the selection criteria and a clear process. Then ensure you have a crisp method for each stakeholder to capture personal impressions and notes. Here are a few suggestions:
Step 4: Get Under the Hood on the Technology
Kicking the tires of the technical foundations on CPM solutions is critical. Why? Because this is your moment to get under the hood and ensure the future investment is right for your organization. Here are just a few key considerations when evaluating multiple CPM solutions:
A Word on Third-Party and Integrated CPM Software
While some organizations are attracted to a “best-of-breed” strategy for CPM (see Figure 1), relying on third-party or “integrated” products means that you’ll inevitably run into conflicting upgrade schedules. How do you spot when you’re running into trouble?
Pay close attention when the vendor talks about a “compatibility matrix” to make sense of “what” version of “which” software has cross-compatibility. As part of your diligence process, pay close attention to the upgrade process. Understand the timing, potential black-out periods and costs, both in dollars and human capital. And importantly, ensure those “minor details” don’t make it impossible to get the business value your organization requires from a new CPM investment.
Step 5: Check References to Ensure 100% Success
Ultimately, the success of your new CPM solution is determined by your implementation and reliability – not the initial demo. As a Finance leader, you can best predict success by speaking with customer references to get a first-hand account of their experiences.
Ideally, ask each vendor to provide a complete list of customers and let you choose which to call. Don’t let the vendor “cherry pick” the reference list. Best practice is to provide key criteria related to the industry, business requirements or underlying ERP system compatibility that you’d like to learn about. Then have the vendors identify customers on their list that meet those criteria.
Call all of those customers and ask the tough questions. Then call several other customers on the list that weren’t identified by the vendor. Being thorough helps ensure you get a complete picture of what you can expect.
CPM solutions are no longer a nice to have for mid-sized to large organizations – these solutions are required to help Finance teams drive performance and lead at speed. Click here to learn about some real-world success stories and contact OneStream if you are ready to take the leap from spreadsheets or legacy CPM solutions.