As we discussed in our blogs announcing Host Analytics’ appearance on both Magic Quadrants and the blog highlighting their recognition as a “leader” among Financial Close applications, Gartner has continued to refine their inclusion criteria and definitions for this segment to reflect the new demands that companies are putting on software providers to design broader and more feature rich cloud applications.
Magic Quadrant for Cloud Financial Planning and Analysis Applications
Officially announcing the change in October 2017, Gartner said that it was moving away from the phrase “Corporate Performance Management” and into more focused, straightforward terms like financial close and financial planning and analysis. In this, they retailored their Magic Quadrant Reports as well, changing their FCPM report to the Financial Close Magic Quadrant and the SCPM report to the Financial Planning and Analysis Magic Quadrant, the latter of these we will be discussing below.
From the 2017 to the 2018 report, Gartner has made some modifications to the criteria in which vendors are judged, splitting reconciliations and close management into two functional pillars and adding management reporting to the FP&A Report. As with the 2017 reports and the financial close Magic Quadrant, Gartner has opted to focus only on cloud applications for midsized, large, and global companies.
The Move to the Cloud
Since 2016, Gartner has only focused on cloud applications, which according to the firm fall into one of the following three categories:
- Cloud-only vendors with cloud solutions that have, from the outset, been architected wholly or largely as cloud services.
- Traditional on-premises vendors with new “built for the cloud” solutions.
- Traditional on-premises vendors that have made their solutions available as a cloud service.
Defining a Financial Planning and Analysis Solution
As mentioned above, Gartner retailored its definitions away to represent a shift in the market, and vendors are now considered on the following criteria:
- Financial budgeting and planning: The financial budgeting process sets short-term targets for revenue, expenditure and cash generation, usually with a one-year horizon. It typically uses financial classifications found in the general ledger to classify financial goals and targets. Traditional office-of-finance-oriented planning and forecasting processes consist of a financial modeling engine, with integrated profit-and-loss balance sheet and cash-flow forecasting. These capabilities support the creation, review and approval of financially focused plans and forecasts, as well as their associated workflows. These capabilities should also maintain an audit trail of all associated activities.
- Integrated financial planning: This area joins the financial planning components of other business domains, such as workforce and sales, with those of corporate finance. More-innovative initiatives can also be used to meet organization-wide requirements in specific areas, thereby improving overall performance management needs.
- Financial forecasting and modeling: Capabilities in this area are enabled through corporate planning and modeling and “point” solutions that provide best-practice capabilities, especially for the more-flexible, end-user-driven corporate planning and modeling initiatives.
- Management and performance reporting: Performance reporting takes management reporting to a new level of inclusion and ease of use. Its collaboration capabilities transform traditional management accounting reports into “performance playbooks” that take a more inclusive approach to explaining results. Performance reporting incorporates operational results, financial results and enhanced narratives (narrative reporting).
As always, the Magic Quadrant is built on a vendor’s completeness of vision and ability to execute, with vendors categorized into one of four categories—Leaders, Visionaries, Niche Players and Contenders.
Host Analytics Once again a Leader
Since the shift to the cloud was recognized by Gartner, Host Analytics has found itself among the leaders—no matter what the report was called. Once again, in addition to its leader status on Financial Close, the company has made a strong showing on the FP&A Magic Quadrant as well, due to its market understanding, number of cloud customers and experience as a cloud-only vendor. The vendor achieved an above-average score in most survey satisfaction ratings.
Reference customers for Host Analytics reported that their top-three product selection criteria, in order, were ease of use, price and solution flexibility.
We invite you to learn more about the entire Magic Quadrant here, and learn more about how this leader can help you do more with your money by downloading our guide to enterprise performance management here.