A financial automation platform is one of the soundest investments you can make if you want to save time and headache when it comes to FP&A. There are essentially two flavors of automation platforms: those that seek to replace Excel or Google Sheets, and those that integrate directly with Excel or Google Sheets.
Read on to see which is right for you and your business.
Effective financial automation platforms tie together data from various financial systems you use to run your business in order to create one source of truth: namely your accounting software, your HRIS system, and importantly, your forward looking projections. Then they layer on ways to keep your data in sync across systems, ways to visualize and drill-in to data on-demand, and ways to track versus forecast, among others.
It’s relatively straightforward to work with accounting systems and HRIS, you log in to those systems and allow them to share data with the platform. However, there are two very different paths to consuming your forward looking financials. One method requires the user to rebuild their business model inside of a bespoke cloud-hosted spreadsheet. The other method talks to your existing spreadsheet-based business model in its current state in Excel.
The tools here, among them Mosaic, Jirav, and Basis, replace Excel or Google Sheets as your business planning tool. Businesses choose these platforms when they want to assign specific business model assumptions and drivers to certain non-finance employees. Those individuals can then directly modify their assigned assumptions in the model as the business environment changes.
The challenges to this approach largely come down to time and cost. To begin with, you need to re-architect your business model inside a new and unfamiliar tool which inherently lacks the full breadth of formulas, layouts, and display capabilities that Excel has. This means incurring a number of weeks to migrate your model and many more months to attain a level of confidence in the new workflow. Undertaking a migration like this is also a Rubicon of sorts – you need to manage your assumptions and model inside that new tool forever. These systems are quite expensive, typically starting in the mid five figures annually.
Let's be honest – replacing all the capabilities of a tool like Excel, which has been elegantly solving business problems for the last forty years, is near impossible. So instead of trying to do so, another group of companies adds new capabilities into Excel directly. OnPlan, Cube, and DataRails allow for data linkages between ERP and spreadsheets, as well as fairly technical automation for deep Excel pros. Because they rely on Excel, the workflow and knowhow to create your underlying spreadsheet model remains intact.
However, these tools also have a relatively steep learning curve for the functionality they add on top of Excel and similarly require weeks to fully onboard. Because of their sophistication, they are a tool for finance and not necessarily the rest of the organization. They are also typically priced in the mid five figures annually.