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			Business Research: Business, ERP, Finance Imperative Research: Cost Management, Performance Improvement, Process Improvement, Profitability Management Vendor Research: Adaptive Planning, Alight, Applix, Approva, Axentis, Business Objects, Cartesis, Centage, Certus, Clarity Systems, Coda, Cognos, FRx Software, Hyperion, Infor – Extensity/Systems Union, KCI Computing, Lawson, Longview Solutions, Microsoft, Oracle, OutlookSoft, PROPHIX, SAP
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Summary
Alight Planning is a planning and budgeting application – with emphasis on the former – designed expressly for midsize companies (those with 100 to 1,000 employees). Our research consistently finds a plurality of those we survey at midsize companies reporting their organizations spend too little time in planning and budgeting; in contrast, a majority of those we survey at very large companies (those with 10,000 employees or more) say their companies spend too much time doing the same thing. Ventana Research believes one reason midsize companies tend to stint on planning is that they rely on desktop spreadsheets and e-mail as the supporting technologies for their processes. Desktop spreadsheets are valuable personal productivity tools, but they are not efficient at managing repetitive, collaborative enterprise processes such as planning and budgeting. Midsize companies that want to use planning as a key management tool should consider Alight to help facilitate the process.

Assessment
Most companies spend too much time budgeting and not enough time planning. While people use the two words interchangeably, they are in fact different. Planning is a process that defines a set of coordinated actions aimed at achieving specific objectives; budgeting is a process that develops the means of fiscal control to match outlays to expenditures. Plans are about things, while budgets are about money. Both are important to a company’s success, but we find people focus mainly on the latter in a process we call “budgetingandplanning.” In this mixed bag, people do a lot of planning in their heads or in other ways that are not captured in documents and shared with others. Assumptions are implicit, not explicit, and what one person assumes about the direction of the business may not line up with what others think. We believe one important reason for this is they use desktop spreadsheets to manage the process. Our research shows that midsize companies are more likely than larger ones to use spreadsheets and, therefore, are more apt to resort to budgetingandplanning.

Alight is a relatively new company that has years of planning and budgeting savvy behind it; its founder also started Pillar, one of the earliest budgeting applications, later acquired by Hyperion. Alight Planning is a dedicated planning and budgeting tool designed for midsize companies. It enables executives to model their businesses and to see how different assumptions about future actions will affect financial performance. The software’s capabilities make modeling, planning and replanning far more productive than is the case using an ordinary spreadsheet. Users can create individual line items for revenues, expenses, liabilities, equity and assets, all of which they can roll up into financial statements. Alight’s built-in unit/rate/amount structure makes it easy to keep assumptions about “things” separate from the assumptions about prices, costs and exchange rates. This, in turn, makes it easier to enable executives to see the impact of specific planning and budgeting assumptions in a consistent fashion. It even offers algorithms that analyze data so users can spot the most important factors driving results, eliminating the need to do laborious iterations of spreadsheet models to achieve the same end.

The software automates goal-seeking operations, such as which factors have to change to reach a specific operating profit margin. This makes planning and budgeting a useful business tool, not simply an administrative control. Its basic unit/rate/amount structure links dollar values and activities, making it possible for line managers to plan in their terms, such as how many units of what they will sell, how many people in what position they will need, how many sales calls the sales reps will have to make and so on. Line managers can then translate this information into a budget. Because it uses a central database, Alight eliminates the difficulties associated with spreadsheet budgeting, such as consolidating multiple plans from different managers. It is also far more flexible: To see the impact of the new factory opening in July instead of May, a user can quickly shift all of the associated revenue, expense, asset and liability accounts by two months.

Planning is a fundamental part of performance management. Companies need to determine their key business drivers and to develop planning and performance reviews around them. Alight incorporates a Key Measures pane within the application’s window that keeps these metrics front and center. The software also offers features for revenue, expense and head count planning. Reporting is easy but the charting and graphing available is not as extensive as in some other packages.

Market Impact
The planning and budgeting market remains immature and fragmented. Our research finds that only one in five midsize companies uses a dedicated application; most of the rest use desktop spreadsheets. Adoption of dedicated software remains low for several reasons, in our judgment. The standard budgetingandplanning approach has been the norm for decades because it was too difficult to do anything else in paper-based systems. Until recently, its cost put dedicated planning applications beyond the reach of most midsize companies. Today midsize companies have several options. Vendors whose software is aimed at smaller companies in this part of the market include Adaptive Planning, Microsoft’s FRx and Prophix, while those targeting larger companies include Business Objects/SRC, Clarity and OutlookSoft. Alight’s robust planning capabilities distinguish it from the pack. By differentiating itself as a planning – and not just a budgeting – application, Alight should appeal to companies that believe more effective planning is an important way to improve competitiveness.

Recommendation
Ventana Research believes midsize companies must do more planning. Companies that engage in planning as a discipline will find they can identify ways to cut costs, shorten decision cycles and increase their ability to adapt to changing conditions. Small businesses can manage with informal systems, but organizations that pass a certain threshold – 100 employees, in our judgment – must become more formal. For midsize companies, it is imperative that such formal systems be efficient at managing and producing useful results. We strongly recommend that companies eliminate “budgetingandplanning” and the use of spreadsheets for these processes. We also recommend they look into Alight as the replacement.