Fact or fiction: Dispelling the biggest myths about FP&A solutions


Danielle Dahlstrom

Director of Product Marketing, Finance Solutions

When it comes to evaluating software options to improve FP&A processes, finance teams are faced with determining the optimal solution for meeting their needs. Some vendors make claims about others in an attempt to eliminate them from consideration, and we’re here to dispel the myths told about Anaplan.

There are no two ways about it: Buying software to modernize or transform a financial planning and analysis (FP&A) function is a daunting task. There are several software providers using buzzwords and outdated approaches by stressing the importance of tying the planning processes to a consolidation engine. We focus on what finance teams need to drive and grow the business in the future: agility to quickly create scenarios and make pivots on demand; access to information across the organization; and involving the appropriate stakeholders, no matter their function. We’re setting the record straight by busting the biggest myths to help FP&A leaders make the most informed decisions about the technology that is best to help them meet their organizational targets.

Built-in financial intelligence reduces consulting costs and streamlines the planning process

This is a myth. Though it’s seemingly counter-intuitive, built-in financial intelligence is the one feature holding FP&A teams back. Financial intelligence is defined as gathering and understanding financial information in preparation for acting in a way that benefits an organization, individual, or company. Important details include having preset required dimensions for a chart of accounts, legal entity hierarchies to streamline the financial close process, creating integrated financial statements, and helping to report variances.

Although it sounds appealing on paper, the concept of “required dimensions” comes with steep tradeoffs. First, it introduces a scripting process weighing down the IT function. Second, it complicates the creation of formulas. Third, when bound by a set of dimensions and financial intelligence, users cannot seamlessly bring in data from operational systems like CRMs or marketing technology. The right solution can seamlessly combine both financial data sets and operational data sets to drive better and more accurate forecasting. Using Anaplan, it’s possible to get close to both financial and operational data without creating a drain on IT.

Competitors essentially copy Hyperion Planning and Reporting built by Oracle using Microsoft technology hosted either in the Oracle cloud or on the customer’s servers. Because of this, customers are required to either possess the relevant coding skills required for set up and usage (VB.net, for example) or they must organize and pay for third-party contractors to make these connections. In contrast, Anaplan was purpose-built for the business user to set up and allows the use of natural language for formula creation (like A+B=C). Anaplan also grants former spreadsheet users the ability to pull from a vast catalog of similar functions to allow quick adaptation and adoption without reliance on third parties for day-to-day operation and without relying on the coding skills of their own team or those of contractors.

Financial intelligence may be appropriate for accounting, but it forces FP&A into a rigid structure that doesn’t make sense for planning the future of the business. FP&A’s charter is vastly different from accounting in that they try to align the organization to execute on strategy. Being tied to a rigid accounting structure is too limiting to be effective.

Drill-back to source and limited dimensionality are the most efficient methods for investigating variances between forecast and actuals

This is a myth. Be wary of vendors selling their ability to streamline variance analysis by drilling back to transactional source systems or using one common dimension across both actuals and forecast.

First, variance analysis is essential in keeping control of the business when performance negatively deviates from the norm or the forecast. This investigative process help assign context and meaning to the poor performance. Some vendors only rely on drill-back to source to do variance analysis.

Drilling back to source doesn’t give analysts and stakeholders the insight to understand business drivers. This is a critical lost opportunity. Limited dimensionality introduces significant performance considerations whereby any forecast logic coded into an account is going to negatively impact how fast data is moved from multiple sources into one centralized location.

Once business drivers and levers are identified and understood, finance and operations can create plans to optimize for the future. The most efficient method for understanding what was planned versus what happened is to have a platform with unlimited dimensionality and collaboration, bringing the operational teams together so that when plans change, finance can anticipate variances instead of reacting to them.

A marketplace unlocks more potential from FP&A platforms

This is a myth. Many rigid finance applications try to increase user adoption by offering a marketplace of solutions. Vendors aim to convince finance teams that they can extend the capabilities of the platform they’ve already customized to their use case. But buyers quickly realize they’ve purchased nothing more than a template. The templates then require shoehorning the use case and customizations into it. Plus, these templates require coding to update and maintain, meaning more consulting fees. In the long run, the number of changes and customizations necessary to make this add-on software work for the business can become so much work that it serves more like shelfware as modeling continues to live in spreadsheets rather than being moved to the new tool.

To save both time and money, the best decision financial teams can make is buying a solution that allows individually built models for every use case without needing extensive or complicated coding. This creates speed to value and the flexibility to model the platform to match the organization’s nuances, and better ensures that the platform provides the insights necessary to optimize business performance.

Unlimited dimensionality is cumbersome, and only limited dimensionality is necessary

This is a myth! Every planning solution, aside from Anaplan, is built on an OLAP database. This means they come with a pre-defined, finite number of dimensions or ways to define the business. But what happens when a financial team maxes out the number of dimensions available? Yes, it’s back to spreadsheets and, inevitably, a group of spreadsheets and slides serving as a forecasting model while the system acts as a submission and versioning tool.

The Anaplan platform is built on its own patented technology called the “Hyperblock,” which doesn’t limit the number of dimensions. The Hyperblock throws away the concept of “required dimensions.” Instead, finance teams can finally replace the spider web of spreadsheets propping up their forecasting process with self-sufficient financial modeling on a platform intentionally built to scale across the enterprise. Simply put, Anaplan is a software game-changer.


Many, if not all, of these myths create a compelling story for other FP&A software solutions. However, they’re simply untrue. When looking at the reality of the financial planning process and what needs to be done to streamline and simplify it with greater results, it’s clear that Anaplan provides better results with less labor from users.

Don’t buy into solutions promising to change the way your financial team operates, yet relying on outdated architecture and methods. That obsolete approach results in a very high likelihood of the team returning to offline spreadsheets or using only a small part of the software for a narrow use case. For a function as important as FP&A to achieving organizational growth targets, the risk is simply too big to gamble on software other than Anaplan.

Planning is an absolute necessity for the success of any business. It’s no longer a nice-to-have and is, instead, imperative. It should be prioritized accordingly. Anaplan will meet business leaders where they are to help them adopt, modernize, and transform their planning capabilities to accelerate success and stay ahead of competition. Anaplan is the right choice for modernizing your FP&A.

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