When buying software and other information technology, mid-size corporations face challenges that are often very different from Global 2000 corporations on the one hand, and small businesses on the other. They do not have the resources of large organizations, yet they have requirements that in many cases are as sophisticated. Software designed specifically for these size companies often have substantial total cost/performance advantages over applications created for large corporations or small business. Ventana Research strongly recommends mid-size companies adopt dedicated budgeting and planning software to improve corporate performance. We advise companies to evaluate FRx Forecaster because its capabilities, technical requirements and price are well suited to mid-size company needs.

Assessment

Mid-market companies need a way to budget and plan more effectively. To do that, they have to encourage broad participation in the process, greater collaboration and deeper knowledge sharing. The key to achieving all three is making the budgeting process more efficient. Rather than devoting time to tedious mechanical aspects of assembling a budget and managing the process, mid-size companies must spend more time thinking about and analyzing plans and actuals to improve performance. Moreover, the cost of buying, implementing and maintaining the system must be in line with a mid-sized company's budget. FRx Forecaster is an application that is well suited to the needs of mid-size companies.

The software is designed to make it easy for mid-size companies to deploy and employ it. It offers a web interface, which means employees can access the system easily and no software has to be installed. Forecaster automates how individual elements of the chart of accounts are rolled up, making set-ups and changes to budget elements much easier. Those managing the process can keep tabs on whose budgets have been submitted (and accepted), and who has only just started or not started at all.

FRx Forecaster is designed to give companies a great deal of flexibility in how companies can plan and budget, even within and between business units and departments, depending on what makes good business sense. Incorporating salary and benefit budgets into a plan can be tedious with traditional budgeting methods. Forecaster makes importing data into the system straightforward, and easily handles cost allocations, taxes, benefits, mid-period salary increases, consultant fees and so forth. A key reason for adopting dedicated budgeting software is automating the aggregation of the budget submissions and being able to create a consolidated view that ties back to how accounting actuals are reported.

Dedicated budgeting and planning applications such as Forecaster enhance the value of the process itself. A couple of benefits of dedicated software include involving as many people as necessary in the process because of the Web interface and because so many of the repetitive aspects of budgeting have been automated by the software. We have found that this, in turn, improves the accuracy of the budget and creates a sense of ownership and buy-in. Budget systems that make it easy to collect and consolidate data make it easier to re-plan and re-budget frequently. This improves accuracy and allows a company to respond in a more coordinated fashion when changes occur in the economic or competitive environment. By simplifying the process of analyzing actuals versus plan and facilitating report generation, companies are able to focus on what has been driving their results and are therefore better able to make decisions that improve their performance.

Market Impact

The market for budgeting and planning applications is highly fragmented today and still in its formative stage. We expect demand for dedicated applications will increase over the next several years as more companies discover the overwhelming benefits of using this software over traditional methods. Yet we expect fragmentation will continue as mid-size companies have numerous choices today and may have a difficult time differentiating vendors' claims. Ultimately, we expect FRx will have a leadership position because of the product's capabilities, the popularity of FRx as a reporting and analytical tool in the market, as well as its being part of the Microsoft Business Solutions family.

Recommendation

Ventana Research advises mid-size companies to adopt dedicated budgeting and planning software as a way to achieve better performance and to consider FRx Forecaster. We believe that most mid-size companies can justify the cost of this type of system in terms of the time saved compared to traditional spreadsheet-based systems. We also think companies that fully leverage the capabilities of dedicated budgeting and planning software will find it also improves the overall performance of their company.