Islands in the OneStream - making accountants smile in a not-so-pretty finance apps world

CPM/EPM (Corporate/Enterprise Performance Management) vendor OneStream held its user conference last week, once again as an in-person event, taking place in San Antonio. As a result, there were breakfast tacos, abundant barbeque and Dr Pepper everywhere. On that alone, I’d give it a score of 10 out of 10.

OneStream Software is a relatively young firm (founded in 2010) in a market that’s been around about four decades. And, even though budgeting and consolidation solutions have existed for some time, many of the show attendees told me they only recently left spreadsheet solutions or antiquated CPM solutions (that were being supplemented by hundreds of spreadsheets) to go with OneStream.

OneStream took a significant equity investment from KKR in 2019. OneStream grew from 300 customers in May 2019 to over 950 today. Likewise, employee count has grown from around 300 in May 2019 to around 1,100 today.

The company showed a huge panoramic slide of net-new logos over the last four years. OneStream has definitely bagged a number of large, brand-name companies as new customers.

The product offering has also grown and now reflects that of a large CPM/EPM suite. Specifically, the company offers:

• • Financial consolidation
  • Planning and budgeting
  • Lease accounting
  • Statutory reporting
  • Management reporting
  • Cash forecasting
  • Profitability
  • Long-range planning
  • Account reconciliation
  • Tax provisions
  • Operational planning
  • And more

OneStream software also supports use of very large data sets. The product line supports a Snowflake capability for those customers using big data in their forecasting and other applications. I listened to one customer that was using Snowflake with the new OneStream Machine Learning  (ML) capability (see below). A couple of others also were using or were planning to use Snowflake, too. Snowflake, while not blatantly marketed at the event was noticeable in several presentation slides. This is notable as many on-premises customer data centers and RDMS tools may not be able to support large scale data sets or be able to parse them without adversely affecting system performance.

I briefly covered OneStream’s new ML capabilities in this diginomica piece in 2021.

Product direction

Where many vendors are long on vision and short on delivering against it, OneStream was, in my opinion, quite understated about its future plans. Most breakouts were full of near-term product enhancements or helpful implementation and usage information. There were sessions on moving from older, competitor’s products to tips and tricks for getting more out of the OneStream apps.

OneStream did put together one great joint OneStream/customer presentation re: their new Machine Learning capabilities. The customer was Polaris, the outdoor vehicle maker, and they are using new OneStream products to better predict demand for their various outdoor products.

What made this presentation really work for so many in the audience is that Polaris and OneStream explained how a ML application works and removed the black box knowledge barrier that other vendors hide behind. I saw all kinds of accountants (i.e., the largest segment of attendees) photographing slides that explained different kinds of planning algorithms, test results between actual and algorithmic expected values and more. They discussed the different libraries to choose modelling templates from and showed how they ran several years of actual data against approximately 65 different models to find the best two performing models. They also quantified the kinds and magnitude of savings that were possible both financially and operationally.

That talk was a very digestible, entertaining and highly educational session that wiped away the mystery behind ML. I only wish other vendors had seen this and would make this a hallmark of their events and sales presentations.

Well played, OneStream.

OneStream Splash – conference mood

The OneStream Splash event was a love-in. I tried - and failed - to find any dissatisfied customers or frustrated partner firms. Instead, I found accountant after accountant who, when asked about their decision to go with OneStream, always let out a big sigh of relief and told me some scary spreadsheet or consolidation nightmare that they don’t have to relive anymore.  The sentiment I believe these customers were expressing was a mixture of relief and great satisfaction, two values I don’t hear much of from software buyers.

In these event anecdotes, I learned just how many customers of OneStream have many diverse business units, operate across several country boundaries, have made (and will make more) acquisitions, and were drowning in low-value added work whose outputs were often too late for Operational leaders to get practical use out of it. They fixed that world. And, the whole time they were relating these stories to me, they were grinning. Their work world has been improved. Any technology that can make an accountant smile must be a winner.

It's not a pretty finance apps world out there

But underneath all of that product satisfaction, these same customers also talked about how behind their firms are in:

• Upgrading or implementing a new/modern/more-powerful ERP software
• Getting all of their apps, including ERP, into the cloud
• Reworking their chart of accounts to be more responsive to new ESG, cost accounting, IoT and other new business realities

Those comments are quite notable as they suggest that:

• Finance Transformation initiatives are not complete (by any stretch of the imagination) and won’t be for some time
• Service firms will be busy for a long time to come with CORRECTLY implementing new ERP/Financial apps (and not just ‘modernizing the ERP technical platform’).

It’s also important to note that firms are still struggling to operate as real-time entities as their data takes too long to get aggregated, integrated, translated, analyzed, reported, etc. Worse, the volume of data coming into organizations is growing exponentially while Finance, IT and Operational groups are trying to solve small parts of the problems via incremental, derivative efforts. They’re not transforming.

New data, new tools (like the ML solution described above) are in the market now but software buyers must have the courage to adopt these products in spite of their newness and the challenge they represent to old methods, processes, timetables and business processes. Anything less is a capitulation to one’s more nimble and daring competitors.

ESG and OneStream

I sat in on another good session at OneStream Splash. This one had a mix of thought leadership and product announcements from OneStream and a (accounting/consulting firm) PwC practice leader on ESG (environmental, social & governance) functionality and requirements.  The PwC component was excellent and set up OneStream’s speakers and product wonderfully.

ESG, and in particular sustainability, is to 2022 what multi-tenancy was to cloud software in 2007. It’s hot and will likely remain an important component of new ERP and CPM/EPM software selections for many years to come.

OneStream showed their new reporting tool for ESG. It’s actually a multi-faceted and detailed tool that’s designed to replace the mostly manual and annual process many firms complete via spreadsheets. For an initial offering, it looked good.

But, it won’t be the final word on ESG as OneStream’s customers will have a lot of work to do to their old ERP, operational and other systems to incorporate better, more granular, more timely and informed data into these tools. I’ve already experienced this firsthand with a major client and will be writing more on the subject for diginomica. I’m even considering a book on the space, as well.

What’s next?

Earlier in this report, I listed some of OneStream’s main products. These solutions fill out a wide CPM/EPM suite. I’ve already discussed their entrance into ML-powered planning tools and new capabilities for ESG reporting.

So, where will OneStream go next? I didn’t get any official visibility into this but the consensus opinion of others I spoke with indicated that OneStream would do well to expand into process automation and process mining (a la Celonis). These can be adjacent markets that OneStream could cross-sell into and increase its CLV (Customer Lifetime Value).  I don’t really see them going into traditional financial applications (e.g., Accounts Payable) unless they are to offer fully configured RPA (Robotic Process Automation) solutions. RPA and process mining are great white spaces that possess lots of unrealized business value creating opportunities.

It's also conceivable that OneStream will continue to expand its ML skills and capabilities to turbocharge a variety of financial tasks, forecasts, decision recommendations and more.

The ERP and EPM/CPM spaces used to collide somewhat in the budgeting and financial consolidation areas but now are heavily competing with each other for Office of the CFO dominance. This effectively doubles the competition in this critical back-office space and should trigger a tremendous amount of new innovation, especially in the use of advanced technologies, for the back office. Customers will be the big beneficiaries of this surge in innovation.

My take

This was my first time to attend Splash. Splash is about customers/prospects first and partner firms second. It’s not really for analysts or press, so I’m grateful just for the access to the sessions and customers.

I stated at the top that CPM/EPM was an older tech space and many, many customers prefaced their introductions by mentioning what older CPM solution they just ‘retired/replaced’. Old, on-premises CPM tools were mentioned by half (or so) of customers as getting the boot. Some newer solutions were also getting switched out but I couldn’t get any intelligence on what was driving those decisions. Maybe next time I will.

I mentioned this was a love-in and I stand by that characterization. Of course, with a show full of accountants, the appreciative responses are going to be muted, the applause respectable, etc. This isn’t a crowd that tweets every speaker’s words and slides (in fact, almost no accountant does!) Just know that these folks liked the products.  And that, I suppose, is the bottom line.