Finance teams are becoming more and more conscious of the need to engage business colleagues in Financial Planning and Analysis (FP&A). But there's often a gap between the metrics the finance team is tracking and those that matter to the business, to the extent that some business functions have turned to their own tools to track budgets and plans. Yesterday, Financial Performance Management (FPM) vendor Planful took a step towards bridging one of those divides, announcing its acquisition of marketing performance management vendor Plannuh.
In a briefing ahead of the news, Rowan Tonkin, CMO of Planful, told me about the rationale for the move. Marketers want to be able to course-correct their campaign and activity spending in real-time, but the data coming out of finance based on supplier invoicing comes to them weeks too late. Tonkin explains:
Plannuh the application has the ability to connect into a lot of the common platforms where marketers spend — Google, AdWords, Facebook, LinkedIn and other connected applications, content syndication platforms, media syndication platforms. As we're spending, I know that I'm spending money today that I'm not going to see in my outgoings until maybe another 40 days from now, depending on when your accounting closes. With this application, I can see that today or tomorrow. I know much how much I spent on a daily basis, and I can adjust.
Without a tool like Plannuh, many marketing teams rely on spreadsheets and other workarounds to track their day-to-day spend, but this rarely gives them the insight to continuously optimize activities and drive higher ROI. Nor can they provide their finance teams with accurate spend, accruals, and results data. Bringing detailed marketing data into Planful's ambit plays to the company's strengths, Tonkin believes:
What we do is, we're really good at financial processes, financial intelligence, bringing financial IQ to the business. This is just another department that we believe we can go out and help in a really unique way.
Connecting marketing to finance
Launched in 2019. Plannuh has established a growing global customer base. Its employees will join the Planful team, while the Plannuh application is to be merged into the Planful platform. Terms of the acquisition have not been disclosed. In a prepared statement, Plannuh's founder and CEO, Peter Mahoney, who joins Planful as General Manager, Marketing Performance Management (MPM) Solutions, said:
I created Plannuh because I saw a need for agile planning and budgeting tools that address the unique requirements of marketers, while connecting those marketing concepts to financial outcomes. We have spent the past few years creating a system that delivers best-in-class marketing performance that can be communicated in the language of the business. Planful is the natural partner to connect our approach to broader financial planning and analysis processes, further solidifying the strong relationships our customers have developed with their counterparts in the Office of the CFO.
One of the reasons why marketing performance management has developed separately is that most finance products were built before much of today's marketing spend existed, and can't accommodate the granularity that the marketing function needs. Tonkin explains:
No one in their right mind in accounting wants to have the level of cost centers that a marketing department actually wants. So there's all these ongoing negotiations between finance and marketing, to say, 'Oh, we want to track this, we want to track that.' And they're like, 'I don't want to build all that in my general ledger.'
So you end up with marketing then going off and planning the way that they want to plan, because they have to. That's how they're being managed by their executive team, their peers. They need to know what campaigns are working. You can't run a marketing department unless you know that you have that insight.
Tonkin and Planful's CEO Grant Halloran both have a background in Marketing Resource Management (MRM), which is the broad category into which Plannuh fits. But Tonkin argues that bringing it into a financial tool like Planful is a way of bringing finance expertise that marketing teams can draw on. He says:
Now that conversation for the marketer is, 'This company, Planful, is a finance solution ... a provider of tool for CFOs. So now coming with an offering that's unique to marketing, allows marketing to have a much easier conversation with the CFO.
Extending finance expertise to the business
Many Planful customers are already extending the use of Planful into other areas, such as trade promotion planning, sales and operations planning, or detailed SKU-level planning. But while that's all been built on Planful's dynamic planning platform, there's a partiuclar appeal in having a purpose-built solution like Plannuh that can be deployed quickly and already includes the native connectors to data sources. Tonkin says Planful will look at whether the dynamic platform is enough for these other use cases, or whether adding more solutions makes sense. He adds:
Financial planning is different to sales planning is different to marketing planning is different to operational planning. As we go and look at that, it's like, what can we do with our core platform? And then what does best-of-breed planning look like? That's where we will go and explore some of that. We have one of the best workforce planning solutions on the market right now. And now we believe we have one of the best marketing planning solutions on the market right now. And so adding to that stack over time would surely be a smart thing for us to do.
The acquisition feeds into Planful's wider goal of giving finance teams the tools to provide their expertise to colleagues across the business. Tonkin says:
No graduate ever went to college and got their finance degree and their MBA, to get stuck doing variance analysis ... They've always wanted to partner on these new opportunities, on these theses of how do we grow the business? How do we manage the business? How do we look at different scenarios? ...
There are a lot of CFOs, a lot of businesses out there, trying to catch up, trying to get to that Nirvana that we've always talked about, where it's all about the business partnership, all about the advisory, all about working on the fun things that you learn at MBA school, but you don't actually get to do if you're stuck doing variance analysis, and you're stuck just working in the spreadsheets.
But it's not just a matter of getting the right tools in place. Finance teams also need to make sure their business colleagues know they're now available to offer more strategic advice. Tonkin explains:
It's sometimes not natural for a finance person to be the outgoing person that walks over and says, 'Hi, you know, I'm Fred from finance. Rowan, I'd love to help you on the next ROI project that you're looking at.' Or, 'Let's do some pricing optimization' or 'Let's work on marketing mix modelling together.' ...
The technology is just going to do what technology does. It will sit there, and in theory will work amazingly well. But no one on the business end will come and participate with that technology, because they're just unaware of the value that it can come and create. The finance people need to be much more proactive ... They've been stuck doing the low value menial tasks. Once they've unlocked from that, they then need to realise, 'Oh, I need to go and shift the attitudes in the business, because the business aren't just going to wake up one day and go, 'Oh, I didn't realize finance were finally more strategic.' You've actually got to go and tell the business ...
If you can go and do that and send that message to the business, businesses want to be helped. I'm not going to not say no to a very smart, high-intellect, high financial IQ person to help me with finance optimization or marketing mix modelling or whatever it might be. I'm going to accept that help. Every time.
More finance teams saved from spreadsheet hell.