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Planful Perform 2024 - customers kick tires on AI, but will financial planning break down the decision silos?

Jon Reed Profile picture for user jreed May 17, 2024
Summary:
Planful Perform is in the books. But the show left us with potent questions on the need for finance transformation, where customers get stuck - and where AI fits in. Here are some pitfalls and successes - along with my underrated news stories of the show.

Planful CEO Grant Halloran at Planful Perform 2024
(CEO Grant Halloran at Planful Perform)

Planful Perform 2024 is in the books - and once again I am wading through a stream of news and interviews. Beyond the expected AI advancements, Planful had no shortage of news announcements: 

The second release announced a Snowflake connector for data integration, and a Power BI connector for dashboarding (the latter was popular news amongst customers I talked to, who are eager for more dashboarding options with Planful data). 

Forecasting down to the SKU level - why finance collaboration matters

The further I get into the spring event circuit, the more I am struck by the underrated news stories. Yes, there is Planful AI - new generative AI capabilities for finance, along with the prior Planful Predict solutions. I have no shortage of opinions on that topic, but that's not what jumped out at me. I am looking for real world impact, in whatever flavor it appears - as in this standout keynote quote from Planful customer Chosen Foods

We forecast all of our revenue in Planful - all the way down to retailer, by store, by SKU velocity.

Call me a finance geek if you want, but that kind of planning granularity impresses me more than the AI demos I've seen on the keynote stage this spring. But have other Planful customers achieved that same result? Time to find out. 

Then there is the issue of finance collaboration - and how to pull it off. Pulling away from spreadsheet addiction is one thing - the bigger job is getting other lines of business to own their numbers, and step into that conversation. Or, if you are daunted by the collaboration challenge, you can just stick with a conventional "send in your annual budget" mentality, and try to convince yourself that your organization is agile enough for what lies ahead. 

Sparking a team collaboration around numbers is high stakes for Planful. Planful may call itself a Financial Performance Management platform, but for Planful to reach its ambitions, it needs bigtime buy-in from HR and Marketing leaders, inside its customers' planning teams. So is collaboration a reality for Planful customers? And if so, how did they pull that off? On the keynote stage, Jim Mancuso, CFO and COO of Chosen Foods shared this: 

Initially, we built that out in conjunction with the sales organization. But the finance organization really owns putting that into Planful. In 2024, we're turning that over to sales, and they're going to be entering that information. We've done a lot of user testing after we've done a lot of education... We've worked out the bugs to make sure, with them, that it's going to be a good experience. We've also done that on the trade side. Our accounting partners are now using Planful as well, whether it's a review of the trial balance, review of the financials prior to publishing. So we're really bringing it through; our next step will also be the HR people/culture partners on the workforce planning side.

Can finance be a strategic business partner? 

Planful's Chief Customer Officer Kimberly Simms asked Mancuso: "Are you seeing any sort of behavioral or cultural changes by getting that financial IQ up across organizations?" He responded: 

What I would say is initially, finance has always been looked at as people who were trying to maybe hold back all the information. We weren't always brought in early on projects, because maybe margin wasn't there. Or: they didn't really want to know what margin was, they wanted to just sell the product. 

What's changed in the organization is finance is truly a strategic business partner, not just a financial one. So we're being brought in very early on projects, whether that's aligning on products that might not have the right margin, but how do we maybe come together with scenario planning on that, or understanding what is the art of the possible - and how can we go beyond with what we're doing here? So we really come in early in the process, which has led to really great outcomes - outcomes that might have been clear on the face of the project, and we came out better because of that really good collaboration, and working together with the teams.

AI fits into a vision of a more automated/strategic approach to finance. But now, I think we're getting a better handle on what we need to have in place that AI can't do - or can't fix. That's what I saw at Perform 2024: customers in pursuit of a better finance process, with an open-but-cautious mind on how AI could help them (and, I must say, some wariness about whether they want AI touching their numbers, or whether AI can 'understand' the shifting terrain of their business well enough to do its thing). 

Interest in AI was contingent upon process relevance. When I asked customers about their favorite piece of conference news, the most popular answers were mostly unexpected, like enhancements to Planful's Workforce Planning. Consider this Workforce Planning comment from my interview with customer Luke Metzger, Financial Systems and Reporting Manager at Workiva:

It's been live on our workforce: new templates, a new way of adding new employees; we've built an attrition model to  streamline some things, and a new hire model. So having that accuracy has been pretty awesome.

Underrated news - Planful releases its financial planning maturity model

Another underrated news story? Maturity models! Yes, for those who chase metaverses and blockchains, maturity models are about as sexy as A/B testing, but if you're interested in project success, maturity models are a factor. A couple years ago, I tormented software vendors with Attention vendors - please stop the customer success hype train, unless you have these six proof points. I picked six difficult customer success milestones most vendors can't stomach. Number five is: Where is your publicly-shared benefits maturity model? As I wrote: 

Most of the advanced benefits of SaaS software are not achieved at go-live; they require a concerted effort by customers, vendors and partners to achieve. I sometimes call this a "fierce act of will" - it does not just happen.

Well, Planful checked off that box, with their Perform 24 announcement of their own maturity model. Planful's maturity model is framed around automation -> collaboration -> innovation. But of course, you can be mature in one area, and not-so-mature in another. So their model has specifics across functions. Here is a broad sample from the keynote: 

Planful Perform - finance maturity model
(Planful Perform - financial planning maturity model sample)

Against this type of model, every customer will have areas to improve. Planful can improve upon this also; ultimately, I believe these maturity models need to be baked into software, and perhaps accessed by a conversational AI that points towards areas of process improvement against peer benchmarks. Snark alert: that should keep "customer success" teams busy for a while! 

But I was struck by Halloran's keynote comment that if customers get stuck, it's around collaboration. During our analyst Q/A with the Planful leadership team, I asked him about that: "Where do customers fall down in collaboration, and what do they need to do differently?" Halloran explained: 

It's a mindset problem... Some are more advanced. Newer companies that are still scaling, they can establish that culture early on. So what we do is we encourage people to really think of themselves as stewards. You're a custodian or a steward of a process in your company. Financial Performance Management is a universal capability that we need to create across your whole company - all corners of the company need to be doing it.

I asked Simms a similar question. She says that when customers struggle, there is often a culture issue around data ownership. Every customer is different, but: 

Some want to hold data to themselves, and they don't want to bring in people from the outside. Others are: 'Yes, I can be more efficient.' And you just have to figure out: where is this customer coming from? What's their mindset in terms of letting go of control, if you will, a little bit. Jim [from Chosen Foods] is on the other side, very excited and open to getting scale by bringing his counterparts in, which I think is great.

Halloran says the challenge for Planful is showing what's possible on that other side. That became a big goal of the Perform 2024 keynote, which will be available for virtual replay shortly. Halloran believes the lightbulbs go off when HR leaders can drill into workforce compensation lines, and see monthly variants on a granular level. The same is true on the marketing side: 

Marketing controls so much money, and the returns on that money is super important. It's just another version of financial performance. 

With 40% of Planful's customers at the enterprise level, these numbers add up - as do the potential savings. But on the downside, as companies get more complex, the resistance to change gets more complex also. But if some customers are struggling with collaborative finance, others are moving ahead. When I spoke with Matthew Zabinski, Production Manager at the Center For Internet Security, his story nailed my underrated themes of the show: granular planning and team collaboration. I asked him about the Chosen Foods example of granular planning with SKUs. Jokingly, Zabinski said that they could now track and plan on the level of pencils (in reality, they can drill into the project level, and are planning to go deeper). As he told me: 

What we're doing today, we never could have done in Excel from this level of granularity... But what it's also done for our organization, in my opinion, has been knocking down silos between departments. What I mean by that is: we're able to set organizational objectives and goals, and a lot of them are shared between multiple departments, and we're planning around it. 

So the teams need to work together; they need to collaborate with each other to be successful. When we have a planning meeting, budget forecast, or variance analysis meeting, we're pulling in multiple team members from across the organization from different departments. And again, they're working together on that.

My take - AI in finance means matching accuracy to use case

There is more to say about Perform 2024 - in particular about AI. Overall, the customers I spoke with are still in the AI tire kicking phase. Planful AI demos showed how finance teams could ask questions to the AI, in context of their planning functions. I taped a podcast with diginomica contributor Brian Sommer that gets into Planful's AI approach in more depth; I'd add that link this weekend. Update: podcast is up: Planful Perform ’24 Review - impact of AI on finance and customer priorities.

Vendors are mostly saying the right things about AI. Therefore, we will be forced to assess them by the effectiveness of their adopted products. To that end, I did miss one customer session with a Planful Predict customer who was further along in their AI pursuits. I'll catch that on replay, but one area where Planful stood out from what I've seen this year is explainability. Most vendors are doing a half-assed job of paying lip service to AI explainability, mostly making excuses about how challenging it currently is. Planful's demo, on the other hand, showed good examples of how Planful AI discloses their finance answers (I'll add a sample slide of that to this piece shortly). Though Planful is mostly addressing explainability outside of external LLMs, which are notorious black boxes, I still liked what I saw. The rest is a story for another time. 

Halloran set the right keynote tone by acknowledging the hallucination tendencies of consumer LLMs won't fly in finance. And he points out that accuracy is a matter of AI use cases. A finance team might be pretty happy with 80 percent accuracy on predictive AI functions, but no less than perfect accuracy will be accepted for quarterly numbers etc. If Planful gears their AI delivery around those considerations, that will help them earn the trust needed for wider AI adoption. For now, the Perform announcement of a free month of Planful Predict should help customers assess those paid, add-on solutions more broadly, even while Planful's generative AI solutions previewed at Perform are not officially priced yet. 

In the days to come, I'll review the customer interviews and post another Perform roundup on how finance is changing, and where the obstacles to change lie.

Addendum by Brian Sommer, May 24, 2024: 

Jon captured a lot regarding last week’s Planful User Conference (Perform 2024). I’m not going to repeat what he’s covered but I’d add the following comments:

  • Planful is partnering with Trintech (a long-time partner of Planful) to offer Trintech’s ADRA reconciliation functionality to the Planful product suite. Trintech also partners with Workday. ADRA is one of several products from Trintech. Their website defines it as “Built for mid-sized organizations, Adra automates your most important financial close tasks – so you can simplify your processes and close faster with confidence.”
  • Planful stated that 90% of their customers use the Workforce Management product. That high subscription rate illustrates how critical workforce planning is to getting accurate plans/forecasts/budgets.
  • Planful’s AI tool can look for signals within a customer’s data. It can also suggest values to be input into planning models/forecasts/etc. These capabilities will roll out incrementally with users getting their first taste of them later this year.
  • Planful reported strong YoY growth.
  • While I didn’t get to see this functionality, Planful’s low/no-code tools were getting discussion time at the show.

I would like to give Jon credit for his 2021 piece on Planful. In that article he gave us some information about Planful’s Predict/Predict Signals. Planful has been working on certain AI capabilities, like anomaly detection, since 2021. And, in the intervening years, Planful has continued to work on AI capabilities with more to be rolled out later this year.

My last observation concerns the evolution these customers appear to be following. Several of the customers I spoke with openly acknowledged that prior to Planful, their financial planning/etc. processes were a kludge of paper and spreadsheets. The elimination of paper and many spreadsheets was clearly a targeted benefit of moving to Planful. While that first step was a boon for making planning processes more timely, accurate and efficient, it is/was not the full end game. Longer term, customers are looking at AI to generate potential data entries for them, suggest commentary regarding variances and anomalies in the data, develop detailed commentary for briefing books and much more. In other words, the next evolutionary step is to turn former spreadsheet jocks into arbiters of truth and providers of insights to the board based on their knowledge of the business (not on how to construct a spreadsheet).

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