An Affordable Escape From Spreadsheet Hell

Budget, plan and forecast: The mere utterance of this phrase can turn many managers' blood cold. The typical spreadsheet-based process is tedious and creates hidden errors. Unfortunately, escaping spreadsheet hell has always required tens of thousands of dollars in software, plus maintenance staff — unrealistic for small and midsized businesses. Adaptive Planning, a recently launched application service provider (ASP), offers collaborative budgeting, planning, forecasting, financial consolidation and rudimentary reports. Its services are designed and priced with midsized businesses in mind, although the company plans eventually to add features specifically for large enterprises.

Adaptive Planning positions itself as a performance management application, but until its services include — at a minimum — operational planning, report formatting and charting, and support for monitoring (with scorecarding and dashboarding), it won't quite live up to that categorization. Nomenclature aside, if you've been budgeting, planning and forecasting using spreadsheets, Adaptive Planning is an affordable way to make your job less time consuming, more manageable and less error-prone.

To put Adaptive Planning to the test, I signed on as an administrator to define accounts, plans, models, assumptions and user permissions, and then create reports using sample data. Because I couldn't create a realistic experience of going through a full initial setup, I also interviewed several Adaptive Planning customers.

The application helps you import your chart of accounts from your general ledger (G/L), but you'll have to convert your existing models and formulas from Excel to Adaptive Planning formulas manually. The Formula Assistant (see the screenshot below) is easy to understand if you're a proficient Excel user. Customers say the company goes out of its way to make implementations successful by helping them create these formulas, as well as G/L import mappings. In addition, Web-based classes for users are free on an ad hoc basis. Essentially, Adaptive Planning has been providing professional services at no extra charge. This above-and-beyond service ethic is perhaps a function of the company's youth (it signed its first customer in September 2004). Working closely with early adopter customers spurs the company's product development efforts while also building a base of reference customers. (In other words, don't depend on this level of service indefinitely.) Typical initial setup time now is about five to 10 days.

The interface design is smart — clean, spare and easy to comprehend and navigate. The company needs to iron out some minor bugs, such as the interface or session sometimes breaking when used in non-Microsoft browsers or when a user accidentally hits the "Enter" key instead of clicking a button. Although most of the user interface design is sensible, the method of drilling down on reports is strange and annoying: After drilling down, you can't go back to your previous level by simply navigating backward; you have to continue to move forward through a (modifiable) "drill order" to get back to where you were.

Adaptive Planning's performance latency is annoying but not crippling. One customer reported that the company has improved performance in this regard. Richard Dellinger, co-founder and VP of product development confirmed that his team optimized the performance of certain functions when customers used them more heavily than Adaptive Planning had anticipated. Realistically, though, you should be prepared to suffer some performance lag when using any ASP.

The users we interviewed are happy overall, and not just because the application is better than using spreadsheets. "We sat through the demos from Oracle, PeopleSoft and so on, and they're very pretty ... but they're very complicated," says Michael Gonzales, the director of financial planning and analysis for American Healthways, a disease management company. Because American Healthways wants to involve nonfinancial employees in its planning process, ease of use was an important requirement.

Adaptive Planning's biggest strength is the way it lets you create and manage models. For Nsite, a business process automation ASP, one benefit of switching from Excel to Adaptive Planning was the increased specificity — therefore accuracy — it could attain in its models. "We incent our sales force based on their bookings. But we have to recognize the revenue over 12 months, pro rata. And then, most of our customers are invoiced annually, some quarterly, some monthly," says Nsite controller Kelly Nicholas. "With Adaptive Planning, I can enter [more detailed] assumptions for [more accurate] cash flow forecasting."

Nicholas also likes that the application protects the integrity of her models. In Excel, she says, "If you come back a month later to change assumptions, [the plan] tends to break. I don't have that fear when using Adaptive Planning." Unlike in other applications, assumptions are reusable and globally accessible instead of code written separately into each cell.

Adaptive Planning fills a niche that's long been empty. And because John Dillon, former CEO of Salesforce.com, is an active advisor, it's not a bad long-term bet for companies that want some assurance the vendor will stick around.

• Adaptive Planning requires a minimum one-year contract; cancellation may be made in the first 30 days. Pricing is $90 per seat per month for users with administrative access. Lower access levels are $60 and $30.

Jeanette Burriesci is the senior editor of Intelligent Enterprise.