Ventana Research Analyst Perspectives

insightsoftware provides applications for finance departments and other business users in midsize and larger organizations, offering a broad range of functions including analysis, internal and regulatory reporting, planning, consolidation, tax provision and treasury. The software brings together applications that enable business users to maximize data collected in existing systems and streamline the performance of a range of office of finance functions, all while limiting or eliminating the involvement of IT professionals.

• Financial planning, budgeting and analysis to support a more predictive finance department. Organizations can shorten planning cycles with advanced techniques such as driver-based planning and rolling forecasts that bring together operational and financial data to support integrated business planning.
• Financial reporting software that shortens reporting cycles, increases staff productivity and promotes timely and accurate information for executives and managers by integrating with existing enterprise systems. The end result is more time for analysts to analyze.
• Financial consolidation and close management to expedite the record to report cycle, achieve greater efficiency and shorten the accounting close.
• Tax provision software to promote accuracy and visibility in the process as well as potentially shorten the accounting close.
• Disclosure management that handles the creation of complex composite documents created, edited and approved by a disparate group of individuals. This is especially beneficial for regulatory filings and other structured reports where accuracy and consistency are essential.
• Treasury functions such as equity management and administration.

The company’s software portfolio also concentrates on business intelligence and analytic applications designed to facilitate the use of these tool by those in finance and business roles, not just IT professionals. This includes the recent acquisition of Logi Analytics, which adds embedded BI and analytics. As my colleague David Menninger points out, embedding analytics and business intelligence enables organizations to quickly interpret data and convert it into actionable insights, extracting information in real time to address a broad assortment of business issues. Embedding analytics helps tackle the issue of extracting information from data, which is a time-consuming process, especially since organizations are increasingly adding more data sources and information systems which, in turn, introduce more complexity.

insightsoftware addresses several longstanding issues. One is that the scope of the analysis performed by finance departments hasn’t changed much. Our Office of Finance Benchmark Research found that only 34% of organizations regularly perform customer profitability analysis, 30% measure product profitability and only 24% utilize predictive analytics. That will change in the 2020s, mainly as a result of easier access to data and the use of artificial intelligence for analytics. Data analysis of one sort or another has long been a core competency of finance departments, applied to balance sheets, income statements or cash flow statements. Today, however, finance must go beyond these basics by expanding the scope of the data being examined to include all financial and operational information that can yield actionable insights.

A second issue is that, in the face of a very uncertain future, organizations have discovered the value of rapid planning and budgeting cycles. As events unfold, it significantly changes expectations for the future on a daily or weekly basis. However, even when the world returns to a steadier state, businesses will benefit from making planning and budgeting processes faster, easier and more relevant, strategic, agile and accurate. We live in an age where outcomes in business may be uncertain, but they are not unpredictable.

A third concern is the difficulty of managing corporate income taxes. Tax codes are often complex. Tax accounting as well as the data required for tax provisions and tax compliance are distinct from statutory accounting, creating significant workloads for the tax department. The provision for income tax expense and, for public companies, the assembly of information for tax-related disclosures, can be a factor holding up the completion of the accounting close.

The need for tax provision software has grown over the past decade as statutory accounting and tax authority reporting requirements became more demanding. Tax authorities require greater tax transparency, especially from multinational organizations. In response, corporate boards and senior executives expect greater visibility into tax provision to oversee the process more closely and plan more effectively to minimize tax expense and exposure while mitigating tax risks. This is especially true for publicly held companies. Ventana Research asserts that by 2026, one-half of organizations with even moderately complex legal structures will use dedicated tax provision software to streamline the close and reduce risk.

Ventana Research consistently finds that analysts in finance and line-of-business roles struggle with the process of wrangling data for analysis. Our Analytics and Data Benchmark Research shows that data preparation and data quality assurance are more time-consuming than actually completing the analysis. To maximize automated data connectivity that substantially reduces analyst workloads and speeds up the delivery of actionable analytics, insightsoftware provides connectors to a wide range of enterprise resource planning and financial management systems, including those from Oracle, Microsoft and SAP.

The market segments that insightsoftware competes in are highly competitive, with many vendors offering the same features and functionality. Demand in these areas has been high for the past three years as the need to support hybrid and remote working environments pushed finance and accounting departments to replace stand-alone spreadsheets with dedicated applications. Software is better able to coordinate processes under these conditions because of managed workflows and the reduced need for unproductive work. Fewer checks and reconciliations are required when data quality is well controlled. Moreover, the need to attract and retain finance and accounting talent has led to the use of applications to cut time spent on dull, repetitive tasks.

A growing market for digital business systems has been a tailwind for vendors. Assembling a portfolio of multiple software vendors’ product can provide greater development funding – especially for shared technology resources. Marketing and sales teams also benefit from a broader set of products to sell to a targeted market. insightsoftware will need to invest in achieving a more consistent look and feel, and some of the overlapping functionality begs rationalization. And because AI-enabled capabilities will be an increasingly important source of differentiation, the company will need to successfully invest in developing these tools to remain competitive.

I recommend that finance and accounting executives actively investigate ways to use software to improve their performance and to serve as a more strategic, forward-looking partner to the rest of their organization. As part of that effort, I recommend that they investigate what insightsoftware has to offer.

Regards,

Robert Kugel