Bayer reached dynamic decision-making and you can too with less budget

Anaplan has released a Customer Case Study to describe how Bayer uses its planning platform to achieve great results.

We can pick out interesting items from this Anaplan marketing asset to better understand the FP&A challenges experienced by global giants like Bayer.

To begin, Bayer probably does not need any introduction to most. It is one of the world’s largest enterprises, with a market cap of around $56B (as of this writing). That’s B for Billion. If you have ever taken Aleve, that’s Bayer.

‍Fortune has Bayer ranked as #227 on the Global 500 list. With $48B in annual revenue and around 100,000 global employees, that sounds about right.

Anaplan’s Use Case for Bayer states:

"The Corporate Controlling team at Bayer used to spend days building static forecasts and reports for board-level planning conferences."

A good marketing case study always has a before and after to demonstrate the value of the product’s adoption. Anaplan includes this description of the value provided:

"Now they have a set of models, built on Anaplan, that aggregate divisional and functional planning data, calculate group KPIs, present outcomes in attractive and useful formats, and enable scenario modeling. With Anaplan, decision-making at Bayer is agile and confident in the face of changing business conditions."

If you read Anaplan’s latest 10-K released on March 23rd, 2022, there is no secret that its goal is to drive massive recurring revenue contracts with the world’s largest enterprises like Bayer.

They released impressive industry-leading financial results as highlighted in this 10-K:

• Their top 25 clients spend a staggering average of $5M annually
• 29% of their entire client base spends over $250,000 annually‍

This is the annual subscription investment. However, your cost of ownership will not stop there. You will also need a professional implementation which can easily be 1x to 4x the annual licensing value (typical range for corporate software installations of this category) and ongoing support from Anaplan Certified Consultants.

Do you have ambitions of becoming an Anaplan Certified Solution Architect yourself? It will require ‘technical competence’ as described on this certification requirements page. If you Google Anaplan Certified Solution Architect, you may run into job openings offering as much as $170,000 for this skillset. If you dream big, you can take the next level certification and become a Certified Master Anaplanner.

From evaluating Bayer’s Annual Report, they don’t break out the IT spend line item. An average annual IT spend for large enterprises with over $2B in annual revenue across industries is around 3% of revenue. Here is one study that backs that figure.

Let's run the numbers. 3% of $48 billion would give us an annual IT budget of $1.44B.

Even if the Anaplan service subscription was $1M + per year and it required multiple full-time certified resources to maintain it, those are immaterial costs for an operation of Bayer’s size. Anaplan is a proven platform, and the value is there for an operation like Bayer.

‍What if you’re not a $48B revenue company with an IT budget over $1B? 

‍How many organizations face similar issues as Bayer (even on a smaller scale)? A finance or controlling team spending days building static forecasts manually? That probably sounds familiar to many CFOs and their teams. A finance team in need of better dynamic decision-making. You don’t need to be Bayer’s size to share this same objective.

For most CFOs, spending an average of $250,000 per year on licenses alone is not a conversation starter.

‍FinLogic.io was created as an enterprise-grade FP&A solution to offer an alternative path to the traditional and globally recognized solutions that have existed for decades, like Anaplan.

FinLogic.io can manage any of  Anaplan’s largest clients in terms of data size, number of entities, and number of users without any issue. Anaplan has many features that FinLogic.io does not. Companies like Bayer need those features. A million other CFOs at smaller scale operations can find more value with an alternative next generation FP&A solution like FinLogic.io. On the other hand, a platform loaded with enterprise features from fifteen years of development can make things more difficult to train and manage. We know there’s always a trade-off there. A platform loaded with features is more complex to manage and may require certified technical consultants to maintain.

When it comes to enterprise performance, FinLogic.io was designed to scale to any data, process, and user size imaginable. How can FinLogic.io possibly deploy a database with the same power as a $10B category leader?

Two simple ways - The first is the advancement in cloud database technology from 2006, when Anaplan was first released, to today. The second is today's best practice of partnering with a world-class database vendor instead of developing a proprietary database. While FP&A software vendors felt the need to develop their own proprietary database in previous generations, that is not a best practice in 2022. Instead, today business software vendors can focus on the business layer and use proven and enterprise components such as databases and data center services from a third party.

For example, the database vendor supporting FinLogic.io is a $20B company. Yes, twice the size of Anaplan’s market cap as of this writing. The challenge with developing every component in-house, including the database, is that this R&D cost has to be passed down to clients in the form of higher licensing and services.

Think of a home builder who designs and manufactures their own appliances from the ground up only to be used for the homes they build. It’s the principle of economies of scale. It would be very challenging to build the world’s most powerful database when the purpose of that database is to support a single business application offered by one vendor. If that vendor somehow manages to create the world’s most powerful database, they should scrap the business application altogether and become a pure-play database vendor.  The revenues and market cap of a database leader far surpasses that of an FP&A software only vendor.

FinLogic.io focused on building the house and installed world-class appliances already available in the marketplace. The result is a great performance at lower costs. An approach possible in 2022 but not feasible in 2006 when those components did not exist. They had to be built.

If you remember 2006, that’s the same year Amazon AWS was first born. In technology terms, that’s a very long time. Cloud database technology has come a long way since then. However, that does not diminish the sophistication of Anaplan’s approach to designing their own database at that time. In 2006, Anaplan's launch represented incredible product innovation and provided great value to finance teams at enterprise-level companies. Anaplan continues to be an amazing option for those few global companies who can afford to purchase, deploy and maintain this platform. Anaplan is a premier offering within the financial planning software category. It's not just the database, the proven market track record, the overall platform, the size of their R&D, services and consulting teams, and partner ecosystem, to name a few accolades, that warrant a higher price tag.

Today’s modern cloud databases did not exist in 2006. We are confident that with Anaplan’s significant R&A budget, their proprietary database has continued to improve. If you’re a global giant with access to that level of budget, Anaplan has proven it can solve the most complex problems, including for Bayer. Per their latest annual report, Anaplan has acquired 1,900 clients in over 15 years of operation. This number is low because they’re an enterprise vendor focused on acquiring fewer and higher-spend clients.

What about the million other smaller companies that also require high performance from their FP&A tool? FinLogic.io was created to offer value for these companies. Performance at a significantly lower total cost of ownership.

Do you manage multiple currencies? FinLogic has a client managing over 30 currencies without a glitch. Do you manage multiple entities? With FinLogic.io, the largest organizations in the world can load up all their entities without any performance issues.

Do you want the same platform to manage your financial planning and accounting automation, including account reconciliation, financial consolidation, and closing the books?

FinLogic.io is a robust platform that manages your finance and accounting processes. Anaplan markets itself as the connected planning platform, and you will not find an accounting use case listed under solutions on their website.

If you spend $250,000/year with Anaplan, you will still need to budget separately for an accounting automation solution. The price tag keeps going up. Again, if you’re Bayer and your annual IT budget is over $1B, that’s not an issue.

What is the database performance offered by FinLogic.io?

FinLogic.io has partnered with arguably the most powerful cloud database for business applications in the world. This database can process millions of data points in real-time. This database was designed to manage data volumes far in excess of anything experienced by any corporate finance and accounting team anywhere. This database was designed to support the world’s largest e-commerce and mobile apps catering to hundreds of thousands or even millions of consumers who generate billions of data points on a frequent basis. Using this database for FP&A use cases is similar to installing a rocket engine on a motorcycle. FinLogic.io selected this over-performing database for FP&A use cases to never worry about data performance and scalability. At least it's a better product strategy than going with an underperforming database?

If you have an Anaplan level budget and need alternatives, other enterprise platforms you can evaluate around that ownership cost would include OneStream, IBM, and Oracle. These platforms all have experience supporting the world’s largest enterprises with their FP&A challenges.

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