When it comes to building out your finance tech stack, you need to find the balance between integrating the right solutions while not overcomplicating processes with too much software. To find your company’s perfect harmony of tools, you have to deeply understand the fundamentals of your business model and know which levers you have control over.
One of the most common questions we get asked at Abacum is what’s the difference between a business intelligence tool and an FP&A software. If you’re looking to build out your strategic finance function and are shopping for the perfect lineup of tech, you have come to the right place.
In this article, we’ll be diving deep into the key differentiators between a BI tool and FP&A software to show how these two platforms can work together or independently to create a strategic finance powerhouse to support your company’s overall growth.
What is a BI tool?
BI tools encompass a broad term that essentially refers to any software that provides simple insights, dashboards, and visualizations without writing code. This basic tool allows organizations to observe and consume business trends or insights quickly and easily. However, while they may offer great point-and-click dashboards and visuals that can be shared with the entire company, they lack the forecasting capabilities that are vital to any finance function. Plus, they are often designed for the data team, not the finance team. This means that questions go unanswered and new data sources become a ticket parked in the backlog.
Examples: Looker, Tableau, Metabase, Google Analytics, Redshift, Sisense
What is Abacum?
Abacum is a strategic finance solution that integrates with an organization’s entire tech stack (ERP, HRIS, CSM, data warehouse), creating a single source of truth for your operational planning needs. Finance teams can conduct their monthly, quarterly, and yearly workflows in a fraction of the time it would typically take them. By offering useful collaboration features, finance teams are now able to collaborate over metrics, communicate with other stakeholders within the organization, and support strategic decision-making like never before.
Why do I need Abacum?
Don’t know if Abacum is right for you? Here are a few of the key features that separate us from a BI Tool.
Forecast operational & financial metrics
BI tools are great for simple analysis (point and click exploration) but are restrictive when it comes time to dive deeper into the data – meaning that dip in your metrics goes unexplored. Abacum combines both self-serve workflows and the depth of insights required for ad-hoc analysis and data forecasting (revenue, metrics, sales capacity, or headcount), going far beyond the capacity of current BI tools.
Collaborate with stakeholders
While business intelligence tools do a great job at creating dashboards, they lack the critical flexibility and collaboration features that drive strategic decision-making. Abacum was built with a collaboration-first approach offering permission management and the communication features that drive the important decisions with the direct engagement of budget owners or non-finance users.
Implement in 4 weeks, not 4 months
BI tools require big operational and organizational lifts to deploy. Once deployed, it can be a significant time investment for finance teams to start working with a new dataset. This slow implementation period blocks hyper-growth companies from scaling. Abacum’s implementation process is the fastest in the industry (<4 weeks), with dedicated access to our support team (FP&A and Data) and over 100+ supported integrations to make sure your team is up and running in no time.
Analyze quickly and with autonomy
A lot of the analytical work required to answer business questions translates to another request for your data team to build a new dashboard, answer support questions, or download CSVs to work in spreadsheets.
Solving a problem in Abacum vs. a BI tool
Acme Inc. is looking to understand how their latest revenue line (Product Awesome) is contributing to the company’s goal of ARR. They were using a BI dashboard for reporting the number of new customers by geographical segments, and contract terms of this new product. Fast forward a couple months later and after a successful lunch, the growth rate attracts the attention of the leadership team. Who asks “what would happen if we change our GTM strategy and how we bundle products to maximize our revenue given the current success of Product Awesome?” You understand the task at hand, roll up your sleeves and get ready to start analyzing.
First, you would have to download all of the historical data from your BI tool. Their interface, and capabilities will not be able to support this project. So after a couple of CSV downloads and cleaning the data in spreadsheets, you are ready to get started. You plot the historical revenues and contract duration for Product Awesome which has generated $1.5m in ARR over the last three months. You are quick to observe how most of the revenue has been coming from the North American market.
Next, you want to understand what sets the North American market apart when compared to the other geographical segments. To answer this question, you need access to CRM data to understand the conversion rate of Product Awesome across the different markets. This has you once again downloading multiple CSV files. Sales data clean, and you unmask the reason for the North American growth: not enough sales executive capacity in the other markets to position and pitch Product Awesome.
Lastly, you adjust your sales capacity model which lives in a different spreadsheet to gauge revenue impact if the business decides to increase the number of sales executives across certain key markets. Now you’re prepared, you export your key findings into a PDF and share the results ahead of the meeting to pre-brief key stakeholders.
See how all this back and forth can be a real pain for finance teams? Instead of bouncing back between the different data systems, users can pull the information they need directly into Abacum and conduct the same exact analysis as the scenario above. Less work, less time spent on manual tasks, and more time for strategic value-added analysis. It’s really that simple.
Saving time & improving efficiency through Abacum
Abacum consolidates data from over 150 proprietary platforms, serving as a centralized platform for all operational and financial metrics. Users can quickly build dashboards, create forecasts, compare budgets vs. actuals, and ignite collaboration between the finance team and budget owners in just a few clicks.
Instead of spending days consolidating data from a number of different softwares, excel sheets, and independent data sources, finance teams can now access all the metrics they need directly in Abacum. This enables FP&A analysts and strategic finance professionals to assess their data, collaborate with key stakeholders, and have a discussion around their forecasting and budgeting initiatives. Not only does this provide visibility to other departments, but it also empowers the finance team to become strategic partners for the organization.
What does that mean for your team?
If you already have a BI tool, don’t fret. Abacum works alongside your BI tool to extend its current capabilities and features while also integrating with the rest of your tech stack. With our strategic financial solution, your team will be able to forecast across scenarios or data dimensions and create insights that drive collaborative actions to unlock business growth.
Don’t have a BI tool but are looking to accelerate your hyper-growth through data automation, modeling flexibility, and the collaboration that drives actions? Abacum partners will help your team get off the ground and build a robust tech infrastructure whenever you’re ready.
If you’re looking to level up your tech software with a scalable strategic finance solution, Abacum is your answer. To learn more about our product and how we can support your team’s hyper-growth, request a demo today.
