2020 has brought new perspective to the importance of business performance management – especially as it relates to business-critical transformation. As such, some enterprises are seeking new tools for more intelligent strategizing and decision making across traditionally siloed parts of the business. One example of these solutions is Anaplan.
Anaplan has been around since 2006 and provides a business performance management and data analysis platform to help enterprise customers strategize and orchestrate critical business initiatives. The vendor offers category-specific solutions for finance, sales, marketing, workforce and supply chains – areas where data is plentiful and enterprises need stronger departmental transparency.
Per Anaplan’s Q2 2020 earnings release, revenues grew 46% year over year. This growth is indicative of the need to make business more efficient. Anaplan has successfully expanded upon the capabilities of legacy incumbents such as Oracle’s Hyperion, where the lowest cost alternative (and largest competitor) is the Excel spreadsheet. Workday’s Adaptive Planning offering is another solution competing for market share alongside Anaplan.
As with Workday and Oracle, it’s not always easy to determine which Anaplan subscription (license) is best for your enterprise. Overbuying is common among customers and so is overspending. In this post, we talk about ways to avoid both.
How to Right-Size Your Anaplan Business Performance Management Solution Purchase
Upon engaging with Anaplan, for both new and current customers the vendor continuously performs internal analysis to understand the customer’s needs in order to develop use cases specific to the above-mentioned departments. This analysis provides Anaplan with the data to create customizable solutions built upon three core license editions: Basic, Professional, and Enterprise – a stepwise progression where each edition offers an increase of available workspace (modeling capabilities) and higher price points. The customer workspace/license requirements are calculated by Anaplan’s analysis to determine number of use-cases and financial modeling needs.
Worth noting are the integration costs and time-to-value for Anaplan implementations. Anaplan integrations can be cumbersome and are often performed by third-party integrators. In addition to ensuring you’re paying a fair price (equal to or better than market) for Anaplan licenses, it’s important to perform the same price benchmark analysis on integrator costs. As for contractual duration, some customers may benefit from a multi-year agreement versus a single year commitment to allow for successful adoption and alleviate upfront costs. Anaplan isn’t a solution you just turn on. Adoption takes time but is high-value as more users come on board.
Anaplan Professional or Enterprise? Choosing the Right License Type is Key
The Professional license is a sufficient start for most customers with user counts under 75. In addition to the core Professional license with 4GB of workspace, Anaplan offers, and charges for, ancillary products such as Hypercare (support), Optimizer (business planning insights), and Hyperconnect (Informatica’s Extract Transform & Load tool). Anaplan strives to upsell additional workspace and introduce the more expensive Enterprise licenses as usage is expanded and user counts reach 100+. The Enterprise license bundles these products at limited capacities and includes 10GBs of available workspace.
In NPI’s experience, the Professional license is the best choice for most customers to start with when purchasing for the first time. It’s not uncommon for customers to upgrade to Enterprise as adoption increases and usage grows, but failure to right-size your purchase upfront sacrifices valuable headroom for savings.
Recent executive turnover has turned heads as current leadership focuses to improve sales execution with a move toward standardization of product offerings. That change has impacted product licensing and pricing to a degree. Some of NPI’s recent observations include separate workspace costs that are now driven by license type, products priced as percentages of net, and varying price points driven by customer requirements. We are also seeing increasing spend in the data driven planning and performance software space.
Final Thoughts on Anaplan Price Negotiation
Finally, a word about pricing – Anaplan’s guidelines around how licenses can be discounted are largely dependent on customer-specific use cases and requirements. They will vary widely based on volume and ancillary product spend, as well as potential for footprint expansion. In the absence of clear discounting, understanding which levers to pull during price negotiations is key to securing a best-in-class deal.
If you’re considering a new business performance management purchase with Anaplan, or renewing an existing agreement, let us know. NPI can help you determine which license fits your unique business requirements, validate pricing is at or better than best-in-market, and identify which levers to pull during negotiations.
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