One Size Fits All? How to Find the Right BARC Score Segment for Your Shortlist
BARC analysts Christian Fuchs and Nina Lorenz offer up some advice on how to use BARC Score in your financial performance management and integrated planning & analytics software selection projects.
New providers with new solutions are constantly entering the software market: the market for business intelligence software contains several hundred providers worldwide and the number is growing daily. In addition, many providers have multiple products in their portfolios. It is therefore very difficult to maintain a current overview and to compare potential solutions when searching for a new BI Tool. The stakes are high and wrong decisions often have serious consequences. By narrowing down the market at the beginning of the process, you avoid having to check numerous solutions against all your criteria. In other words, you create a longlist. We suggest using BARC Score as a starting point for a structured selection process.
In the first blog of this series, we laid out the meaning of the different segments within our BARC Scores, from ‘Entrants’ to ‘Dominators’. And in the following posts, we previewed the 2021 editions of BARC Score IP&A and BARC Score FPM In this blog, you will learn how to use BARC Score to create a shortlist that suits your needs.
Know your requirements
An important thought to keep in mind when assessing BARC Scores is that all providers considered in a BARC Score have their individual strengths as well as challenges. A “one-size-fits-all” interpretation of the BARC Score graphs (i.e., concluding that providers appearing higher up or further to the right are generally better than providers further down on the left) should not be made.
When making your decision, bear in mind that bigger is not always better – supposedly “big” providers are not necessarily superior to their “smaller” competitors in all aspects. The sheer size or reputation of a provider should not be a decision criterion, however understandable the concern for investment security and the fact that “smaller” providers are more likely to go bankrupt or could be taken over much sooner and more easily. Instead, the overall package of technical and functional support related to one’s own individual requirements at a reasonable price-performance ratio are key.
Your recipe for success therefore is a software selection based on your individual requirements. A robust requirements catalog will give you all the ammunition you need. Make sure you conduct a thorough functional, technical and organizational requirements analysis that accounts for all future users of the tool. Including business departments as well as IT in the process increases acceptance of the solution from the get-go.
Once you have collected and weighted your list of criteria, the evaluation of potential IP&A solutions or FPM tools begins.
What you need for a longlist
Here is the good news: The goal of the BARC Score evaluation methodology is to provide an overview of the software market and to classify the portfolios of individual vendors and their positioning in the market. BARC Scores can therefore serve as a longlist (and thus an initial market delimitation) in software selection projects. Be aware, however, that there are far more vendors and beneficial solutions in the marketplace than we can possibly evaluate in our BARC Scores.
For your own software selection project, of course, it is also important to consider whether the market segment examined in a BARC Score matches your requirements. For example, BARC Score IP&A and BARC Score FPM should not be confused, as they assess different markets and topics.
Use your requirements catalog to investigate which software segment is the best fit. Narrowing down the functional areas your future software must cover is a simple way of assessing the market at this point. After all, no software is suitable for every conceivable scenario. Are you looking for extensive corporate planning capabilities, budgeting, simulations, forecasts and business intelligence all integrated in one single product? And when honestly assessing these criteria, can you say that your employees would truly work with the full scope of the functionality on offer? If yes, perhaps the ‘Market Leaders’ segment is right for you. Otherwise, you may be interested in the ‘Challengers’ or ‘Specialists’ segments, where you will find more specialized vendors and products focused on specific use cases.
How to generate your shortlist
Once you have identified a longlist and the right segment, you can begin eliminating providers from this list based on your individual knockout criteria. The BARC Score product descriptions, which include strengths and weaknesses, are perfectly suitable for this task. The detailed insights into the solutions and feedback from analysts and customers are a trusted source of knowledge. Identify the solutions that best meet your knockout criteria based on the breadth of evaluation criteria in the BARC Score report.
After this elimination process, you will be left with your shortlist – a compilation of three to five tools that could be considered suitable for your business. This brings you one step closer to the finish line. The final screening step is the detail evaluation. Here, you put the solutions through their paces with regard to all relevant requirements and costs. This creates investment security and minimizes the risk of making the wrong decision.
The aim of a detailed evaluation is to obtain as accurate a picture as possible of the software’s performance. Test installations, structured vendor presentations and prototypes (“proof of concept”) are suitable for this purpose. Ideally, they will be based on tasks and data that correspond as realistically as possible to the intended area of application in the company.
Et voilà, you have performed a structured selection process. After reviewing each potential candidate, you are well set to make an informed decision.
Need Additional Help?
If you prefer to see the IP&A and FPM tools in action, join us at our free annual Digital Finance & Controlling online event on April 20th and 21st, 2021. Ask our expert analysts and listen in on conversations about the FPM market.
For further support in your selection process, do not hesitate to contact the experts at BARC.
Other posts in this series
Part 1: How BARC Scores Help Companies to Assess and Classify Business Software Markets
Part 2: A Sneak Peek at the 2021 BARC Score Integrated Planning & Analytics (IP&A)
Part 3: Sneak Preview: The 2021 BARC Score Financial Performance Management (FPM)
Part 4: One Size Fits All? How to Find the Right BARC Score Segment for Your Shortlist (this post)