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The Anaplan FAQ

January 7, 2019

 

Curious to know about Anaplan?  This 5 minute read gives you the low down on the cloud based planning tool that's quickly cornering the market.

 

What is Anaplan?

Anaplan is a company that develops and maintains a software platform called....Anaplan.  They do one thing, and do it extremely well.

 

How big is Anaplan, the company?

Anaplan listed on the NYSE back in October 2018 and share price rose on that day to a level giving it a market capitalisation of almost $3B.  There are over 950 customers spread over more than 40 countries.  Anaplan themselves have a presence in 14 countries globally, with over 1000 employees and growing.  Pretty impressive given Anaplan's commercial launch was only 8 years ago in 2011.

 

Let's talk about the software...

 

So what does Anaplan do?

Chiefly, the Anaplan software platform helps organisations plan their business, and track progress against that plan. 

 

Imagine you're a company selling widgets; how much profit you make depends on how many widgets you sell, what you sell them for, how much it costs to make the widgets, and how much it costs to sell the widgets.

 

Now when it comes to setting a strategy for the next year, you have plenty of different approaches.  Do you?

  • Sell more widgets to fewer larger customers at a lower margin with a smaller sales force?

  • Increase your sales team to grow your account base and volume?

Anaplan enables you to model out each scenario and test out the impact on your financial results of each one.

 

Can't you do all that in a spreadsheet?

To a point.  The example above is drastically over-simplified.  In real life you may:

  • Have thousands of customers in scores of countries

  • Have thousands of products

  • Operate in multiple companies with different currencies

  • Have complex pricing and promotions to model

  • Have hundreds of people in your sales team who all need to contribute to the plan

  • Have a complex relationship between supply and demand that constrains you

  • And so on...

You need a tool like Anaplan to be able to model that complexity and store the large volumes of data involved.

 

So does Anaplan come out of the box enabling companies that sell widgets to plan in that way?

Yes and no.  "No" because Anaplan enables you to create models like the one described above from scratch.  This is important because no two companies are the same in the way they need to plan their business.  It's a strength of Anaplan that it is agile enough to be able to plan out any model you can think of.

 

"Yes" because of the Anaplan App Hub.  Much like the Apple App Store, this contains over 200 pre-built applications for planning in specific industries, or for planning specific business operations.  For example, we have a specific application for asset heavy companies, like upstream oil companies, to plan out their large capital project expenditure.  So often there's an application that is an 80% fit of your desired planning model, and you can simply take it and modify it to suit your purposes.  Sometimes it makes more sense to start from scratch.

 

So Anaplan is a tool for Finance?

No.  Because Anaplan is so flexible, it can be used to support planning in all business processes.  Here's just a few non-finance examples:

  • HR - strategic workforce planning

  • Marketing - planning trade promotion spend and effectiveness

  • Sales - sales quota planning

  • Supply Chain - demand planning

  • Operations - project portfolio planning

  • IT - agile project management

On top of that, it can join all these plans up.  Anaplan calls this "Connected Planning".

 

What's Connected Planning?

Simply put, it's when you connect up the planning processes, people and data within your organisation. 

 

Imagine you are the Finance department within an upstream oil and gas company and you need to be able to create a projected set of financial statements.  You can't do this in a silo.  You need to understand from the operational teams what projected spend on capital projects is and when the assets under development will start generating product and in what volume, as well as volumes from existing assets.  You need to understand from your trading and shipping what likely future commodity and distribution prices will be.  You need to understand from HR what the cost of the workforce will be.  Yet those three departments - Operations, Trading/Shipping and HR - all need to create those figures from complex models themselves.  In a Connected Planning system, these various plans would all be joined up so that a change in a project commodity price model immediately impacts the projected financial statements - the P&L, the balance sheet and the cash flow.

 

Connected Planning solutions can therefore allow companies to make quicker decisions made on more up-to-date and accurate information.

 

Do you need a PhD to build an application?

Nope, because I can build one!  Another of Anaplan's strengths is how easy and intuitive the tool is.  This means that finance teams or sales teams, for example, can build and maintain their own models with very little outside help from the IT team.

 

Do we need powerful, expensive hardware to run Anaplan?

No.  It is a true SaaS cloud-based tool which means (a) you need no internal hardware infrastructure to run Anaplan and (b) no delays in getting your environment in place when you decide to go ahead with Anaplan.

 

Are there alternatives to Anaplan?

Anaplan competes against a number of other planning tools.

 

Firstly there are what I would call "legacy tools" made by companies such as SAP (BPC), Oracle (Hyperion) and IBM (Cognos).  These were typically developed over 20 years ago on older software technologies, requiring dedicated physical or virtual infrastructure.  Anaplan was developed in the first place to overcome the numerous challenges that these legacy tools all had around things like TCO and performance.

 

Anaplan also competes against some other cloud based tools such as Adaptive, Tagetik and Oracle PBCS.  In my opinion Anaplan has at least one main advantage over these tools - the Connected Planning vision which is enabled by the patented HyperBlock engine that Anaplan runs on.

 

What is the HyperBlock?

It is the software "brain" behind Anaplan - it holds the entire planning model in-memory and automatically updates the model in near real-time by only updating affected cells.  Why's that important?  Imagine you have a a model with millions of cells - say, all sales by product, by customer.  You want to see what would happen if you uplift all product costs by 5% - this impacts millions of cells of data, but this will happen incredibly quickly in the Anaplan platform because of the Hyperblock.

 

Does Anaplan integrate with other software?

Yes, and it's important that it does so that, for example:

  • Actual financial results can be brought in from your ERP system(s).

  • Production plans developed in Anaplan can be sent back to your MRP system.

  • And so on...

Many of the usual cloud ESB tools such as Dell Boomi and Mulesoft can be used to integrate Anaplan with almost any other software package.  Additionally, Anaplan have a tool called the HyperConnector, which is their preferred ESB.

 

Equally, where appropriate Anaplan of course supports both file import/ export and also has its own API which can be used when a direct programmatic integration is needed.

 

Anaplan is a cloud tool.  Is it secure?

Yes.  For example, Anaplan undergoes SOC 2 audits twice per year as well as SOC 1 audits at least annually.  These means that an independent third-party auditing firm ensures compliance with the highest standards in security.

 

To give some comfort, Anaplan is used by some of the worlds largest companies, in regulated industries such as banking and insurance - these companies have all performed their own due diligence before adopting Anaplan.

 

What else do I need to know?

I think it's important to emphasise Anaplan's culture.  People who work at Anaplan are typically very bright, very friendly and dedicated to doing a really excellent job.  This is a real benefit to their customers who see the results of this in the frequent user community events that are held, and in the enthusiastic way that online forums are updated.  Customers often become real fans of Anaplan - not just because the software helps them do their job more effectively, but because they genuinely feel that they are part of a community.

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