Planning & Budgeting Software Licensing: 6 Pro Tips

Shopping for a planning and budgeting solution for your organization and confused by the licensing models? You should be! As the Corporate Performance Management space has evolved, so have the various types of licenses.

If you’re working with ShortlistMatch on your evaluation, worry not. We review our buyer’s order forms at the final stages of their evaluation. This allows us to compare all quotes, confirming they’re all “apples to apples” and do not contain high-risk line items or language.

1.    Users

User licenses are the most common way to buy planning software. They come in a few varieties:

Named Users

One email address, one license. This is the simplest form of user licensing on the planet. In the planning and budgeting world, the majority of products on the market have some form of named user licensing.

If you assign a license to someone who quits, you can almost always de-activate that person (keeping their system records intact) and re-assign it to a new employee. This makes audit trails function properly and saves you from engaging the vendor when you need to make simple changes.

This license type is popular because they’re easier to purchase and track. You already know who on the finance team is working the Excel budget – they’ll need a license. How many department owners send you a spreadsheet? They’ll need one too. And depending on how you plan to serve up reporting, some of those consumers may also need a license.

The downside? You have to track them. See our “Licensing Gotchas” later in this article for more information.

Concurrent Users

If you have 30 of these licenses, that means that 30 people can login at the same time. You could have 100 users with accounts on the system, but only 30 can sign in simultaneously. I see this model less and less nowadays as vendors have moved away from on-premise software.

Limited User Types

A subset of Named Users and Concurrent Users, this may include:

• Administrator: Generally the most expensive type of license. This license allows the user to do anything and everything in the system. Most buyers do not need more than 2 of these.
• Power Users: Sometimes the same as the Administrator, and sometimes not. This may be a user, like someone on the finance team, who is not allowed to modify the core functionality of the system (like the dimensions, adding users, accessing the audit trail) but can still access reporting and sheets at all top level dimensions. They’re more than a budget contributor, meaning they can do more than operating in a single department.
• Budget Contributor: Sometimes just “Contributor”, “Department User” or “Editor”, these users are allowed to add/edit/delete data inside their sphere of influence. This could be one department, or many departments. It could involve Workforce Models, P&Ls, etc.
• Reporting User: This user may be allowed to create reports using a limited set of data. They likely can’t access sheets. If they can, they can not edit the data.
• Dashboard User: Usually reserved for your Executive users, this license will limit them to graphical reporting, also known as Dashboards. This is beneficial for finance teams who want to offer more visibility into specific KPIs without confusing users with a large application. This user type, if deployed properly, can save you a lot of time with report requests from stakeholders.
• View Only: The most boring user type, this usually allows anyone in the organization the ability to look at things but do nothing to them. What are those things? That is usually up to you. Administrators sometimes think this is a low risk, inexpensive user, when in fact it has the potential to open up the entire application.

Keep in mind that every vendor is going to have their own definitions of each of these terms. Some might not have these terms at all, or only a subset of them. Read our “Compliance Trap” section below to understand how these limited users can get you into big trouble.

2. Enterprise Licenses

In this case, the vendor doesn’t care how many of anything that you add. Go nuts. You’ve paid a big fee for unlimited access.

Are you getting quoted on a license based on your employee count? In many cases, that means that the product is a buffet. Add as many budget contributors or dashboard users as you want. Since you paid a “per employee” license, you don’ have to think about anything written above here. It’s the simplest – but also can be the most expensive.

These come in a few different aliases with certain nuances:

• ‍Per Employee License: Anyone can use it. When the time comes for renewal, your employee count will be audited and you’ll receive a bill based on that new count.
• Unlimited License: The only rule here is that there is no rule. Add as many users as you want.‍
• Site License: And old way of saying “unlimited license” where “site” has a definition to keep it fenced in. For example, site might mean a specific subsidiary, or a country, or a building.‍
• Also known as: Corporate License, Volume License, Campus License, Group License, etc.

Always make sure to understand any limitations with this type of license. What happens at renewal? What if you want to downgrade?

3. Modules

In the planning, budgeting, and consolidation world, this may include things like:

• A specific reporting tool, like an Excel add-in
• Dashboards
• Certain drill-down functionality
• An industry-specific starter model
• Specific workflows like Workforce Planning, Capital Asset Planning
• Transaction matching
• Dimensions
• eLearning
• AI tools such as machine learning or chatbots
• Etc

If you’re concerned about what you’re buying, the best way to phrase the question to the vendor is “Show me what I’m NOT getting on this order.” This phrasing will force them to detail the rest of their license model, allowing you to question why specific items have not been included. In my experience, buyers who do this end up with the most clarity on their licenses and often end up getting more functionality for free at the end of the negotiation.

4. Storage

You’re reading this one, thinking “Did I time warp back to 2005?” Whelp, no. Turns out a small minority of CPM vendors are still charging for storage despite all the major IaaS providers making it cheaper than ever. Keep an eye out for these policies, which usually are buried inside the Subscription Service Agreement (SSA).

When thinking about a budgeting solution, you’re only storing numbers and some text. It’s not like you’re uploading pirated movies in full HD. But storage can still add up.

Storage use increases when you make new versions or add dimensions. Both those processes can exponentially increase the size of your database. Consider a cube (OLAP) database as example:

30 Products * 15 Channels * 5 Regions * 5 Departments = 11,250 possible combinations. Now add another dimension called Version.

11,250 * 5 Versions = 56,250 possible combinations. You’ve just increased the size of the database 5x.

It doesn’t always matter if most of those potential combinations are null. They still take up space, and as such might impact your storage limits and fees.

5. Integration

This form of a license may be dependent on:

• ‍Integration Points: One way pulls from your General Ledger, ERP, CRM, HCM tool and so on. Each connection may constitute a license fee.
• ‍iPaas Subscription: Some will license a subscription to something like Boomi or a white-labeled tool. This might be a blanket license, or more likely a per connection license like the above, just more expensive. The iPaas tools generally have more robust functionality than a custom-built integration that is unique to the CPM vendor.
• ‍Volume Based: Depending on the amount of data that goes back and forth between your source systems and the CPM vendor’s API, you’ll get charged. This is not very common in planning environments because they’re generally not used to store large amounts of transactions.
• ‍Custom: Something you pay an implementation provider to build an integration for you because your source system is not supported natively. For example, you’re running an ancient on-premise version of Great Plains (super common). This usually does not involve paying for a license, just labor.

6. Licensing Gotcha’s

User License Compliance Sales

Most financial planning platforms on the market will not stop you from adding more users than you own. In fact, that is an intentional functionality omission – allow customers to add as many users as they want and charge them retroactively in a surprise “compliance audit”. I made my number in 2008 by doing just that – since nobody was buying that year, what was a young sales rep to do? Scour the license database of course!

Is it scandalous? Yes, yes it is. This is why you need to limit access to who can add users or enable modules, making sure that person understands the contract.

Compliance Traps to Look Out For:

• Adding more users than you own (this is the most common by far)
• Modifying your “limited use” user, e.g. making a View Only user into a Budget Contributor
• Making an acquisition mid-contract thus expanding your employee count (for employee-based licenses)
• Enabling a module, such as a budget approvals workflow engine, dashboards, etc
• Re-selling access to the product
• Downloading an Excel add-in for the product without a license (many vendors will allow you to download it without verification)
• Exceeding your allowed concurrent users for any point in time
• Adding more integration points than allowed
• Exceeding storage limits

Overbuying

You’re in the sales cycle honeymoon phase. The vision: everyone in the company is going to login, daily! The rep is offering me an amazing deal based on volume. Let’s go!

Fast forward a year. The tool is loved, but only the finance team and department heads are using it. Now you’re sitting on shelfware.

The renewal comes around and now you’re trying to downgrade. Your discount disappears and goes back to list. You’re stuck with the original licenses, shelfware or not.

How to avoid this? Negotiate a reasonable discount for the users you need today, and ask for a discount lock in the event you need more licenses during the term.

Buying too Early

Picture it. December, the end of the vendor’s fiscal year. You’re planning to begin implementation the following April. A beautiful discount is offered, and you can’t pass it up. This deal will never come again. You buy.

April comes around and alas, you’re super busy. You push the implementation to May. Then June. Then July. Happens all the time.

Now you’ve been sitting on amazingly discounted licenses for 7 months. Did you benefit from that? Unlikely.

Much like putting away your laundry, the longer it sits on the bed unfolded, the more likely it is you’ll just pick clothes from the pile until it disappears.

In Conclusion

You’ve received a few quotes from planning vendors that you like. One is way cheaper than the others. Why?

If ShortlistMatch referred you to vendors, they’re usually within the same price bracket. If one of those is wildly out of sync with the others, that means something is missing. We’ll analyze this for you using our AI assistant as a guide.

Questions? Feel free to contact us anytime.

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