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Requirement

The system is sufficiently flexible that users can modify as the business model changes over time

Functional Area

General

Industries
All
DETAILS

Description

As organizations grow and evolve, their business models and strategies might undergo shifts. Therefore, the CPM system should be designed in a way that it can easily be modified and reshaped to cater to these dynamic needs without causing disruptions in reporting or data integrity.

Example Use Case

Scenario: A mid-sized online retail company initially runs its business with a simple model: purchasing products from suppliers and selling them on their website. They use budgeting and forecasting software to manage this for the entire company.

However, over time, the company decides to diversify its business model. They now also act as a platform, allowing other retailers to sell their products on the company's website. This shifts the company's business model from being only a retailer to also being a marketplace.

Solution: The budgeting and forecasting software used by the company must adapt to this change. It should allow, without extensive consulting support, the finance team to add necessary infrastructure to the application such as accounts, subsidiaries, channels, calculations and so on to facilitate this change in the business model.

Considerations

The business model shift in the use case above is material, as the business is adding essentially an entirely new business. It's the Amazon bookseller to platform example. We see this with products companies shifting to a subscription model, or hourly consultants who shift to managed services.

Depending on the size of the shift, it may require implementation with many tools on the market. This is because dimensions and other infrastructure tend to be tied into all the sheets, forms, reports and so on. Adding or removing one wreaks havoc on the model. Adding an entirely new business model could mean a new chart of accounts, new source systems, and so on. It might be faster and less expensive to re-think the entire model.

However, something as simple as adding a new channel, or revenue model, should be easier to accomplish. Something so rigid that it requires an enormous consulting engagement for something minor should be a red flag.

Questions to Ask a Vendor

  • Uncertain Future: We have a lot of hopes and dreams with this business and expect it to go in different directions that we anticipate today. What happens if we add a new business, or business model, on top of what we have today?
  • When to Re-Implement: Can you give us two scenarios - when adding something does not require a re-implementation, and what would necessitate one?