One of the best parts of my job is to strategize with finance leaders building or transforming their tech stack. Given my background in building planning systems for Facebook, GE, TIAA-CREF, Zenefits, and a handful of others, I’m frequently asked to provide advice on the market. Another question I frequently get asked is whether a planning system or Trace should come first. The reality is you need both at some point, but I’m going to share my thoughts on the breaking points and pitfalls to help people decide. 

Everyone knows what a planning system is (here is ours), so we’ll skip a definition. 

Trace is building a new category of software to enable business partner collaboration with the first service desk for Finance. We provide solutions for spend management, headcount management, and budget analysis. It’s a single place for people to execute their purchase and headcount plans while giving budget-owners visibility into how their commitments impact their budget. It’s like a budget template that has built-in procurement and headcount workflows. It syncs to all your core systems (ERP, HR, ATS, Planning, and more) and connects all of your data. 

Everyone knows the classic modeling phrase: GIGO. Garbage-in, garbage-out. The leading case for Trace to come first is that it allows you to build on bedrock. The distribution and collection of information from business partners is a focal breaking point of excel or sheets planning. Trace handles business partner collaboration and provides you with your most critical dataset. We call it committed spend, the most up-to-date information from your business partners on what’s happening and what’s going to happen. 

Some colleagues and investors, such as Mark Bauer (former SVP Product at Planful) and Kerman Lau (former VP Product at Adaptive Insights), first saw Trace and said we're on a path to solve the holy grail of planning: the committed forecast. It's a continuous plan generated by resource requests from business teams.

That said, business partner collaboration and operating expenses don’t give you a complete financial plan. If you’re not able to create a financial plan, then you’re in trouble. Reasons to go with a planning system first generally include losing faith in the reliability and integrity of your models. Here are some of the common breaking points:

  • High frequency of errors or general lack of trust in the outputs.
  • Models are frequently crashing or are too slow.
  • Too much data for a spreadsheet to handle.
  • More than five people collaborating in the same modeling environment.

It’s arguably more important to know when not to switch. Making a move to a planning system too early will result in a ton of wasted time and likely a reversion to spreadsheets:

  • Your business model is changing or not dialed in. 
  • Your team loves excel or google sheets. 
  • You're trying to get into a better planning cadence/process.

If the above items don’t ring true, then you’re likely dealing with issues related to the distribution and collection of information with your business partners and reconciling plans to what’s happening or happened. Trace is built to work with your financial plans whether the source is a system or spreadsheet. When plans are set, then Trace picks things up to make sure people can seamlessly execute against their plans and track in real-time how their decisions will impact them into the future. 

Here are some questions to ask when thinking about starting with Trace:

  • Do you have a system for collecting requests from the business?
  • Can you efficiently distribute your budget or hiring targets?
  • Are you able to support all your key decision-makers?
  • Do you have a non-manual way to reconcile headcount?
  • Can you immediately answer the question … where am I in my budget?
  • Can you dive into the right level of detail to explain any variance in a snap?

If you see Trace as a critical data source to build your plans then get the foundations in place. If you can’t afford to wait and need to get a plan out the door, then invest in a planning system. In most cases, your financial models can run on excel or sheets for a lot longer if they have to. Your purchasing and hiring processes can’t. Don’t buy a sports car when you need to take your kids to practice. Prioritize your business partners, and they’ll reward you with better decisions, more information, and better execution.