How Benchmarking Helps Adaptive Insights Manage Budgets and Targets

How AdaptiveInsights Uses OPEXEngine Benchmarking from OPEXEngine on Vimeo.

Kerman Lau

Kerman Lau, Vice President Finance, Adaptive Insights

Adaptive Insights, a Palo Alto-based provider of next generation business planning tools, empowers organizations to transform the planning process into a strategic advantage. The Adaptive Insights Business Planning Cloud platform provides powerful modeling for more than 3,800 organizations around the world and was recently acquired by Workday (WDAY). Kerman Lau is Vice President of Finance at Adaptive Insights and uses OPEXEngine benchmarks in his planning process and to better guide his discussions with internal business partners.

Adaptive’s financial organization has been using OPEXengine for over 8 years. Kerman uses the BenchmarkEngineTM to benchmark performance against peers and set internal targets. They have found the benchmarks especially helpful when a question comes up with internal operating managers. For example, if an R&D manager believes that he should receive a larger share of the budget, Kerman will use the BenchmarkEngineTM data to show how the R&D department compares to peers. Using the independent, 3rd party data of OPEXEngine gives him confidence to make decisions based on data rather than opinion, anecdotal information or past experiences which may not apply to today’s situation.

Kerman also uses the Benchmark Engine when preparing for meetings with his Board, during a strategy meeting or discussing Adaptive’s financial plan. Typically, the question usually comes up in a Board meeting “how are we doing against an external benchmark?”. With OPEXEngine data, Kerman can present the relevant metrics of companies growing at Adaptive’s growth rate and get insight into what key SaaS metrics like CAC, LTV or sales and marketing expenses should be for Adaptive’s size and stage of growth.

In addition to using the OPEXEngine benchmarks on a regular basis with executive management, the board and individual operating department heads, Kerman uses the BenchmarkEngine™ for planning Adaptive’s growth both at a KPI level and at the individual departmental level. He can look at expense, headcount and other metrics for each department for several years out.

“As we look out a couple of years … it gives us a good sense of where we are as we try to get best-in-class in terms of these core metrics in the SAS World.”

As a leading corporate performance management solution (CPM) provider, Adaptive uses the OPEXEngine benchmarks in their own application. It is easy to upload relevant benchmarks for budgeting and planning purposes directly into the Finance organization’s Adaptive model, so the team can model and build plans using benchmarks as the company moves into its new phase of being part of a much larger company, Workday. The benchmarks also help the Adaptive team provide context to Workday about targets and expenses for companies their size.

Video Transcription:
We have used OPEXengine for over 6 years here at Adaptive. We use it to benchmark how we’re doing against our peers — it lets us set targets. It’s really helpful when there’s a question that comes up with a business partner. For example, the R&D guy says, “our percent of revenue is perfect. Looking at my spending, I think I get too little of the budget”. So we look at the benchmarks and we say, “ no… really you are probably a little too high compared to all of our peers at our level”. So that’s really helpful with those discussions. When we would go to the board and we have a strategy meeting or just talking about the plan, typically the question usually comes up, “how are we doing against an external benchmark?”. Companies growing at our growth rate, what should their sales and marketing expense be? Or with our profile what should be the CAC? What should be our customer lifetime value? As we look out a couple of years we can say the best companies run at this level and we are going to hit that in lets say 24 months So it gives us a good sense of where we are as we try to get best-in-class in terms of these core metrics in the SAS World. Benchmarking data is traditionally very hard to get because companies don’t like to give it to you so it’s hard to find and it’s hard to aggregate. So it’s great that off OPEXEngine will offer this service where they are doing the hard work of gathering it from their participants and their survey and then making it available anonymously to us as a customer of theirs.

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