Lack of Speed, Flexibility Hamper Corporate Finance Departments

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The survey of 340 finance professionals found that speed- and accuracy-related problems plague most corporate finance departments, making budgeting, reporting and forecasting painful, slow, and inaccurate. Although financial professionals are focused on changing processes to correct these flaws, more than half of those surveyed noted challenges with time and complexity. Other respondents reported struggling with a lack of information, collaboration, and the ability to keep pace with rapid business changes. Of the financial teams in mid-market companies and divisions of large corporations surveyed, 75% said they need faster, easier, and more-accurate reporting, budgeting, and forecasting techniques.

For example, 76% of finance professionals reported depending on Microsoft Excel spreadsheets for their budgets, despite the application’s known limitations. Only 15% reported hitting their expected revenue projections and expense budgets last year. The top-level findings make a clear statement about possible and likely costs of overreliance on Excel. “Predictions are that this year’s budgets will not be highly accurate either,” the report noted, with only 40% of respondents being very or absolutely confident that their budgets will hit their mark.

Dave Murray, executive manager of BPM Forum, which conducted the survey, said that companies are dealing with “badly sprained financial processes, and executives are feeling a lot of pain.” He added that the study found that an inability to collaborate effectively with other departments is finance executives’ number-one “pain point.” Survey respondents who rely on spreadsheets reported approximately 50% more pain and frustration than those who use more-modern financial IT applications that involve more departments.

The report also stated that 23.3% of respondents plan to improve their companies’ fiscal efficiencies by moving from spreadsheets to a modern IT application. Bill Soward, president and CEO of Adaptive Planning, a partner in the study, said that performance management applications, which help companies address these concerns, is the fastest-growing category of business software, a trend he finds encouraging. Soward also said that although the survey confirmed many things already known or suspected, the finding of executives’ greater understanding of the importance of collaboration among departments was surprising and noteworthy.

Greg Schneider, Adaptive Planning’s vice-president of marketing, said that the fact that 73% of respondents said that they plan to use better IT tools and collaborate more is an indication that they know what is needed in order to manage in choppy economic times.

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