of Speed, Flexibility Hamper Corporate Finance Departments
MAY 2008 - Most companies’ fiscal processes are too slow
and inflexible to deal with what has become a fast-paced business
environment. A recent national study found that two-thirds of
companies are not highly adaptive in their financial planning
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
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