Companies are ill-prepared to budget, forecast and report efficiently and to keep up with changing conditions, and they're largely off-base in budget and forecast numbers, according to the findings of a Business Performance Management (BPM) Forum study report. Financial professionals and company staff are spending too much time and inappropriate levels of resources to tackle budgeting and forecasting, sacrificing the agility necessary to keep up with the tumultuous economic climate. However, a vast majority are planning to make changes in 2008 - adopting new technology, improving underlying business processes, and enhancing collaboration - in order to keep pace with the rapidly changing environment and manage growth effectively.

 

The Perfect How You Project study, an online survey of over 340 financial professionals across a wide range of industries and company sizes, was conducted by The BPM Forum and sponsored by Adaptive Planning. It underscores the critical challenges to corporate financial managers guiding their companies. Key findings include:

  • 70 percent are spending inappropriate amounts of time on budgeting.
  • 44 percent are involving too many or not enough resources in financial processes.
  • Only 16 percent of respondents say they are coming in on target for budgeted expenses - and even fewer for revenues at just 11 percent.
  • 75 percent are still mired in the inadequacies and inaccuracies of spreadsheets.
  • The top challenges they face are poor access to information, lack of collaboration, and rapid business change.
  • In order to respond to dynamic market conditions and manage growth effectively, 73 percent are planning to make changes in 2008.
  • Key 2008 initiatives include adopting new technology, implementing best practice processes, and embracing collaboration. 

Seventy-six percent of respondents are still dependent upon Excel spreadsheets for their budgeting, forecasting, and reporting-a startling number given the collaboration and accuracy challenges associated with these simple personal productivity programs. Nearly one-third of midsized and larger companies use more than 100 spreadsheets in their process. Cumbersome spreadsheets were cited as one of the top pitfalls delaying or disrupting the budgeting process. This widespread "spreadsheet sprain" is causing huge levels of anxiety and resource drain - companies that are dependent upon spreadsheets have a 50 percent higher rate of expressing anguish than those who are not dependent, and report that budgeting is a huge time and resource drain at a four times greater rate. 

 

Nearly 70 percent of respondents feel their organizations have little or no agility or adaptability in their planning and reporting. Almost half say there are either too many or not enough staff involved in budgeting and forecasting within their company. More than half also report that the budgeting process is too burdensome and time consuming, with 20 percent saying "hugely so."


Financial professionals realize that change is necessary, and they point to specific areas where they plan to make improvements this year. Change in the form of new technology, better collaboration, and better processes were the top priorities for 2008. 23 percent of midsized and larger companies plan to move beyond spreadsheets for a purpose-built solution in 2008. These areas of change are those in which companies felt they could make some significant strides in the coming year, perhaps because there is more awareness that better options are now available to them. 

 

The full report is available at http://www.bpmforum.org/request_form_perfect.asp

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