Moore, Howard L., Global Finance
No one likes budgeting and forecasting, and nearly no one is satisfied with the results. A variety of innovative software companies recognize this and are embracing new strategies, the Internet, and other technologies to make the process more productive.
"What's wrong with planning? "It's unproductive, and it doesn't satisfy management," answers Larry Kerber, vice president of product marketing at Comshare. The reason, he says, is that the process doesn't link the company's financial strategies with the way resources are allocated."No one believes that budgeting is worth the effort put into it, but it's the process that's broken," says Adam Thier vice president, product marketing, at Adaytum. "You're putting financial data in front of nonfinancial people who don't understand the company's financial goals What is required is an integrated solution that supports top-down planning from senior management and bottom-up allocation from department heads. "The two never equal out," says Thier. "The value comes not by pushing them together but by creating points of reconciliation to make them equal." Although the technology used to do this varies, the common denominator is Web-based standards that bring the overall cost down.
All recognize that the process needs to be more collaborative. "Senior management has to share its strategy and objectives in terms of words and concepts, not just provide the targets in terms of numbers. Department heads have to communicate how those strategies affect operations," says Kerber.
The Internet provides the facilities to document the assumptions and variances that are the basis of planning decisions. "The idea is to expand offerings beyond accounting and financial information to enterprise reporting, says Charlene Gust, eEnterprise product manager at Great Plains Software. A Webbased, E-business solution allows easy integration of the front and back offices, is installed centrally, and provides easy access from anywhere in the world.
"There is a concerted effort to combine financial with operational data such as sales transactions and other business events," says George Dearing, vice president of technology marketing at FlexiInternational. A financial data warehouse pulls the two together, and can then apply KPIs (key performance indicators) to measure the organization's performance. An effective enterprise information portal strategy which includes both traditional reporting (profit and loss, balance sheet) with analytic applications and balanced-scorecard reporting effectively links the entities within an organization, pulls it together in one place, does the analysis, and pushes it back out to decision makers.
"The analytic needs of accounting and finance are maturing," says Rich Clayton, senior director of product marketing at Hyperion. "Enterprise performance management is demanding more integration between business planning and budgeting to lower costs and maximize accuracy, accessibility, and efficiency." Companies can't look to their ERP sys tems to link these things together. "Then you can apply external benchmarks to analyze the business against peer groups, to establish targets, and to develop plans," he says. The Internet enables a user to pull together these disparate sources. "It's about business performance, not just taking financials and entering budget figures," says Geri Studebaker, product marketing manager at J.D. Edwards."The key is to discover what is driving the business through what-if and goalseeking scenarios."
"Traditional analysis is a dead-end process," says Jeff Ernst, product strategy manager, at Infinium. …