TRANSFORMING OUTDATED FINANCIAL PLANNING PROCESSES IS KEY TO IMPROVED BUSINESS PERFORMANCE, ACCORDING TO NEW REPORT

Business Performance Innovation (BPI) Network Study Showcases Key Financial Practices Companies Adopt to Drive Greater Agility and Performance

(San Jose, CA - August 13, 2014)

With Wall Street vehemently punishing stocks for missing earnings projections, companies would be well served to consider new agile financial processes that improve predictability and responsiveness to changing business conditions, as advocated in a report issued today by the Business Performance Innovation (BPI) Network.

The report, “Predictability Though Planning Agility: Best Practices in Collaborative Budgeting and Continuous Business Rebalancing,” showcases how corporate financial departments can adopt more continuous planning and budgeting processes and utilize next-generation technology platforms to help improve the business value of financial and operational insights. Key findings suggest that companies that embrace new financial management practices such as rolling forecasts and analytics achieve greater data accuracy, flexibility, predictability and timeliness. 

The report demonstrates the need to transform financial processes in an era of increased business volatility and change. Among 446 companies in the S&P 500 reporting second quarter earnings by August 7, 2014, some 27 percent fell below earnings expectations, according to FactSet, the financial information and analytics company. On average, stocks fell 3 percent during the four days surrounding those earnings reports, significantly more than the average stock price drop of 2.3 percent for such companies over the past five years.

“There is a strong correlation between companies that embrace financial best practices and those who outperform competitors in overall business performance,” said Dave Murray, director of thought leadership for the BPI Network. “High performing financial teams are doing away with cumbersome top-down budgets and embracing more collaborative and iterative planning. They’re moving away from manual, Excel-based processes and toward leveraging automated systems that improve business integration and time to insight.”

The report highlights key changes being made by companies to improve the value and relevance of financial teams and processes. They include the following shifts in financial planning, forecasting and budgeting:

• From annual to continuous
• From top-down to bottom-up
• From disconnected to integrated
• From budget-driven to model-driven
• From inflexible to agile
• From universally disliked to widely embraced

The study also finds that companies are increasingly achieving these goals with the adoption of new cloud-based platforms that automate key planning processes and functions, deliver greater business insights, and free financial professionals to become more valued advisors and partners with the business groups they serve.

The American Productivity and Quality Center estimates that only 38 percent of U.S. companies close their books in 5 days.  This lag is due largely to poorly designed manual processes and the inability to use data-driven insights to boost customer engagement and market share. Companies that can reduce their close time by just 2 days can increase resource availability for other high priority projects by an estimated 24 days a year, APQC says.

Jazz Pharmaceuticals, featured in the report, is a Dublin-based specialty drug maker that has grown rapidly over the past 4 years through mergers and acquisitions. “This rapid growth has required the finance teams and other business heads to closely collaborate in managing the budget and producing forecasts that are as accurate and timely as possible,” says Tami Gordon, Senior Director of Financial Planning and Analysis at Jazz. “Our growth strategy demands real-time visibility into the state of the business and the flexibility to reallocate resources as business requirements change.”

Welch Allyn is a 100-year old medical device maker, also featured in the report. “Aligning costs with revenue is one of the most essential things a company can do,” says Rick Odom, Senior Manager for Financial Planning and Analysis at the company. “Analytics provide the best means for achieving visibility and predictability," he says.

Host Analytics, a leader in Enterprise Performance Management (EPM) solutions that help companies manage their finance operations and drive businesses performance, sponsored the report.

“Companies are operating in a dynamic and volatile world,” says Ron Baden, Vice President of Services for Host Analytics. “They need to be willing to abandon obsolete processes to remain competitive. Addressing shifting customer demands and market opportunities requires that companies have the insights and flexibility to change directions and adopt new strategies more quickly than in the past.  Corporate financial organizations need to play a leading role in that transformation.”

To download the full, detailed report, please visit:

http://www.bpinetwork.org/thought-leadership/studies/49

About The Business Performance Innovation (BPI) Network

The BPI Network is a peer-driven thought leadership and professional networking organization dedicated to advancing the roles of executives who are drivers of change and innovation within their organizations. The BPI Network brings together thought leaders in the area of business performance through ongoing research, authoritative content and peer-to-peer conversations. We are advocates for innovation and seek to demonstrate how inventive solutions can advance business value and create competitive advantage for companies worldwide.

About Host Analytics

Host Analytics is the leader in cloud-based Enterprise Performance Management (EPM) solutions. The Host Analytics EPM suite provides planning, reporting and data analytics to corporate budgeting and forecasting professionals. Host Analytics customers benefit from improved business agility, lower total cost of ownership and faster time to value. Major brands such as GoPro, Intelsat and Tesla Motors trust Host Analytics to power their strategic financial processes. Host Analytics is a fast-growing, private company backed by leading venture capitalists and headquartered in Silicon Valley with offices around the globe.