In past articles I’ve written here on arcplan’s BI Blog, I explored the role of spreadsheets in the planning, budgeting, and forecasting process and the importance of agility and accuracy. Today I would like to talk about the benefits of business analytics in the planning process when it comes to providing agility and accuracy.
When forecasts are consistently accurate, business leaders can have more confidence when making decisions and investments to guide the organization, as they have a good idea of how the organization will perform in the coming months. Agility is essential because volatile markets make it difficult for forecasts to reflect current business conditions. Therefore, Best-in-Class organizations are more likely than All Others to implement technology to enable both data access and the ability to utilize data to make predictive decisions (Figure 1). Fifty percent (50%) of Best-in-Class organizations have implemented an enterprise-level BI solution in comparison to 28% of All Others. These tools provide data in an easily consumable format so employees can find and utilize the data they need to make decisions. The Best-in-Class are also over twice as likely as All Others to have implemented predictive analytics. This technology helps to convert BI data into forward-looking forecasts.
Figure 1: Best-in-Class Technology Adoption
Source: Aberdeen Group, January 2013
Providing Visibility & Agility: The Key Components of Success in Planning, Budgeting, and Forecastingby Nick Castellina
In my previous post, I discussed the role of spreadsheets in financial planning, budgeting, and forecasting. My key conclusion was that organizations need more substantial technology to facilitate these processes through automation. What I did not discuss was how these technologies provide greater visibility into the data that is essential for successful decision-making as well as the importance of utilizing this data to create forecasts that constantly reflect current business conditions. Today I would like to discuss these themes, but let’s first take a step back to why they are important.
Aberdeen’s 2013 Financial Planning, Budgeting, and Forecasting survey illustrated the top pressures hindering planning processes (Figure 1).
Figure 1: Pressures in Planning, Budgeting, and Forecasting
Source: Aberdeen Group, January 2013
Highlighting the importance of agility, organizations are pressured with volatile markets that make it extremely difficult to forecast effectively. This is compounded by the fact that 25% of organizations reported that their current budgeting process is too long and resource intensive. So organizations are spending all this time and effort, and by the time the planning process is complete, the output is already based on old data.
In my role as the Senior Research Analyst in the Aberdeen Group’s Business Planning and Execution research practice, I spend a significant amount of time studying the key pressures facing organizations in their planning processes as well as the key technologies that top performing organizations use. Unsurprisingly, I often get questions on the role of spreadsheets in the planning process. Spreadsheets continue to be a popular tool used in financial planning, budgeting, and forecasting processes. In fact, Aberdeen’s 2013 Financial Planning, Budgeting, and Forecasting Benchmark survey found that 89% of organizations use spreadsheets in the planning, budgeting, and forecasting processes. Employees are comfortable with spreadsheets because many of them use them in both their professional and personal lives. This familiarity makes it unsurprising that both top performing and Laggard organizations are employing them in some aspect of their financial planning process. This reliance may stay the norm for the foreseeable future and spreadsheets are likely to continue to be an integral part of the planning process.
Yet while the Best-in-Class may be using spreadsheets as a part of the planning process, they are less reliant on them as the sole means of communication and interaction, preferring to combine them with the use of applications (Figure 1). Being a repository of exported data is in fact the leading role spreadsheets play in top performing companies. As the methods in which spreadsheets are used become more manual, the Best-in-Class and the Laggards switch rankings…
Business intelligence is evolving in ways that improve efficiency, productivity, and the bottom line for companies of all sizes. Combined with major innovations like real-time data access and mobile technology, BI is truly driving the success of leading organizations. The Aberdeen Group’s recent report, Decisions on the Move: Mobile BI 2013, surveyed the state of mobile business intelligence and found that “leaders” enjoy benefits like a 2.3-times year-over-year improvement in sales revenue and customer retention, and a 70% improvement in operating profit over “followers.” The benefits of mobile BI are both practical and tangible, but some companies are still standing on the sidelines, not taking advantage of the mobility that their BI platform likely facilitates. So let’s address the misconceptions that keep some organizations lagging behind when it comes to mobile BI:
It can wait ’til I get back to the office…
The proliferation of mobile devices has opened the floodgates for an “always-connected” society. We can argue about whether or not that’s a good thing, but it is the state of business these days. Allowing yourself to think that business questions can be tackled once you’re back at the office is a mistake – one your competition may not be making. Mobile BI empowers your executives, field teams, off-site workers, and sales managers to be productive, attending to time-sensitive information and making impactful decisions no matter where they are. Certain decisions – or at the very least, status checks – can’t wait until these road warriors get back to their desk, especially when dealing with vendors and customers in different time zones. The work day isn’t confined to 9-to-5 if you’ve got coworkers, customers and vendors spread across the country, or if you’re global like arcplan. Leading organizations realize the value of mobile BI’s ability to give workers access to decision-relevant data day and night. I’d never suggest that you tether yourself to your corporate metrics 24/7, but for the times you really need that information away from the office, mobile BI is invaluable.