Ventana Research recently awarded Workday a 2016 Technology Innovation Award for its newly released application, Workday Planning, because it simplifies and streamlines the budgeting and planning processes while facilitating collaboration, deepening visibility into spending and enabling tight fiscal control. These capabilities can help a variety of user organizations in several ways.
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Topics: Big Data, Marketing, Office of Finance, Budgeting, Controller, In-memory, CFO, Workday, demand management, Financial Performance Management, financial reporting, FPM, Integrated Business Planning
Workday Financial Management (which belongs in the broader ERP software category) appears to be gaining traction in the market, having matured sufficiently to be attractive to a large audience of buyers. It was built from the ground up as a cloud application. While that gives it the advantage of a fresh approach to structuring its data and process models for the cloud, the product has had to catch up to its rivals in functionality. The company’s ERP offering has matured considerably over the past three years and now is better positioned to grow its installed base. Workday recently added Aon, the insurance and professional services company, to its customer list (becoming its largest customer to date) and reported that its annual contract value (ACV - the annualized aggregate revenue value of all subscription contracts as of the end of a quarter) has doubled since the second quarter of this year, albeit from a low base. This is an important milestone because for years the company’s growth has come from the human capital management (HCM) portion of the business, not financials. Workday has around 160 customers for its financials (more than 90 of which are live) compared to more than 1,000 customers for HCM.
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Topics: Microsoft, SAP, ERP, FP&A, Human Capital, NetSuite, Office of Finance, Reporting, close, Controller, dashboard, Tax, Operational Performance, Analytics, Business Intelligence, Business Performance, Cloud Computing, Collaboration, Financial Performance, IBM, Oracle, Uncategorized, CFO, Data, Financial Performance Management, FPM, Intacct, Spreadsheets
The enterprise resource planning (ERP) system is a pillar of nearly every company’s record-keeping and management of business processes. It is essential to the smooth functioning of the accounting and finance functions. In manufacturing and distribution, ERP also can help plan and manage inventory and logistics. Some companies use it to handle human resources functions such as tracking employees, payroll and related costs. Yet despite their ubiquity, ERP systems have evolved little since their introduction a quarter of a century ago. The technologies shaping their design, functions and features had been largely unchanged. As a measure of this stability, our Office of Finance benchmark research found that in 2014 companies on average were keeping their ERP systems one year longer than they had in 2005.
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Topics: Big Data, Microsoft, SAP, Social Media, Supply Chain Performance, ERP, FP&A, Human Capital, Mobile Technology, NetSuite, Office of Finance, Reporting, close, closing, Controller, dashboard, Reconciliation, Operational Performance, Analytics, Business Collaboration, Business Intelligence, Business Performance, Cloud Computing, Collaboration, Financial Performance, IBM, Oracle, Uncategorized, CFO, Data, finance, Financial Performance Management, FPM, Intacct
Whatever Oracle’s cloud strategy had been the past, this year’s OpenWorld conference and trade show made it clear that the company is now all in. In his keynote address, co-CEO Mark Hurd presented predictions for the world of information technology in 2025, when the cloud will be central to companies’ IT environments. While his forecast that two (unnamed) companies will account for 80 percent of the cloud software market 10 years from now is highly improbable, it’s likely that there will be relentless consolidation, marginalization and extinction within the IT industry sector driven by cloud disruptions and the maturing of the software business. In practice, though, we expect the transition to the cloud to be slow and uneven.
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Topics: Microsoft, Predictive Analytics, Sales Performance, SAP, Supply Chain Performance, ERP, Human Capital, Mobile Technology, NetSuite, Office of Finance, Reporting, close, closing, Controller, dashboard, Tax, Customer Performance, Operational Performance, Analytics, Business Collaboration, Business Intelligence, Cloud Computing, Collaboration, IBM, Oracle, Business Performance Management (BPM), CFO, Data, finance, Financial Performance Management (FPM), Financial Performance Management, FPM, Intacct
Continuous Accounting Enables a Strategic Finance Department
Posted by
Ventana Research on Oct 29, 2015 9:32:32 PM
Many senior finance executives say they want their department to play a more strategic role in the management and operations of their company. They want Finance to shift its focus from processing transactions to higher-value functions in order to make more substantial contributions to the success of the organization. I use the term “continuous accounting” to represent an approach to managing the accounting cycle that can facilitate the shift by improving the performance of the accounting function. Continuous accounting embraces three main principles:
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Topics: ERP, Office of Finance, Reporting, close, closing, Controller, dashboard, Tax, Analytics, Business Intelligence, Business Performance, Cloud Computing, Collaboration, Financial Performance, CFO, Data, finance, Financial Performance Management, FPM
Finance Transformation Requires Strong Leadership
Posted by
Ventana Research on Sep 3, 2015 8:34:04 AM
The theme of transforming the finance organization is hot again. The term “finance transformation” refers to the longstanding objective of shifting the focus of finance departments from transaction processing to more strategic activities such as providing the rest of the organization with forward-looking analysis. I focus on the technology and data aspects of this type of business issue in these analyst perspectives because they are usually essential to achieving some business objective. However, technology rarely fixes a problem by itself. If it were a simple matter of just buying software or having better data stewardship, it would be relatively easy to achieve finance transformation. But it’s not simple at all. When it comes to changing how the finance and accounting organization operates, there’s no substitute for leadership. Doing that requires changes in the habits of the department, which include the CFO changing how the department works with the rest of the company.
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Topics: Performance Management, continuous improvement, Controller, Analytics, Business Performance, Financial Performance, CFO
Integrated Business Planning Is More Effective
Posted by
Ventana Research on Feb 24, 2015 8:02:12 PM
Ventana Research recently released the results of our Next-Generation Business Planning benchmark research. Business planning encompasses all of the forward-looking activities in which companies routinely engage. The research examined 11 of the most common types of enterprise planning: capital, demand, marketing, project, sales and operations, strategic, supply chain and workforce planning, as well as sales forecasting and corporate and IT budgeting. We also aggregated the results to draw general conclusions.
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Topics: Big Data, Planning, Predictive Analytics, Sales, Sales Performance, Social Media, Supply Chain Performance, Human Capital Management, Marketing, Office of Finance, Reporting, Budgeting, Controller, Customer Performance, Operational Performance, Business Analytics, Business Performance, Cloud Computing, Financial Performance, In-memory, Workforce Performance, CFO, Supply Chain, capital spending, demand management, Financial Performance Management, financial reporting, FPM, Integrated Business Planning, S&OP
Office of Finance Research Demonstrates Importance of Using Effective Financial Software
Posted by
Ventana Research on Feb 2, 2015 8:27:14 AM
Our recently published Office of Finance benchmark research assesses a broad set of functions and capabilities of finance organizations. We asked research participants to identify the most important issues for a finance department to address in a dozen functional areas: accounting, budgeting, cost accounting, customer profitability management, external financial reporting, financial analysis, financial governance and internal audit, management accounting, product profitability management, strategic and long-range planning, tax management and treasury and cash management. Among the key findings is this: Not using the most capable software is an underlying cause, often unrecognized, of process, analytics and data issues.
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Topics: Mobile, Planning, Predictive Analytics, ERP, FP&A, Office of Finance, Reporting, Self-service, Budgeting, close, closing, computing, Controller, dashboard, Tax, Analytics, Business Intelligence, Business Performance, Cloud Computing, Collaboration, Financial Performance, CFO, Data, finance, Financial Performance Management, FPM, Microsoft Excel, Spreadsheets
Make Automating the Office of Finance and Accounting a Priority
Posted by
Ventana Research on Jan 27, 2015 7:49:48 AM
Our recent Office of Finance benchmark research demonstrates the importance of using automation to execute finance department functions. Information technology systems do at least two things very well that make better use of people’s time, and both of them can substantially improve organizational performance. First, they eliminate the need for people to do repetitive tasks, which frees them to spend time on more valuable work that requires judgment and skill. IT systems also can be programmed to focus only on relevant information while eliminating the need to get immersed in detail. The latter capability supports a “management by exception” approach, which enables executives and managers to better allocate how and where they spend their time.
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Topics: Big Data, Mobile, Planning, ERP, FP&A, Office of Finance, Reporting, Self-service, Budgeting, close, closing, computing, Controller, dashboard, Tax, Analytics, Business Analytics, Business Collaboration, Business Intelligence, Business Performance, Cloud Computing, Collaboration, Financial Performance, CFO, Data, finance, Financial Performance Management, FPM, Microsoft Excel, Spreadsheets
Technology Can Enhance Performance in Finance Departments
Posted by
Ventana Research on Oct 29, 2014 9:39:31 AM
Finance transformation” refers to a longstanding objective: shifting the focus of CFOs and finance departments from transaction processing to more strategic, higher-value functions. Our upcoming Office of Finance benchmark research confirms that most of organizations want their finance department to take a more strategic role in management of the company: nine in 10 participants said that it’s important or very important. (We are using “finance” in its broadest sense, including, for example, accounting, corporate finance, financial planning and analysis, treasury and tax functions.) Finance departments have the ability and at least an implicit mandate to improve business performance and enable a corporation to execute strategy more effectively. Yet the research shows that becoming strategic is a work in progress. Most departments handle the basics well, but half fall short in areas that can contribute significantly to the performance of their company. More than three-fourths of participants said they perform accounting, external financial reporting, financial analysis, budgeting and management accounting well or very well. But only half said that about their ability to do product and customer profitability management, strategic and long-range planning and business development.
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Topics: Big Data, Mobile, Performance Management, Predictive Analytics, Social Media, ERP, FP&A, Office of Finance, Reporting, Management, close, closing, computing, Controller, Tax, Analytics, Business Analytics, Business Collaboration, Business Performance, Cloud Computing, Collaboration, Financial Performance, CFO, finance, Tagetik, FPM
Finance Needs Better Analytics and Analytic Skills
Posted by
Ventana Research on Oct 13, 2014 11:58:09 PM
Finance and accounting departments are staffed with numbers-oriented, naturally analytical people. Strong analytic skills are essential if a finance department is to deliver deep insights into performance and visibility into emerging opportunities and challenges. The conclusions of analyses enable fast, fully informed business decisions by executives and managers. Conversely, flawed analyses undermine the performance of a company. So it was good news that in our Office of Finance benchmark research 62 percent of participants rated the analytical skills of their finance organization as above average or excellent.
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Topics: Big Data, Mobile, Planning, Predictive Analytics, ERP, FP&A, Office of Finance, Reporting, Self-service, Budgeting, close, closing, computing, Controller, dashboard, Tax, Analytics, Business Analytics, Business Intelligence, Business Performance, Cloud Computing, Collaboration, Financial Performance, CFO, Data, finance, Tagetik, Financial Performance Management, FPM, Microsoft Excel, Spreadsheets
Tagetik Advances Disclosure Management for Office of Finance
Posted by
Robert Kugel on Jul 16, 2014 9:06:01 AM
Tagetik provides financial performance management software. One particularly useful aspect of its suite is the Collaborative Disclosure Management (CDM). CDM addresses an important need in finance departments, which routinely generate highly formatted documents that combine words and numbers. Often these documents are assembled by contributors outside of the finance department; human resources, facilities, legal and corporate groups are the most common. The data used in these reports almost always come from multiple sources – not just enterprise systems such as ERP and financial consolidation software but also individual spreadsheets and databases that collect and store nonfinancial data (such as information about leased facilities, executive compensation, fixed assets, acquisitions and corporate actions). Until recently, these reports were almost always cobbled together manually – a painstaking process made even more time-consuming by the need to double-check the documents for accuracy and consistency. The adoption of a more automated approach was driven by the requirement imposed several years ago by United States Securities and Exchange Commission (SEC) that companies tag their required periodic disclosure filings using eXtensible Business Reporting Language (XBRL), which I have written about. This mandate created a tipping point in the workload, making the manual approach infeasible for a large number of companies and motivating them to adopt tools to automate the process. Although disclosure filings were the initial impetus to acquire collaborative disclosure management software, companies have found it useful for generating a range of formatted periodic reports that combine text and data, including board books (internal documents for senior executives and members of the board of directors), highly formatted periodic internal reports and filings with nonfinancial regulators or lien holders.
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Topics: Big Data, Mobile, ERP, Human Capital Management, Modeling, Office of Finance, Reporting, Budgeting, close, closing, Consolidation, Controller, Finance Financial Applications Financial Close, IFRS, XBRL, Analytics, Business Analytics, Business Intelligence, Business Performance, Financial Performance, Governance, Risk & Compliance (GRC), CFO, compliance, Data, benchmark, Financial Performance Management, financial reporting, FPM, GAAP, Integrated Business Planning, Profitability, SEC Software
Analytics has long been a core discipline of Finance, applied to analysis of balance sheets, income statements and cash-flow statements. However, as I’ve noted, most finance departments have not kept up with recent advances. Our recent research in finance analytics shows that few organizations are realizing the potential of more advanced analytic methods and tools such as predictive analytics and driver-based modeling. One reason for this sluggishness is that they have not looked past yesterday’s requirements to see what possible. Another is that they are distracted by the difficulties they face in simply doing tried-and-true analysis, which is the result of difficulties in accessing the necessary data and inadequate tools. A third reason is that people receive too little training in the application of analytics to business and the use of more advanced analytic tools and methods.
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Topics: ERP, FP&A, Office of Finance, Controller, Finance Analytics, Business Analytics, Business Performance, Financial Performance, CFO, Financial Management
Anaplan, a provider of cloud-based business planning software for sales, operations, and finance and administration departments, recently implemented its new Winter ’14 Release for customers. This release builds on my colleagues analysis on their innovation in business modeling and planning in 2013. Anaplan’s primary objective is to give companies a workable alternative to spreadsheets for business planning. It is a field in which opportunity exists. Our benchmark research on this topic finds that a majority of companies continue to use spreadsheets for their planning activities. Almost all (83%) operations departments use spreadsheets for their plans, as do 60 percent of sales and marketing units. Yet the same research shows that satisfaction with spreadsheets as a planning tool is considerably lower than satisfaction with dedicated planning applications. But despite general agreement in companies that the planning process is broken and spreadsheets are a problem, companies seem reluctant to break the bad habit of using spreadsheets. This conclusion suggests that either switching to dedicated software hasn’t been easy enough or that the results of doing it have not been compelling enough to motivate change. Anaplan intends to address both of these issues.
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Topics: Big Data, Performance Management, Planning, Predictive Analytics, Sales Performance, Supply Chain Performance, Marketing, Office of Finance, Operations, Reporting, Budgeting, Controller, Operational Performance, Business Analytics, Business Performance, Cloud Computing, Financial Performance, In-memory, Workforce Performance, CFO, Sales Planning, Financial Performance Management, financial reporting, FPM, Integrated Business Planning
Reconciling accounts at the end of a period is one of those mundane finance department tasks that are ripe for automation. Reconciliation is the process of comparing account data (at the balance or item level) that exists either in two accounting systems or in an accounting system and somewhere else (such as in a spreadsheet or on paper). The purpose of the reconciling process is to identify things that don’t match (as they must in double-entry bookkeeping systems) and then assess the nature and causes of the variances. This is followed by making adjustments or corrections to ensure that the information in a company’s books is accurate. Most of the time, reconciliation is a matter of good housekeeping. The process identifies errors and omissions in the accounting process, including invalid journal postings and duplicate accounting entries, so they can be corrected. Reconciliation also is an important line of defense against fraud, since inconsistencies may be a sign of such activity.
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Topics: Office of Finance, automation, close, closing, Consolidation, Controller, effectiveness, Reconciliation, XBRL, Business Performance, Financial Performance, Governance, Risk & Compliance (GRC), CFO, Data, Document Management, Financial Performance Management, FPM
Host Analytics Lifts Spreadsheets to Cloud for Finance
Posted by
Robert Kugel on Nov 27, 2013 9:48:54 AM
Host Analytics has introduced AirliftXL, a new feature of its cloud-based financial performance management (FPM) suite that enables its software to translate users’ spreadsheets into the Host Analytics format. I find it significant in three respects. First, it can substantially reduce the time and resources it takes for a company to go live in adopting the Host Analytics suite, lowering the cost of implementation and accelerating time to value. Second, it enables Host Analytics users who have the appropriate permissions to create and modify models and templates that they use in planning, budgeting, consolidation and reporting. This can enhance the value of the system by making it easier to maintain. Third, it can make it far easier to routinely collect and connect planning and analytical models used by all departments and business users as it has outlined in its planning cloud offering. Although it has limitations in its initial release, AirliftXL gives corporations a workable alternative to stand-alone spreadsheets and has the potential to substantially increase productivity and effectiveness of an organization in the full range of budgeting, planning, consolidation and reporting functions.
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Topics: Modeling, Office of Finance, Reporting, closing, Consolidation, Controller, Host Analytics, Operational Performance, Analytics, Business Analytics, Business Performance, Cloud Computing, Financial Performance, Workforce Performance, CFO, Financial Performance Management, FPM
All the hubbub around big data and analytics has many senior finance executives wondering what the big deal is and what they should do about it. It can be especially confusing because much of what’s covered and discussed on this topic is geared toward technologists and others working outside of Finance, in areas such as sales, marketing and risk management. But finance executives need to position their organization to harness this technology to support the strategic goals of their company. To do so, they must have clarity as to what big data can do, what they want it to do, and what skills and tools they need to meet their objectives.
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Topics: Big Data, Performance Management, Predictive Analytics, Customer Experience, Fraud, Governance, GRC, Office of Finance, audit, Controller, Analytics, Business Analytics, Business Performance, Cloud Computing, Financial Performance, Governance, Risk & Compliance (GRC), Information Management, Operational Intelligence, CFO, compliance, finance, Risk, Financial Performance Management, financial risk management
Tidemark Unifies New Generation of Business Planning Software
Posted by
Robert Kugel on Nov 1, 2013 6:56:27 AM
Tidemark announced the release of the Fall 2013 version of its eponymous cloud-based application that my colleague assessed earlier in 2013. This new release adds capabilities for labor planning and expense management as well profitability modeling and analysis. These two areas of planning and analysis are common to all businesses. The new release adds features that enhance the software’s ability to do sales forecasting, initiative planning and IT department planning. The company continues to refine its modeling capabilities to make it easier for people engaged in the planning process to translate their expectations and concerns into a quantified view of the future. For example, users now can build models using natural-language modeling. The objective is to eliminate the need for help from business analysts or experts trained in the use of a tool and immersed the details of the IT plumbing, such as the metadata used for specific general ledger accounts or operational data.
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Topics: Big Data, Performance Management, Planning, Predictive Analytics, Sales Performance, Supply Chain Performance, Office of Finance, Reporting, Controller, Operational Performance, Analytics, Business Performance, Cloud Computing, Customer & Contact Center, Financial Performance, In-memory, Workforce Performance, CFO, Tidemark, Financial Performance Management, financial reporting, FPM, Integrated Business Planning
CEOs and Executives Need Business Planning Software
Posted by
Robert Kugel on Oct 22, 2013 10:19:24 AM
Business planning is a new software category. These applications enable senior executives to integrate all the plans of business units into a single, integrated view, which helps them have more accurate plans, do more insightful what-if planning, achieve greater agility in reacting to changing business and economic conditions, and execute plans in a more coordinated fashion than was possible. Business planning software is intended for CEOs and COOs, who are not well served by current capabilities. Business planning software enables executives and managers to understand both the operational and the financial consequences of their actions, but it emphasizes the things that the various parts of the business focus on: units sold, sales calls made, the number and types of employees required, customers serviced and so on. Lines of business already do this but in a fragmented fashion using desktop spreadsheets circulated within silos via email. Business planning software provides a platform to support modeling in individual business units, individual planning processes and visualization of the impacts of changes in what-if scenarios. It offers a central data repository for all plans; our benchmark research shows the advantage of this approach: Companies that directly link individual business unit data to an integrated plan get more accurate results. To be specific, 22 percent of those with such links have very accurate budgets compared to just a handful with less direct links and none that employ summarized data.
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Topics: Big Data, Performance Management, Planning, Predictive Analytics, Office of Finance, Reporting, Budgeting, Controller, Operational Performance, Business Analytics, Business Collaboration, Business Performance, Cloud Computing, Financial Performance, In-memory, Workforce Performance, CFO, Financial Performance Management, financial reporting, FPM, Integrated Business Planning
Oracle Hyperion Products Challenged by New Generation of Expectations
Posted by
Robert Kugel on Oct 16, 2013 7:22:36 AM
Oracle continues to enrich the capabilities of its Hyperion suite of applications that support the finance function, but I wonder if that will be enough to sustain its market share and new generation of expectations. At the recent Oracle OpenWorld these new features were on display, and spokespeople described how the company will be transitioning its software to cloud deployment. Our 2013 Financial Performance Management Value (FPM) Index rates Oracle Hyperion a Warm vendor in my analysis, ranking eighth out of nine vendors. Our Value Index is informed by more than a decade of analysis of technology suppliers and their products and how well they satisfy specific business and IT needs. We perform a detailed evaluation of product functionality and suitability-to-task as well as the effectiveness of vendor support for the buying process and customer assurance. Our assessment reflects two disparate sets of factors. On one hand, the Hyperion FPM suite offers a broad set of software that automates, streamlines and supports a range of finance department functions. It includes sophisticated analytical applications. Used to full effect, Hyperion can eliminate many manual steps and speed execution of routine work. It also can enhance accuracy, ensure tasks are completed on a timely basis, foster coordination between Finance and the rest of the organization and generate insights into corporate performance. For this, the software gets high marks.
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Topics: Big Data, Mobile, Planning, Social Media, ERP, Human Capital Management, Modeling, Office of Finance, Reporting, Budgeting, close, closing, Consolidation, Controller, driver-based, Finance Financial Applications Financial Close, Hyperion, IFRS, Tax, XBRL, Analytics, Business Analytics, Business Intelligence, Business Performance, CIO, Cloud Computing, Financial Performance, In-memory, Oracle, CFO, compliance, Data, benchmark, Financial Performance Management, financial reporting, FPM, GAAP, Integrated Business Planning, Price Optimization, Profitability, SEC Software
It’s Past Time for the Next Generation of Business Planning
Posted by
Robert Kugel on Oct 11, 2013 12:17:50 PM
Business planning as practiced today is a relic, a process hemmed in by obsolete conceptions of what it should be. I use the term “business planning” to encompass all of the forward-looking activities in which companies routinely engage, including, for example, sales, production and head-count planning as well as budgeting. Companies need to take a fresh view of all these, adopting a new approach to business planning that while preserving continuity makes a substantial departure from what most companies do now. Currently, in most organizations the budget is the only companywide business plan. However, while necessary for financial management and control, budgets are not especially useful for running an organization.
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Topics: Big Data, Planning, Predictive Analytics, Sales Performance, Social Media, Supply Chain Performance, Office of Finance, Reporting, Budgeting, Controller, Operational Performance, Business Performance, Financial Performance, In-memory, Workforce Performance, CFO, Financial Performance Management, financial reporting, FPM, Integrated Business Planning
Many finance executives want to improve their department’s effectiveness in order to play a more strategic role in their company. However, frequently they find at least three serious challenges to achieving this sort of finance transformation. One is that too much time and resources are devoted to purely mechanical tasks. Another is that the information executives need is not always available immediately. A third is that they lack the data (which is unavailable or too difficult to access), the analytic tools or both to do rapid contingency planning. One area in the Office of Finance that needs particular attention is treasury, as I commented recently. Treasury management is a challenge because it’s highly detailed and demands complete accuracy. These requirements make it an area that can benefit from more automation.
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Topics: Predictive Analytics, Office of Finance, Controller, credit, debt, Kyriba Financial Performance Management, Analytics, Business Performance, Financial Performance, CFO, cash management
Along with other aspects of the finance organization, there’s increasing emphasis on having the treasury function play more of a strategic role in the organization. Typically, Treasury is charged with keeping track of and managing cash. Especially in larger organizations, this can be complicated because of multiple bank accounts, complex financing requirements and many methods of receiving and making payments; the complexity deepens when more than one currency is used across multiple jurisdictions, which also can pose regulatory issues. Treasury’s primary directive is to ensure that all funds are accounted for and that there is sufficient cash on hand each day to meet operating requirements. To accomplish this, finance professionals must perform key analytic tasks accurately to produce a clear picture of cash inflows and cash requirements. Analysis often is challenging because these numbers are constantly changing and because the process of collecting, analyzing and reporting all the data can be excessively time-consuming if done manually. This is a situation perfectly suited for dedicated applications that automatically manage the data needed to orchestrate treasury processes and provide analysis to inform decisions. Yet our benchmark research finds that more than half (56%) of companies with more than 1,000 employees either use spreadsheets exclusively or employ them heavily in conjunction with a treasury application.
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Topics: Predictive Analytics, Office of Finance, Controller, credit, debt, Analytics, Business Performance, Financial Performance, CFO, cash management, Financial Performance Management
For four years Adaptive Planning has been building out its cloud-based financial software. Starting with budgeting, planning and forecasting, it added analytics, data visualization, dashboards and alerting as well as flexible reporting and collaboration tools. It recently announced the general availability of consolidation functionality in its cloud-based suite. This addition eliminates a notable gap in the company’s functionality, giving it a more complete financial performance management suite. The addition of the consolidation capability should increase its appeal to larger companies and broaden usage within its existing customer base. According to Adaptive Planning, already about one-fourth of its customers are organizations or parts of organizations that have annual revenue in excess of US$500 million.
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Topics: Office of Finance, close, Consolidation, Controller, Business Performance, Cloud Computing, Financial Performance, CFO, Data, Financial Performance Management
I’m wondering whether the rapid rise in earnings restatements by “accelerated filers” (companies that file their financial statements with the U.S. Securities and Exchange Commission that have a public float greater than $75 million) over the past three years is a significant trend or an interesting blip. According to a research firm, Audit Analytics, that number has grown from 153 restatements in 2009 to 245 in 2012, a 60 percent increase. What makes it a blip is that the total is still less than half the number that occurred in 2006 as the Sarbanes-Oxley Act began to take effect. As well, the number of companies restating is still less than one percent of the total. Yet it’s a blip worth paying attention to, since the consequences of a restatement pose a serious professional challenge to finance executives. The right software can help address some of the underlying causes that lead to the need to restate earnings.
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Topics: Customer Experience, Governance, GRC, Office of Finance, Reporting, audit, close, Consolidation, Controller, Tax, XBRL, Business Performance, Financial Performance, Governance, Risk & Compliance (GRC), CFO, compliance, FPM, SEC
Using the Close as a Finance Department Diagnostic
Posted by
Robert Kugel on Dec 7, 2012 11:12:57 AM
Earlier this year we published our Trends in Developing the Fast, Clean Close benchmark research findings. The most significant was that, on average, it takes longer for companies to close their books today than it did five years ago. In 2007, nearly half (47%) we closing their quarters within five or six days, but now only 38 percent can do it as quickly.
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Topics: Office of Finance, close, closing, Consolidation, Controller, effectiveness, XBRL, Business Performance, Financial Performance, CFO, Data, Document Management, Financial Performance Management, FPM
Budget season is about to open at most companies that operate on a calendar year, so this is probably as good a time as any to rethink the process. Almost all companies will undertake the construction of a budget this year the same way they did it last year, despite widespread complaints that it is a monumental waste of time. One major reason why budgeting never changes is that it isn’t important enough to be worth serious rethinking. Another reason is that too many vested interests are aligned with the status quo, especially because compensation is tied to budgets. Despite this, I think companies can do better, evolving the process from a finance-centric activity to one that serves the needs of broader business interests as well.
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Topics: Big Data, Planning, Sales Performance, Office of Finance, Reporting, Budgeting, Controller, Operational Performance, Business Performance, Financial Performance, CFO, Compensation, cash management, FPM, Integrated Business Planning
Tagetik Offers a Suite Spot for Financial Performance Management
Posted by
Robert Kugel on Sep 5, 2012 11:49:54 AM
If you’re considering purchasing a financial performance management (FPM) suite, you shouldn’t overlook a recent entrant in the category, Tagetik (which sort of rhymes with “magnetic”). The company, which was founded in 1986 and is based in Lucca, Italy, began by focusing mainly on Europe, but has extended its efforts in the United States in the past two years. Tagetik 4.0 is an elegant implementation of a financial performance management suite running on Microsoft’s SharePoint infrastructure.
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Topics: Big Data, Planning, Office of Finance, Reporting, Budgeting, close, Consolidation, Controller, SharePoint, XBRL, Business Analytics, Business Collaboration, Business Performance, Dashboards, Financial Performance, Workforce Performance, CFO, Tagetik, FPM
People used to use the phrase “the last mile” solely to refer to a condemned prisoner’s path to execution. Then the telecommunications industry picked it up to describe that part of a circuit between a major trunk line and a subscriber. Later still a defunct software company, Movaris (now part of Trintech), used the phrase in an analogy to refer to the set of activities that take place between when a company closes its books and the point where it finishes its external reporting activities, such as disclosing periodic earnings and financial conditions to investors or filing financial statements with regulators or lenders. It was an attempt to focus attention on the need to automate and better coordinate the multiple, disparate but interconnected threads that have to be orchestrated to complete the external reporting tasks accurately and on time. Personally, I’ve never cared for the phrase being used in this context; there are really multiple “last miles,” with multiple and sometimes overlapping destinations. I prefer “the close–to-report cycle” because it’s more precise in its description, and because rather than pointing to finality, “cycle” defines it for what it is – a repetitive periodic activity. And because it is periodic and repetitive, it benefits from process optimization and automation, which can substantially reduce the effort required to complete a cycle and alleviate the stress certain departments often feel as deadlines loom.
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Topics: Customer Experience, Governance, GRC, Office of Finance, Reporting, audit, close, Consolidation, Controller, XBRL, Business Performance, Financial Performance, Governance, Risk & Compliance (GRC), CFO, compliance, FPM, SEC
What’s a fast, free and reasonably reliable way of gauging the effectiveness of a finance department’s management? It’s the number of days it takes it to close the books. Companies that take six days or fewer after the end of the period to close their monthly, quarterly or semiannual accounts demonstrate a basic level of effectiveness that those that take longer do not. In my judgment, finance executives should regard a slow close as a negative key performance indicator pointing to less-than-effective management on their part. I draw this conclusion from our recent benchmark research, which followed up similar research we completed in 2007.
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Topics: Sales Performance, Office of Finance, close, Consolidation, Controller, XBRL, Business Analytics, Business Intelligence, Business Performance, Financial Performance, Governance, Risk & Compliance (GRC), CFO, Data, Document Management, Financial Performance Management
For at least a couple of decades completing the financial close within five or six business days after the end of the period has been accepted as a best practice. As such, that creates an expectation that finance organizations that take longer should work to reduce their closing intervals. In updating our last benchmark research on the closing process, Ventana Research has found this not to be the case. In fact, the latest research shows that many companies are taking longer to close today than they did five years ago. Whereas nearly half (47%) were able to close their quarter or half-year period within six business days back then, just 38 percent are able to do so now. Similarly, five years ago 70 percent of companies were able to complete their monthly close in six days; today only half can. To be sure, closing quickly still gets lip service: The research confirms that most companies (83%) view closing their books quickly as important or very important. Yet far from demonstrating progress, the results show slow closers are regressing.
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Topics: Office of Finance, close, Consolidation, Controller, XBRL, Business Analytics, Financial Performance, Governance, Risk & Compliance (GRC), Information Management, CFO, Data, Document Management, Financial Performance Management
Time To Consider How Accounting Rules Changes Will Affect IT Systems
Posted by
Robert Kugel on Apr 1, 2012 11:17:25 PM
The evolution from United States Generally Accepted Accounting Standards (US-GAAP) to International Financial Reporting Standards (IFRS) has been under way for more than a decade. I’ve commented on IFRS adoption before. It’s a hot topic for accountants and auditors because it goes to the heart of how companies keep their books.
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Topics: Office of Finance, closing, Controller, FASB, IASB, IFRS, XBRL, financial performance, Analytics, Business Analytics, Business Intelligence, Business Performance, Financial Performance, Governance, Risk & Compliance (GRC), CFO, financial statement, GAAP, SEC
Data Plays a Key Role in the Close-to-Report Cycle
Posted by
Robert Kugel on Mar 22, 2012 9:08:56 AM
Ventana Research recently completed an update to our last benchmark research on the financial closing process. It shows that many companies are taking longer to close today than they did five years ago. Whereas nearly half (47%) were able to close their quarter or half-year period within six business days five years ago, just 38 percent are able to do so in our latest benchmark. Similarly, five years ago 70 percent of companies were able to complete their monthly close in six days; today only half can. The research confirms that most companies (83%) view closing their books quickly as important or very important. Participants acknowledge that they can do better, saying on average that their company can cut at least two days from both the monthly and quarterly closes. Moreover, the longer it takes their company to close, the more time participants think they could save.
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Topics: Office of Finance, close, Consolidation, Controller, XBRL, Business Analytics, Business Mobility, Business Performance, Cloud Computing, Financial Performance, CFO, Data, Document Management, Financial Performance Management
Ventana Research’s new financial close benchmark research reveals that many companies are taking longer to close today than they did five years ago. Whereas nearly half (47%) were able to close their quarter or half-year period within six business days five years ago, just 38 percent are able to do so in our latest benchmark. Similarly, five years ago 70 percent of companies were able to complete their monthly close in six days; today only half can. The research confirms that most companies (83%) view closing their books quickly as important or very important. Participants acknowledge that they can do better, saying on average that their company can cut at least two days from both the monthly and quarterly closes. And the longer it takes their company to close, the more time participants think they could save. Although there is some evidence that external factors such as economic and regulatory events have increased the workload in the close process, which in turn has extended some companies’ close period, I believe that organizations that take more than a business week to close their books have not made much effort to shorten the close, as I noted in a recent blog.
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Topics: Office of Finance, close, Consolidation, Controller, XBRL, Operational Performance, Business Analytics, Business Performance, Financial Performance, Workforce Performance, CFO
Slow Closers Aren’t Serious about Improving Financial Performance
Posted by
Robert Kugel on Mar 20, 2012 9:31:17 AM
The most intractable issues that face finance departments are those that “everyone” knows must be addressed but somehow never muster the collective urgency to do so. Many couch potatoes know they need to watch their diet and exercise regularly. If asked, they would say it’s important or even very important. Yet there they sit. Based on our newly completed benchmark research “Trends in Developing the Fast, Clean Close”, it appears that closing falls into this category. This is especially true for companies that are slow closers, by which we mean those that take more than five or six business days (essentially one business week) to complete their monthly, quarterly or, for those that publish their financial statements only twice yearly, semiannual close. Our research shows that in general there has been no progress in achieving fast closes – indeed, there’s been some backsliding – over the past five years and, indeed, since our initial research on this subject in 2004.
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Topics: Office of Finance, close, Consolidation, Controller, XBRL, Operational Performance, Business Analytics, Business Performance, Financial Performance, Workforce Performance, CFO
GAAP and IFRS Harmonize Revenue Recognition Standards
Posted by
Robert Kugel on Feb 21, 2012 10:50:37 AM
The melding of the world’s two main financial accounting standards – United States Generally Accepted Accounting Standards (US-GAAP) and International Financial Reporting Standards (IFRS) – continues apace. Initially, the idea was to converge the two into a single, global standard. Although there was general agreement that the concept was a noble one, there were enough differences to produce practical concerns about implementing these changes, especially in the United States. Then, in December 2010, the U.S. Securities and Exchange Commission (SEC), which mandates accounting standards for publicly traded companies, indicated that while in principle it favors a single international accounting standard, the Commission was going to take a “condorsement” approach, which I covered in a note last year. The SEC’s move essentially derailed the prior objective of replacing US-GAAP with IFRS by the middle of this decade. Still, the coming together of US-GAAP and IFRS continues to forge ahead even without acceptance of full adoption in the U.S. The two bodies that administer accounting standards, the Financial Accounting Standards Board (FASB), which manages US-GAAP, and the International Accounting Standards Board (IASB), which manages IFRS, are attempting to standardize wherever possible and harmonize as best they can elsewhere. One important area where there’s been significant progress is revenue recognition.
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Topics: Office of Finance, Controller, FASB, IASB, IFRS, XBRL, Financial Performance, CFO, financial statement, GAAP, SEC
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