Part 2 in a 2-part series. Read Part 1.
In Part 1 of this series, we explored a new study by Ventana Research showing that collaborative enterprise planning is taking off as a best practice among leading finance organizations. This blog expands further on the study’s findings, exploring why the right technology is necessary to enable this approach.
Ventana’s “Collaborative Enterprise Planning: Improving the Business Value of Planning and Budgeting Across the Enterprise” reveals that, while leading organizations have the necessary infrastructure in place, many others are lagging behind. In fact, the preferred method of planning continues to be spreadsheets – two-dimensional grids that might suffice for accounting, but aren’t up to the task of cross-enterprise planning. The research notes that use of spreadsheets, which is notoriously time-consuming, also inhibits integration of key data across domains – customers, channels, products, and regions, for example.
Here are some key takeaways from the study.
A common planning platform delivers decision support faster
Ventana’s industry report reveals that one of the C-suite’s top struggles is gaining clear, up-to-date information to support strategic business decisions – typically the result of disparate technologies and siloed departments.
How are industry leaders moving beyond these limitations to connect lines of business? The report shows that these enterprises are using a single platform for planning. With one platform, departments can link data and provide management with a single source of the truth. Plans can reflect both operational and financial data to create hybrid key performance indicators, far more valuable for decision support than isolated KPIs.
All executives know that data is power, but Ventana’s research shows that leaders understand that it’s access to actionable data insights that determines the competitive edge.
Linking information improves planning results
Ventana’s research shows that many organizations don’t link plans across lines of business. Despite study after study revealing the importance of integrated planning, many organizations continue to resist change, remaining with tried-and-true but outdated technology.
According to Ventana’s research, here’s how companies that take a collaborative approach compare to those that don’t:
- Two-thirds (66%) of companies that link plans directly have a planning process that works well, compared to 40% that copy data from individual, isolated plans. Only 25% that have little or no plan linkage are satisfied with the process.
- 78% of businesses that plan by directly linking plans across lines of business are satisfied with their planning process. That compares to those that use summarized information, of which only 50% are satisfied with their process.
The surprising thing that Ventana Research found is that most CFOs know that linking their plans across the business is important to the success of their strategies, even if they don’t do it.
- 63% of companies say linking plans directly is important or very important to improving performance.
Dedicated planning and budgeting software improves agility
Ventana’s research shows how using dedicated applications for planning and budgeting has a significant impact:
- 62% of businesses using dedicated applications say that it’s easy or very easy to link plans, whereas only 29% of businesses that use spreadsheets report that it’s easy or very easy to link plans.
- 59% of businesses using dedicated applications can drill down into plan details either immediately or within an hour or two of a review meeting, versus 36% of those that use spreadsheets.
While all business managers know that agility is essential to keep up with competitive market dynamics, Ventana’s research highlights that the leaders are achieving speed and agility with modern technology enabling collaborative planning. Organizations can deliver decision support faster with data from across the enterprise. They can improve accuracy by making refinements and adjustments at shorter intervals. The focus shifts away from summaries to analyses of what just happened, allowing organizations to create actionable strategic plans.
Find out more
Learn more about collaborative enterprise planning in this paper by Ventana Research, “Collaborative Enterprise Planning: Improving the Business Value of Planning and Budgeting Across the Enterprise.”