Change will clearly be the mantra for business in 2017, given the new administration coming into power in the US and other geo-political changes around the world.
But what are some of the latest trends in Finance and enterprise performance management (EPM) that organizations can take advantage of this year to help them better adapt to change?
To help answer that question, Host Analytics invited Craig Schiff, CEO of BPM Partners, an advisory services firm that helps clients address their performance management challenges, to join us on a webinar titled: “5 Predictions That Will Transform the Finance Function in 2017.”
Drawing from the 2016 Pulse Survey by BPM Partners and client engagements, Craig reviewed key finance and performance management trends from 2016 and made predictions on what to expect in 2017. Here’s a summary of the 5 predictions Craig highlighted for 2017:
5 Predictions That Will Transform Finance in 2017
Prediction #1 – The Evolving Role of Excel
While 25% of companies surveyed still use Excel as their primary tool for budgeting and planning, a large percentage (46%) are dissatisfied with Excel as their solution. Conversely, only 12% of respondents using EPM/BPM applications are dissatisfied. When asked why they are dissatisfied, 74% cited said the process takes too long, and that it was labor-intensive.
As a result, most organizations are moving away from spreadsheet-based systems for budgeting and reporting and there’s decreasing demand for Excel as the primary interface. This trend is driven mostly by the expansion of EPM beyond Finance. At the same time, there’s increasing demand from users to integrate their EPM/BPM systems with Excel and rest of Office suite as a front-end for reporting, analysis, and alternative data input.
Prediction #2 – EPM Moving into Operations
In the 2016 BPM Pulse survey, when asked about the importance of integrated business planning (IBP), which integrates strategic and financial plans with operational planning, 61% said this was essential to their business. Key functions that need more support included Sales (66%), Services (38%), HR (34%) and Marketing (31%).
The results of the survey indicate that an operational focus for EPM is growing in importance. Manufacturing companies are leading the way and a subset of vendors are moving to address this need. For some projects this is a second phase component, with financial and strategic planning getting the most focus. And for some FP&A led projects operational needs continue to be out of scope.
Prediction #3 – The Growing Importance of Modeling
According to the BPM Pulse Survey, Modeling is moving up the priority list for EPM capabilities. Modeling is now the third most in-demand requirement, following Budgeting/Forecasting and Financial Reporting. Robust modeling is a top requirement in many projects, especially in increased times of uncertainty. Key capabilities include driver-based planning and scenario modeling. One of the key user requirements is for easier model design and creation, which will certainly drive expanded adoption of these capabilities.
Prediction #4 – Expanded Use of Mobile Access
Interest in mobile capabilities in EPM processes is on the rise, with 46% of respondents saying they need mobile in their performance management solutions in 2016. Key capabilities include mobile support for published reports (79%), performance dashboards (74%), workflow and approvals 49%.
Demand for mobile has held steady and is rising slowly in Finance. The main focus is still on consumption of information, and this is driven mainly by senior management. Mobile capabilities are having an impact on the vendor selection decision.
Prediction #5 – Increasing Adoption of Cloud Solutions
In the BPM Pulse survey for 2016, 24% of respondents indicated they have already deployed a cloud-based solution. A solid 41% said they are evaluating cloud-based solutions, and another 28% said possibly in the future. Only 7% of respondents said they would not consider cloud solutions, which is down from 13% in the 2015 survey.
Cloud-based EPM/BPM has become mainstream. It’s the preferred deployment model in midmarket companies, and is increasingly being accepted in larger organizations. All of the key vendors offer some form of cloud solution, but buyers should beware. All cloud solutions are not alike, so make sure you understand which model the vendor is offering – i.e. hosted, single-tenant, or multi-tenant cloud.
Expected Impacts on Organizations
The 5 predictions that Craig Schiff reviewed on the webinar will have a number of impacts on Finance and organizations in general in 2017. Host Analytics VP of Product Marketing, John O’Rourke, highlighted the following in the webinar.
- The Evolving Role of Excel – reducing reliance on Excel for EPM processes and adoption of EPM applications will help accelerate planning and reporting, improve accuracy, and provide better controls and audit trails on financial results.
- EPM in Operations – the extension of EPM applications into operations will help Finance become a better business partner. It will also help drive more ownership and accountability in line management for plans and forecasts and will drive better Finance – Operations alignment.
- The Importance of Modeling – the reduced reliance on Excel and adoption of EPM-based modeling applications will help increase accuracy of scenario models and forecasts. It will improve business agility and also drive better alignment of financial and operational plans.
- Expanded Use of Mobile EPM – the expanded use of mobile technology in EPM will promote self-service data access, provide anytime, anywhere access to information and improved user productivity.
- Increasing Adoption of Cloud EPM – last but not least, the increasing adoption of cloud-based EPM solutions will accelerate deployments of new applications, reduce costs of ownership, and make upgrades to new releases much easier.
Revamping key Finance processes and leveraging technology can provide enhanced the agility needed by organizations to adopt to the changes impacting them in 2017. To learn more, watch a replay of the webinar “5 Predictions That Will Transform Finance in 2017.”