Budgeting, planning, and forecasting in today’s volatile business environment is a challenging task. Trying to manage these processes using spreadsheets in a dynamic and growing enterprise makes the process even harder.
Organizations that adopt packaged applications for these tasks are able to streamline FP&A processes and improve accuracy. But a recent survey and report by Aberdeen Research found that organizations that adopt cloud-based FP&A applications are able to achieve even more gains than those using on-premises applications.
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Meeting Today’s Planning Challenges
In the February 2016 Aberdeen Research Report titled “Deploy Your FP&A Solution in the Cloud to Keep Your Budgets and Forecasts Grounded in Reality,” the #1 planning challenge cited by respondents was market volatility – 49% of respondents cited this, which creates the need to dynamically account for change. The next highest response (29%) was poor communication, coordination, and collaboration.
The volatility challenge cited in the survey highlights the need for instant access to relevant data in the planning and forecasting process. Without access to timely data, plans and forecasts can quickly become irrelevant. Improved communication and collaboration are necessary because of the differing views of the business that exist in corporate functions vs. departments and lines of business. In order to reconcile these views, collaboration must be improved.
Leaders Are Adopting Cloud-Based FP&A Solutions
In its research report, Aberdeen groups respondents into two classes. This includes Leaders, which are the top 35% based on their performance, and Followers, which are the bottom 65%. What Aberdeen found is that Leaders are 61% more likely to have deployed packaged CPM/EPM solutions for budgeting, planning, and forecasting. Moreover, Leaders are 53% more likely to have adopted cloud-based CPM/EPM applications for budgeting, planning, and forecasting.
Those respondents who adopted cloud-based solutions were able to achieve additional benefits vs. those using on-premises solutions:
- Real-time updates to financial metrics
- Improved monitoring of business milestone achievement
- Self-service reporting by business users
- Enterprise-wide collaboration across departments
- Improved communication with stakeholders and more accountability
Real-World Business Results
In conclusion, Aberdeen Research found that organizations that adopted cloud-based solutions for FP&A achieved significant business benefits over those with on-premises solutions. These include more accurately informed and faster decisions, faster budgeting and forecasting cycles, and more accurate plans and forecasts.
To dig into the details and learn more about these survey results, download the free Aberdeen Research report titled “Deploy Your FP&A Solution in the Cloud to Keep Your Budgets and Forecasts Grounded in Reality.”