September 2003

Shorter Cycles, Increased Demands Influence How CFOs Meet New Objectives
By Brian Hartlen

According to a recent survey of financial executives conducted by CFO Research Services and Comshare, Inc., 89% of finance executives surveyed said their CEO wants the finance function to provide analysis of business unit performance on demand, yet only 57% have the capability to do so. In addition to the CEO, regulators and shareholders are placing increased pressure on CFOs to deliver more information in less time. To comply, CFOs are modifying their approach to traditional management processes, and budgeting is often the first process transformed.

Historically, the typical budget cycle takes 12 months to complete, yet is often obsolete within six months. Together with shortened sales cycles (today, most companies are unwilling to commit to a sale far in advance), CFOs must rein in the lengthy budgeting process and be able to reforecast more frequently as sales commitments come in throughout the year. For today’s finance executive, the objective is to provide more information, that is more accurate, in less time.

Unfortunately, many organizations find implementing rolling forecasts too challenging, and asking staff to assemble a budget in less time seems out of reach.

However, with corporate performance management (CPM) technology, companies can significantly reduce the amount of time spent on budget development while creating a rolling forecast system that can easily be done quarterly or more frequently. Computer Associates implemented a CPM system that helps them create a monthly revised forecast through the end of the year based on actual results. In addition to being done faster, their budget is more accurate and is tightly linked to its strategic plan. Using a CPM system, the organization gives budget development responsibilities to operating units, which has an added side benefit of creating more accountability for meeting performance targets.

Although most organizations have cut back on staff and operations, they are still expected to function at the same level. Without top-line growth, CEOs are looking to trim costs while relying on finance staff to provide more analysis. The ability to perform “what if” analyses, view business from multiple perspectives (e.g., product, customer, region, etc.), and generate statistical forecasts can help many organizations weigh strategic alternatives, create contingency plans, and trim expenses.

Although timely and insightful analysis is an important objective for CFOs, achieving it can be difficult. Many companies have become experts at data collection but do not have the resources necessary to usefully analyze it.

Brian Hartlen is senior vice president, marketing, for Comshare, Inc. (

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