Although here at BPM Partners we would like to think that our annual BPM Pulse Survey is a great starting summary for performance management trend information, we recognize that other surveys continue to provide an interesting lens to view market trends, economic perspectives and technology adoption. Two recent examples include the BPM Forum’s Performance and Planning Poll 2009 (sponsored by Adaptive Planning) and BPM Partners’ new Budgeting, Planning and Analysis Survey 2009 (sponsored by PROPHIX). The BPM Forum/Adaptive Planning survey focused on the impact of the economic downturn, while the latest BPM Partners/PROPHIX survey addressed the different perspectives of mid-market companies that adopt packaged budgeting and planning packages versus those that continue to rely on stand-alone spreadsheets to support their planning processes.

In the BPM Forum poll of nearly 200 financial professionals from more than 20 different industries, 53% of participants reported that financial conditions are worse now than six months ago, a strong improvement from the 86% that reported things were worse in a poll taken just 3 months earlier. In addition, 48% of respondents said that they expect conditions to improve in the next six months, a response 3 times greater than from those who were asked the same question last quarter. One can interpret this data to mean that the economic downturn is at or approaching its bottom, and the debate you hear from many economists is whether this is a “V” downturn or a “U” downturn, the shape of the letter signifying whether it will be a sharp recovery or a more gradual recovery. From the survey respondents, 37% predict the turnaround will start in 2009 and an additional 44% estimate a recovery in the first half of 2010. The study results were also optimistic on the general market’s growth prospects, with 50% predicting revenue growth over the next six months (vs. 18% last quarter) and 34% seeing growth in profit margins (vs. 5% last quarter).

In terms of how companies are handling this period of uncertainty, many are participating in higher levels of re-planning and re-forecasting. A majority of the respondents missed their revenue plans last quarter, and 28% re-planned, re-forecasted or created what-if scenarios three or more times last quarter – twice as many as did so in the fourth quarter of 2008. In addition, 50% expected to perform additional re-planning and what-if analyses going forward. That said, 45% of respondents are confident that they will hit their forecasts going forward, up from 33% last quarter. Finally, 45% of responding companies reported that they formally benchmark their company’s performance against that of their peers, but 78% are interested in understanding how their peers are forecasting key performance metrics (changes in revenue, expenses, etc.)

Changing perspectives over to the new BPM Partners/PROPHIX Budgeting, Planning and Analysis survey, 54% of 211 small to mid-sized companies that responded to the survey continue to handle budgeting through spreadsheets and other manual processes, while an additional 15% use a part of their accounting system to support the process. Only 26% are using a purpose-built budgeting application to support this important process. This new survey was recently closed, but we can share some initial results with our readers. You can get an additional summary from the BPM Partners website when complete or you can pre-register for the full report at the PROPHIX website.

When asking the spreadsheet users what their largest problems are with their current approach, 67% responded that these processes take too long, vs. 49% of respondents that are using an analytic application. It is also interesting to note that 55% of spreadsheet users feel they do not have enough time to analyze their data, vs. 74% of analytic application users who are seeking more time to do analysis. At first this may seem counter-intuitive, but with further consideration it seems that analytic application users are probably spending less time collecting and validating their data, and more doing analysis – and once they have a taste of the analysis capabilities, they seem to want more time.

Finally, when asked whether users of these systems felt confident that they have a budgeting, planning and forecasting function that will effectively support future growth, 66% of analytic application users responded positively, while only 31% of spreadsheet users had the same confidence.

For more information on the above surveys, please refer to the Adaptive Planning website and the PROPHIX and BPM Partnerswebsites. Final survey results for the PROPHIX-sponsored research are expected in the coming weeks, but you may pre-register for a copy of the report at the PROPHIX website.

Recent articles by John Colbert

• New Research on Spreadsheet Usage for Budgeting and Planning in Midsize Organizations
• Extending Your Business Performance Management Initiative with Profitability Analytics, Part 1
• Performance Management in Turbulent Times
• Defining and Using Key Performance Drivers