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How the New Obama Administration Might Impact Business Performance Management

Originally published November 12, 2008

I’m sure that all have already read about families that are stocking up on their guns and ammo in expectation of toughening gun laws with the new administration. I have also spoken to friends looking to accelerate financial transactions before the close of 2008 in expectation of changes in capital gains taxes in 2009. Although I have no crystal ball to substantiate whether buying your guns today or taking that financial gain before December 31 will help or hinder you in the future, I am confident that there will be changes made by the new administration that will have an impact on your business performance management (BPM) investments going forward.

Platform of “Change”

Something that became clear toward the latter parts of the campaign from both parties – and has since been magnified by the financial crisis – is that 2009 will look very different from a perspective of corporate plans and forecasts. The challenging part is that the pundits are not sure when “the bottom” will be reached – with optimists targeting June of 2009 and pessimists now projecting toward late 2010 and beyond.

Regardless of timing, if you are going to be running any kind of a business during this cycle, you will need to have a robust platform for planning for the twists and turns on this economic road. I know that many will think that they can monitor fluctuating oil prices, currencies and credit rates in their trusty Excel spreadsheets; but for true collaborative enterprise planning and modeling, with advanced analytics that can be run by less spreadsheet savvy general managers, you should likely revisit your planning and reporting platform. In many cases, this may require simply upgrading to the current version of your performance management software vendor’s modeling platform. However, if you are still doing the bulk of your modeling and planning in spreadsheets, this may be the time to consider a more enterprise-grade solution. Also note that several of the leading vendors, as well as a few innovative new vendors, are developing “planning-specific” functionality in their product – different from traditional budgeting. Planning often involves fewer (yet more senior) resources and requires the ability to model and save a variety of scenarios while enabling collaboration amongst the team for detailed business discussions on these scenarios.

Increased Regulation – Sarbox II on the Horizon?

Both presidential candidates agreed that the new administration will need to usher in new regulations to help avoid similar financial crises in the future. Although we do not yet know what those regulations will look like, I am confident that their themes will heighten the need for enhanced transparency and audit ability in how companies report financial information. Much of this was accomplished with the first round of Sarbanes-Oxley legislation, but there are still companies that have taken a “duct tape” approach to improving their reporting systems. There are many companies that commit recurring audit resources to decipher a company’s financial statements by looking back at historic reports on a reactive basis. Companies looking to reduce that annual auditor spend can consider upgrading technology to assure that proactive audit ability and transparency are standard practice and an integral part of their reporting systems going forward.  

The Impact of Corporate Sustainability

In an earlier article, we have noted how several of the leading vendors have embarked on providing systems for “green BPM” – but I would bet that many companies still look at such an investment as a “nice to have” in terms of priority in their organization. Although it is probably not on the top of the agenda for the first 100 days of the new administration, it is likely that somewhere in the first term we will see legislation to hold corporations more accountable for their carbon footprint. At a minimum, companies may be required to start to report on their environmental impact in more detail. It will probably be worth becoming more familiar with how some organizations have taken steps to improve their sustainability and to have a conversation with your enterprise software vendor to determine how your existing platform could be configured to help in this area of increasing visibility.

Although none of these changes should come as a surprise, each is worth considering as you prepare your 2009 BPM plans. The 2008 election was a campaign of change for both the executive and legislative branches of the U.S. government; now it is up to BPM professionals to find a way support that change from a software and systems perspective.

If you are interested in seeing how your company compares to your peers and have your voice heard regarding satisfaction for your new or existing performance management or business intelligence vendor, please participate in the 2009 BPM Pulse Survey. All accepted participants will have a chance to win an Apple iPod touch and receive an executive summary of the 2009 results when available.

  • John ColbertJohn Colbert
    John, Vice President of Research and Analysis at BPM Partners, is responsible for market trend analysis, services development and technology vendor relationships at BPM Partners, the leading independent authority on business performance management (BPM) solutions. Prior to BPM Partners, John was Senior Director, Product Marketing at Hyperion Software, responsible for directing Hyperion's OLAP Business Analysis financial software products. Earlier in his career, John was an end user of performance management solutions while a product manager at Raychem Corporation, a Fortune 500 company that has since been acquired by Tyco. John has contributed to many publications including the New York Times, BPM Magazine, Information Week, Business Finance and eWeek, and he is a regular presenter at performance management related conferences and web seminars.

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