Robert Kugel's Analyst Perspectives

Data Plays a Key Role in the Close-to-Report Cycle

Posted by Robert Kugel on Mar 22, 2012 9:09:23 AM

Ventana Research recently completed an update to our last benchmark research on the financial closing process. It shows that many companies are taking longer to close today than they did five years ago. Whereas nearly half (47%) were able to close their quarter or half-year period within six business days five years ago, just 38 percent are able to do so in our latest benchmark. Similarly, five years ago 70 percent of companies were able to complete their monthly close in six days; today only half can. The research confirms that most companies (83%) view closing their books quickly as important or very important. Participants acknowledge that they can do better, saying on average that their company can cut at least two days from both the monthly and quarterly closes. Moreover, the longer it takes their company to close, the more time participants think they could save.

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Topics: close, Consolidation, Controller, process management, report, XBRL, Business Analytics, Business Mobility, Cloud Computing, Accounting, Business Performance Management (BPM), CFO, Data, Document Management, Financial Performance Management (FPM), Financial Performance Management

Process Improvement Is Key to a Faster Close

Posted by Robert Kugel on Mar 21, 2012 11:43:46 AM

Ventana Research’s new financial close benchmark research reveals that many companies are taking longer to close today than they did five years ago. Whereas nearly half (47%) were able to close their quarter or half-year period within six business days five years ago, just 38 percent are able to do so in our latest benchmark. Similarly, five years ago 70 percent of companies were able to complete their monthly close in six days; today only half can. The research confirms that most companies (83%) view closing their books quickly as important or very important. Participants acknowledge that they can do better, saying on average that their company can cut at least two days from both the monthly and quarterly closes. And the longer it takes their company to close, the more time participants think they could save. Although there is some evidence that external factors such as economic and regulatory events have increased the workload in the close process, which in turn has extended some companies’ close period, I believe that organizations that take more than a business week to close their books have not made much effort to shorten the close, as I noted in a recent blog.

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Topics: Operational Performance Management (OPM), close, Consolidation, Controller, process management, report, XBRL, Business Analytics, Accounting, Business Performance Management (BPM), CFO, Financial Performance Management (FPM), Workforce Performance Management (WPM)

Slow Closers Aren’t Serious about Improving Financial Performance

Posted by Robert Kugel on Mar 20, 2012 9:31:38 AM

The most intractable issues that face finance departments are those that “everyone” knows must be addressed but somehow never muster the collective urgency to do so. Many couch potatoes know they need to watch their diet and exercise regularly. If asked, they would say it’s important or even very important. Yet there they sit. Based on our newly completed benchmark research “Trends in Developing the Fast, Clean Close”, it appears that closing falls into this category. This is especially true for companies that are slow closers, by which we mean those that take more than five or six business days (essentially one business week) to complete their monthly, quarterly or, for those that publish their financial statements only twice yearly, semiannual close. Our research shows that in general there has been no progress in achieving fast closes – indeed, there’s been some backsliding – over the past five years and, indeed, since our initial research on this subject in 2004.

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Topics: Operational Performance Management (OPM), close, Consolidation, Controller, process management, report, XBRL, Business Analytics, Accounting, Business Performance Management (BPM), CFO, Financial Performance Management (FPM), Workforce Performance Management (WPM)

SAP Rolls Out Business Planning and Consolidation on HANA at SAPinsider

Posted by Robert Kugel on Mar 19, 2012 10:42:24 AM

For me, the most significant announcement to come out of the recent SAPinsider conference was the company’s formal release of Business Planning and Consolidation (BPC) running on HANA, SAP’s in-memory computing appliance. For me, HANA is a potential “game changer” for planning, statutory consolidation and other analytics-supported financial processes because of the substantial reduction it enables in processing time from loading to reporting. In-memory systems provide a substantial edge in speed of processing large data sets or complex calculations, whereas the latency between thought and answer in complex scenario analyses on disk-based systems often prevents a collaborative dialogue around possible situations and their potential outcomes. Today, companies have to simplify the analysis, severely limit the amount of detail or find some combination of the two. More than likely, they wind up not having a potentially valuable collaborative dialogue in activities such as weekly or monthly review and revision of operating plans and their financial consequences, closing the books or assessing the impact of pricing changes on profitability. In the case of planning, I expect that in-memory systems will enable make it easier for companies to make changes to detailed plans (such as the budget or production plans), which is difficult today for many of them.

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Topics: Big Data, Planning, SAP, Social Media, ERP, forecasting, GRC, Mobile Computing, Operational Performance Management (OPM), Budgeting, IFRS, process, shared services, XBRL, Analytics, Business Analytics, Business Collaboration, Business Mobility, Cloud Computing, In-memory, Accounting, Business Performance Management (BPM), finance, Financial Performance Management (FPM), Sales Performance Management (SPM), Supply Chain Performance Management (SCPM), Workforce Performance Management (WPM), Financial Performance Management, GAAP, HANA

Don’t Treat Real Estate as a Fixed Cost

Posted by Robert Kugel on Mar 15, 2012 11:28:12 AM

Financial analysts typically classify real estate as a fixed cost. Strictly speaking, that’s correct, but looking at it this way leads many organizations to overlook and miss opportunities to more carefully manage their real estate and other occupancy expenses. In industries where occupancy or ownership costs account for more than 20 percent of total business expense, taking a more active approach to managing real estate and occupancy can improve a company’s profitability. But in most cases achieving a higher return from money spent on corporate facilities requires some organizational and process changes.

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Topics: Performance Management, Operational Performance Management (OPM), lease, real estate, shared services, Business Analytics, Business Performance Management (BPM), CFO, Financial Performance Management (FPM), Financial Performance Management