The State of Corporate Performance Management

How long does your planning process last? Do you link compensation to planning objectives? Can you perform rolling forecasts? Our recent survey addresses these and other planning, budgeting and forecasting questions to assess the current state of corporate performance management.

When employees walk into the office of James Ryan, CFO of Calence Inc., a company that builds and manages networks in Tempe, Ariz., they're greeted by a white board drawing of a pyramid. The word "knowledge" occupies the top third of the pyramid; it's supported by "data" in the figure's midsection and "process" at its base.

"Everyone wants to rush to the knowledge at the top of the pyramid," says Ryan, "but you've got to drive the process to capture the data first." That wisdom underlies Calence's integrated approach to planning, budgeting and forecasting. It also defines the core strategy supporting successful corporate performance management strategy at leading companies.

To plumb the current state of corporate performance management, Business Finance and OutlookSoft Corp. conducted a survey that explored how organizations manage their planning, budgeting and forecasting processes (see Survey Methodology on page 43). In addition to polling respondents on standard benchmarks such as planning frequency, staff size and closing time, the survey asked whether they use rolling forecasts, what they find to be the weakest links in their company's planning capabilities and how their organization selects key performance indicators (KPIs).

The survey results reveal that despite an increase in the use of budgeting and forecasting technologies, the overarching challenge for companies remains the maturation of the planning culture. That responsibility rests with the CFOs, who should understand the forces bearing down on corporate performance management as they seek to strengthen their company's planning, budgeting and forecasting processes.