We’ve written frequently about the Office of the Few – the notion that finance offices traditionally have concentrated planning, budgeting, forecasting and analytics into a small, highly trained group of experts using older, arcane legacy software. We’ve argued that in a today’s real-time world, the Office of the Few is unsustainable. It slows vital processes, cuts off communication, hobbles collaboration, and prevents managers across the company from understanding the implications of their actions before they act. It is the exact opposite of aperformance-driven culture.
Now, a new research report from Harvard Business Review casts a bright spotlight on that very argument. The report, “Transformational Journeys: Modern Business Planning,” is the result of extensive independent research, numerous detailed interviews with third-party industry analysts and stakeholders in finance, as well as an HBR-led survey of more than 400 decision-makers. For HBR to capture the real-world experiences of financial planning and analysis (FP&A) practitioners in the digital age, we partnered with them to provide their researchers with access to a representative sample of our customers. HBR then dispatched its writers to work with those researchers to develop a detailed, 15-page study of how today’s always-on technologies are triggering a change not just among Tidemark customers, but among all enterprises.
The HBR report illustrates how organizations may suffer when finance-driven business planning processes are isolated from the rest of the business – and at the very moment that “companies need more access to information, not less.”
For companies to keep pace at a time when data constantly flows into enterprise systems from both internal and external sources, financial planning and analysis (FP&A) must extend to business users whose daily actions and decisions influence expenses, revenues and margins.
As HBR’s research indicates, this is no small task and legacy FP&A applications aren’t up to enabling it: “Complex, cumbersome and opaque, conventional finance systems discourage collaboration and underscore the organization’s distance from the rest of the enterprise.”
HBR notes the way to unlock business planning is through a new generation of born-in-the-cloud FP&A applications. These modern solutions harness the very technologies shaping business today – cloud, social, big data and mobile – to help companies meet their organizational goals. (See graphic.)
Customer Profiles Prove the Concept
As we mentioned, several Tidemark customers were selected and profiled in the report, including Brown University, which discovered after moving its financial management processes to the cloud in 2013 that its existing budgeting software wouldn’t integrate with Workday Financial Management. The transformational journey that led Brown University to Tidemark was focused on making the budgeting process easier not just for those in the department, but anyone who participated in budgeting. The higher-education institution can now aggregate data from multiple users into one unified planning process and operating budget.
Then there’s HubSpot, whose ingenious marketing and sales platform has proven such a hit with customers that the company’s rapid growth made it difficult for executives to continue to plan headcount and financials using Excel spreadsheets with time consuming processes.
As a SaaS provider itself, HubSpot didn’t need to be sold on the advantages of the cloud. Like Tidemark, they are a cloud-first company. HubSpot’s choice to transform their FP&A processes resulted in a more flexible, seamlessly integrated environment for tracking expenses, developing forecasts, and anticipating the bottom-line impact of new hires.
Five years ago, we founded Tidemark with the vision to reimagine what a modern FP&A organization can accomplish in the digital business era. It is our hope that by sharing this report and the set of best practices with practical examples, it will prove enormously useful to your own transformation away from the Office of the Few.
Download the free research report here.