Leaders of the Pack: Practices That Streamline Financial Processes Lisa Higgins is the chief operating officer of the APQC. She has led several APQC departments since she joined the organization in 1993. She has served on the APQC’s executive team since 1995. by Lisa Higgins 18 Business Performance Management November 2005 As frustrations with planning, budgeting, and forecasting processes mount, the APQC set out to determine whether leading practices can shorten these cycles. C ONSULT ANTS TALK perpetually about best practices. For managers listen- ing to them, the obvious response is to ask, “But what is the business value of these practices?” It’s not logical to undertake a major software upgrade or process reengineer- ing project if you’re not confi- dent that you’ll achieve tangible returns from your investment. So the APQC, an independent nonprofit dedicated to corpo- rate performance benchmark- ing, conducted a survey with the help of IBM and Business Finance to find out whether today’s most popular business performance management (BPM) “best practices” are yielding results. What’s Wrong With BPM? Many companies are highly dissatisfied with both the process- es involved in and the results derived from their planning, bud- geting, and forecasting efforts. Our survey asked respondents to evaluate their processes through a series of quantitative and qual- itative questions. Some of their answers are compiled in exhibit 1, at right. A large proportion of respondents leveled fairly harsh crit- icisms at their BPM processes, saying that budgeting is mainly a number-crunching exercise (47 percent), that the plan is not clear- ly linked to strategy (56 percent), or that technology makes the process neither faster nor more effective (63 percent). Many respondents are also dissatisfied with the timeliness of their budgets and plans. Forty-six percent said that their budget quickly becomes outdated, yet only 40 percent said that the plan is regularly updated during the year. This isn’t surprising in light of the amount of time companies are spending on the budgeting process. When we asked each respondent how long it takes his or her company to prepare its annual budget, the median response © 0 0 5 J O E L N A K A M U R A C / O T H E I S P O T . C O M
