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Capital Planning Processes Burdened with Risk and Complexity, New Financial Executives Research Foundation Study Reveals

Groundbreaking Industry Survey: Finance points to inability to prove investment ROI, maximize opportunities and make investments with confidence

Austin, TX — January 23, 2012 — Finance departments in global enterprises suffer from a serious visibility gap into their capital expenditures and are lacking the ability to fully track return on investments, according to a new report published today by Planview. Conducted by the Financial Executives Research Foundation (FERF) and Appleseed Partners, the survey of nearly 130 finance executives at leading North American companies reveals that the finance function relies overwhelmingly on spreadsheets and manual, non-integrated processes to manage enterprise long-range planning. Respondents indicate the result of this approach is added complexity, and lengthy and expensive planning cycles with increased risk.

The News

In the third quarter of 2011, Planview commissioned a study focused on the state of long-range financial planning for capital and major investments at large enterprises. Conducted by third-party consulting and research firms Appleseed Partners and FERF, the research affiliate of Financial Executives International (FEI), the study surveyed capital planning decision-makers from a range of industries. Planview released the findings in the new Capital Planning Benchmark Study, which includes analysis of both in-depth interviews and online surveys. The full report is available here: Capital Planning Benchmark Study.

Key Takeaways

This first-of-its-kind study of senior financial executives reveals that nearly half of the respondents identified similar risks and pain points. Eighty-percent signaled they leverage manual approaches in planning capital expenditures.

  • Respondents cite their Top Three Risks:
    • Inability to track affordability and ROI
    • Inability to maximize opportunities, resources and budgets
    • Making the wrong investments
  • Respondents cite their Top Three Pain Points:
    • Manual nature of planning and its complexity
    • Understanding the impact of a changing business climate
    • Lack of visibility into performance

What We Say

"The survey found an increasing trend toward more continuous planning. Finance executives are striving to be responsive to market conditions. Yet, there is a struggle to get a comprehensive view of investments and measure ROI," said Linda Roach, vice president of marketing and executive sponsor of the survey, Planview. "Companies need a solution that supports their new way of working and planning."

"As competitive pressures continue to intensify, we expect senior financial executives will consider new technologies that are available to make the planning process more effective and efficient," said Marie Hollein, president and CEO of FEI.

"Long-term financial planning is changing, but the technologies and ways portfolios of investments are managed rely on tools that are decades old," said Maureen Carlson, partner, Appleseed Partners. "It's clear from the results that many leading organizations do not have the control over and visibility into their capital planning processes that they have elsewhere in the organization."

The authors, Bill Sinnett, senior director of research, FERF; Carlson; and Madison Laird, Planview executive-in-residence, will present on the findings of the Capital Planning Benchmark Study in a webcast on January 24 at 12:00 P.M. CST / 1:00 P.M. EST. Register for either the live broadcast or the on-demand recording at www.planview.com/stateofcapitalplanning.

To make inquiries or comments about the survey or report, or for permission to use portions of this report in the public domain, please contact market@planview.com.

Use of Survey

The purpose of the study is to understand the state of capital planning processes at large organizations given today's dynamic business climate. The research provides insight into the ways finance organizations are currently managing the capital planning process, examines the tools used today, and offers recommendations to better manage the long-range planning process.

About Financial Executives Research Foundation

Financial Executives Research Foundation (FERF) is the non-profit 501(c)(3) research affiliate of Financial Executives International (FEI). FERF researchers identify key financial issues and develop impartial, timely research reports for FEI members and non-members alike, in a variety of publication formats. FERF relies primarily on voluntary tax-deductible contributions from corporations and individuals. This and more than 140 other Research Foundation publications can be ordered by logging onto www.ferf.org.

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