PRESS RELEASE – WÜRZBURG, May 28th, 2020
BARC (Business Application Research Center) publishes “Integrated and Predictive – The Future of Corporate Planning”, a survey-based study. It reveals the current status of integrated planning in companies as well as the challenges along the road to successful integration. The full study is available for download free of charge thanks to sponsorship by Board.
- #1: The majority of companies believe that integrated corporate planning is becoming increasingly important
- #2: In order to integrate planning successfully, challenges have to be tackled at a functional, technical and organizational level
- #3: Predictive algorithms will be able to provide more accurate forecasts in the future
The value of corporate planning
According to BARC’s research, companies are well aware of the value provided by corporate planning. 55% of companies state that the integration of strategic and operational planning offers high added value. 36% even describe the integration of plans as “essential for the future”. In contrast, only 9% doubt the value of integrated corporate planning. Companies that derive the greatest benefit from their integrated planning are investing heavily in the functional integration of planning and its coupling with analytics, but also in the technology to future-proof their performance management. 66% of survey respondents stated that integrated corporate planning is increasing in importance (see Fig. 1).
Fig. 1: How is the importance of integrated corporate planning developing in your company? (n=404) © BARC
“We can clearly see that companies are aware of the significance of integrated corporate planning and attach great importance to it, especially with regard to the future. Most want to make a start on integrating corporate planning, but there are several hurdles to tackle along the way”, said Robert Tischer, Senior Data & Analytics Analyst and co-author of this study.
Why does the integration of planning often fail?
BARC’s survey results show that companies face major challenges when it comes to improving corporate planning in order to keep decision-makers informed with plans and forecasts. 45% of participants stated that planning takes place in incompatible or isolated solutions. Master data in separate systems is often inconsistent, which makes automated transfers between sub-plans nearly impossible. This is often a major issue, especially for larger companies.
However, consistent master data is not only about using the right technology. Technical and organizational measures must be taken to create a uniform view of existing data. The second most frequent challenge arises when planning processes are not clearly defined or adequately coordinated (40%). This makes coherent, transparent and automatic integration difficult or even impossible. Only when addressing functional, technical and organizational issues in combination can organizations expect to reap substantial rewards.
Expectations are high for predictive algorithms
A major challenge in corporate planning is to generate meaningful and high-quality planning figures quickly and with little effort. This applies to classic annual planning and budgeting, but increasingly also to short-term forecasting. Many companies are therefore seeking solutions to speed up forecasting and reduce effort. They want to leverage modern planning approaches such as predictive planning and forecasting. 89% of participants rate the current and future significance of predictive technologies and forecasts as “important” or “very important”.
When it comes to rating the potential of predictive algorithms, expectations are equally high. The majority of companies in this study believe that predictive technologies will be able to deliver more accurate forecasts in the future than a human planner today (see Figure 2).
Figure 2: Do you believe that predictive technologies and algorithms will deliver more accurate forecasts in the future than human planners today? (n=412) © BARC
The still low use of predictive planning and forecasting in practice is in stark contrast to the assessment of its relevance and potential. Two thirds of the companies surveyed are only just beginning to address the topic and have not yet gained much experience. Only 4% already successfully use and benefit from predictive technologies and forecasts.
Dr. Christian Fuchs, Senior Data & Analytics Analyst and co-author of this study points out: “The gap between future expectations and the current situation is quite striking. Many companies will have to step up their technical and organizational approaches in order to tap the full potential of predictive planning and forecasting.”
About the study
“Integrated and Predictive – The Future of Corporate Planning” is a topical BARC survey examining the approaches and obstacles to implementing integrated corporate planning. The study is based on a worldwide survey of more than 400 companies of various sizes and industry sectors. The focus of the study is to evaluate the importance of integrated corporate planning and to identify the challenges and risks currently facing companies. The authors of the study are Dr. Christian Fuchs and Robert Tischler, Senior Analysts for Data & Analytics at BARC.
BARC (Business Application Research Center) is one of Europe’s leading analyst firms for business software, focusing on the areas of data, business intelligence (BI) and analytics, enterprise content management (ECM) and customer relationship management (CRM). The company was founded in 1999 as a spin-off of the Chair of Business Administration and Information Systems at the Julius-Maximilians-University in Würzburg. Today, BARC combines empirical and theoretical research, technical expertise and practical experience, including a constant exchange with all market participants.
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