New Software Takes Planning To the Web.

• Author: Singh, Laurie Kaplan

The need to give investors what they want has always played a big role in shaping corporate strategy. But in today's fast-changing, competitive business climate, the pressure to meet Wall Street's expectations has become intense. "If you ask most CFOs what's keeping them awake at night, they'll tell you it's that they made a commitment to the Street," says Paul Hill, vice president of marketing for Adaytum, a leading developer of planning software. "Hitting your earnings targets is critical."

The investment community's heightened demand for accurate earnings estimates is a byproduct of today's global business culture, which increasingly is characterized by intense competition, short product and operating cycles and instantaneous information transfers. With operating cycles shrinking, financial executives and securities analysts are under pressure to monitor actual results on an ongoing basis and to identify -- at an early stage -- problems with the potential to prevent the attainment of budget objectives and earnings forecasts. "Companies are being asked to move away from static annual planning processes and to provide rolling quarterly forecasts," says Scott Laughner, a partner in Andersen Consulting's Financial and Performance Management Services Line. "The investment community is increasingly valuing precision in quarterly disclosures."

"The world is more dynamic; things are happening faster," says Adaytum's Hill. Companies like Amazon com, for example, are continually adding new product lines and can have effective operating cycles as short as a month. Consequently, "there's a big disconnect between the annual planning process and the actual business cycle of most companies today," says Hill. Simultaneously, large organizations are looking for ways to provide financial services in a more cost-effective manner. All of these added pressures -- combined with recent technological advances that make innovative solutions possible -- are causing financial executives to reevaluate the traditional budgeting and planning processes and to find ways to make them more efficient and accurate.

Increasingly, companies are recognizing the need to involve a much greater number of employees in the budgeting and planning processes. Many are turning to modern Web-based technologies, which give "companies the ability to put the budgeting process in the hands of more people," says Lee Geishecker, Research Director, Corporate Financial Systems of for the Gartner Group. It's also allowing organizations to overcome many other problems associated with the traditional planning and budgeting cycles, including corporations' reliance on multiple data sources and complex spreadsheets. In the process, the...