To learn more about how Oracle customers perform Business Analytics processes (which includes Enterprise Performance Management, Business Intelligence and more), we launched the Oracle Business Analytics Customer Value Index (CVI) program in 2011, through which we collect valuable business process information from our customers, and share the results with them. This article will be the first in a series to share with you some of the results from each subject area.
Enterprise Planning, Budgeting and Forecasting
The first subject area being studied is Enterprise Planning, Budgeting and Forecasting. Our interim results, presented here, reflect the first 130 completed surveys of which approximately half use Oracle Hyperion Planning. Here is what we found out. Of the total population of members (those with and without Oracle Enterprise Planning solutions):
+ 63% perform monthly forecasting
+ 40% perform rolling forecasts
+ 63% perform quarterly forecasts
+ 33% perform event-based forecasting (or re-forecasting)
+ 59% perform driver-based planning and/or forecasting
The use of rolling forecasts has been steadily increasing each year and driver-based planning is also up significantly from previous years. Both of these processes have been shown to improve accuracy in forecasting and planning. One reason for the increase in organizations using rolling forecasts might be attributable to having efficient software to enable the process. For example, of the companies that now use Oracle Hyperion Planning, 79% of them did NOT perform rolling forecasts prior to implementing Oracle Hyperion Planning. It is a complex process made easier by capable software.
There was also a notable drop (31% fewer FTEs) in the amount of administrative time needed for the budgeting and planning process for those members that adopted Oracle Hyperion Planning. In addition, organizations with Oracle Hyperion Planning spent 38% less time per month in manual processes supporting monthly forecasts than they did prior to adopting the solution. Again, having capable software helped create a more efficient process.
In our survey, although Oracle Hyperion Planning is the solution of choice for budgeting (59%), forecasting (50%) and rolling forecasts (46%), spreadsheets still play a part for some companies for forecasting (18%) and rolling forecasts (25%). While the choice of using spreadsheets for these important processes may be acceptable for small companies, it can prove troublesome or even detrimental for medium, large and very large companies. Large and complex spreadsheets, broken links, dependency on the creator of the spreadsheet, and errors due to manual data entry and formula changes all contribute to the potential challenges faced from using them for these purposes. These results are not shocking as spreadsheets have been around for a long time, but they do confirm that organizations are slow to move away from spreadsheet technology for these important processes.
According to our survey, spreadsheets are also being used often for workforce planning (38%) labor costing (43%) and operational planning (39%). Although these numbers are reasonably low, they show that there are still a significant number of companies using them for very important processes that contribute significantly to accuracy in planning, budgeting and forecasting. This is troubling as disconnected spreadsheets can lead to more fragmentation in the planning process. Another significant change our customers experienced after implementing Oracle Hyperion Planning was that of the percent of time they spent in gathering data to analyze versus time spent actually analyzing the data.
Figure 1: Time to Gather and Analyze Data
From the graph it is apparent that, on average, our customers experienced a 23% decrease in the time it took to gather data and a 35% increase in time now available and used to analyze data, after implementing Oracle Hyperion Planning.
Although the average change for some of these processes may not seem overwhelmingly significant, average numbers tend to understate some of the dramatic changes individual organizations experience. For example one Oil and Gas company told us that they had experienced an increase in their forecast accuracy from 50% to 90% after adopting Oracle Hyperion Planning. A wholesale distribution company experienced a positive change in data gathering from 90% of their time to only 50% of their time leaving them with more time for valuable analysis. A Financial Services company experienced a 75% reduction in the time needed for administering their budgeting and planning process after adopting Oracle Hyperion Planning.
Stay tuned for more results in Part 2.
If you would like to become a member of the Oracle Business Analytics Customer Value Index Program (a free program), please contact me at firstname.lastname@example.org. Please keep in mind that you must be an Oracle customer to become a member, however you do not have to be using any specific Oracle software to become a member.
To learn more about Oracle Business Analytics including EPM and BI, click here.