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Research From Oracle and Accenture Finds Inefficient Financial Reporting Leads to Loss of Confidence, High Costs and Hinders Decision MakingBusinesses Responding With Increased Investment in Reporting Systems; Need Guidance on How to Drive Value From Their Investments and Achieve Reporting Objectives (May 30, 2012)
REDWOOD SHORES, CA and READING, UNITED KINGDOM -- (Marketwire) -- 05/30/12 -- Oracle (NASDAQ: ORCL)
- Research released today from Oracle and Accenture reveals that the majority of companies worldwide have made substantial investments in financial reporting systems intended to improve their close, reporting and filing processes. However, the investments have been made ad hoc, leaving businesses with ineffective solutions and a lack of visibility, quality and confidence in their financial data.
- The research report, "Challenges of Corporate Financial Reporting," highlights that businesses are unable to fully understand the cost of their financial reporting, with 60% of finance professionals unable to identify the total cost.
- The report suggests that businesses need to change their investment strategies in order to avoid the increased costs, ineffective financial reporting and missed key internal and external deadlines.
- Conducted by Dynamic Markets, the report surveyed 1,123 finance professionals in large organizations in 12 countries, including the UK, USA, France, Germany, Russia and Spain.
- For full findings and research data, please go to http://bit.ly/KacUof
- Seeking change: Businesses have recognized the need to invest in new financial reporting systems to address efficiency challenges. 82% of surveyed companies have made changes over the last three years to their close, filing and reporting processes. Meanwhile, 47% have invested substantially in at least one of these three areas over the past 12 months.
- Ineffective investments: 12% of businesses in the survey have invested in just one of the three financial reporting phases (close, reporting and filings); 10% have invested in two of them; 25% have invested in all three. Despite these investments, spreadsheets (72%) and emails (68%) are still being used to track and manage reporting on a daily basis, suggesting that new investments are falling short of expectations.
- Increased costs and uncertainty: 21% of finance teams have seen their costs rise across the financial close, reporting and filing processes. Importantly, the situation is so opaque that managers across the finance function are unable to fully understand the financial impact/cost implications of managing and publicizing their company's financial results, with 60% of respondents admitting they did not know the total cost of managing and publicizing financial results.
- Persistent challenges: Due to inadequate reporting systems, the majority of businesses reported that they still face significant problems with financial reporting. 68% of respondents admitted that they have inadequate visibility of reporting processes, while 84% of finance managers reported that they find it difficult to control the quality of financial data across the course of their reporting, highlighting that additional attention should be paid to performance management.
- Decreased effectiveness: Unreliable and opaque data is presenting finance teams with significant challenges, not least of which is around how effectively finance professionals can do their jobs. 71% of finance managers feel their effectiveness is limited in some way by data analysis-related issues.
- Missed deadlines: The inability to effectively gather and analyze data is also having an impact on the wider business. Due to late changes to the chart of accounts, 15% of global businesses have missed statutory filings, putting their companies at risk of financial penalties and potentially impacting share value.
- Addressing the challenge: Businesses are continuing to take steps to improve financial reporting methods, with 86% of companies likely to make a significant investment over the next five years. 46% of businesses are due to overhaul all three phases of reporting, an approach which may address many of the challenges they currently face, and bring their reporting processes into line with their performance expectations.
- John O'Rourke, Vice President EPM Product Marketing at Oracle, said: "It is clear from the report that businesses are well aware that financial reporting needs to change. The good news is that many are doing something positive about this by investing in new reporting systems. It seems however, that these investments are currently too piecemeal and sporadic to have had the desired effect. With businesses still looking to invest, our advice is clear: Take the time to find a truly effective solution that can address data integrity issues and optimize processes. By doing so, finance organizations can be more efficient, while accuracy can improve and reports are more likely to be completed on time."
- Scott Brennan, Executive Director, Accenture Finance & Enterprise Performance Consulting Group, said: "These results mirror what we see and experience, and they're illustrative of why companies increasingly find it necessary in today's age of volatility to invest in their performance management. Those that tend to be happiest with the results of their enterprise performance management are those that have a vision -- they understand their company's strategy; they have a clear view of the metrics they need to monitor and they know the importance of integrating an enterprise-wide EPM solution."
- Professor Andy Neely, Director at the Cambridge Service Alliance, commented: "Modern business success is founded on good quality data and the ability to analyse it in a meaningful way. Without these two factors, it is very difficult to formulate the right insight to help your company grow. The research shows that finance departments in many organisations are currently falling short of both these fundamentals and need to look now at how they can improve the way they collect, sort and interrogate financial data if they are to overcome the challenges they are currently facing."
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- About Dynamic Markets
Notes to Editors
All interviews were conducted between 10th February and 15th March 2012. Dynamic Markets interviewed 1,123 finance professionals in large organizations (250+ employees) in 12 countries around the world.
Oracle engineers hardware and software to work together in the cloud and in your data center. For more information about Oracle (NASDAQ: ORCL), visit www.oracle.com.
Accenture is a global management consulting, technology services and outsourcing company, with more than 246,000 people serving clients in more than 120 countries. Combining unparalleled experience, comprehensive capabilities across all industries and business functions, and extensive research on the world's most successful companies, Accenture collaborates with clients to help them become high-performance businesses and governments. The company generated net revenues of US$25.5 billion for the fiscal year ended Aug. 31, 2011. Its home page is www.accenture.com.
Accenture is a Diamond level partner in Oracle PartnerNetwork (OPN).
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