SOURCE: Adaptive Planning

Adaptive Planning

July 12, 2010 12:27 ET

Finance Executives Report Growing Pessimism and Increasing Economic Uncertainty in New Survey

Concerns About a Double-Dip Recession and Jobless Recovery Continue Despite Economic Stabilization; Planning and Reporting Cited as #1 Challenge for Finance

MOUNTAIN VIEW, CA--(Marketwire - July 12, 2010) -  Current economic conditions have stabilized, but continued concerns about the possibility of a "double-dip" recession and a slow jobs recovery, together with increasing economic uncertainty, have a growing number of finance professionals reporting pessimism about the overall economic picture and outlook for their companies. These results are part of the findings of a quarterly poll of finance executives conducted in June 2010 by Adaptive Planning and the Business Performance Innovation Network.

The Q2 2010 Business Volatility and Variables Survey revealed that 46 percent predict a "W-shaped" recovery, similar to the 51 percent expecting a "double-dip" recession in last quarter's survey. Four out of five finance executives (80 percent) expect that a meaningful and sustained recovery in jobs growth will not occur until 2011 or beyond, with a full 41 percent believing it will be in the second half of 2011 or beyond.

The majority view current economic conditions as the same (38 percent) or better (35 percent) than they were six months ago. However, a growing number of finance professionals have become more pessimistic about the future, with 21 percent expecting the economy to be in worse condition in six months -- more than double the percentage from last quarter (10 percent), and the highest "negative" reading since March 2009.

At the same time, finance professionals are also reporting less optimism for the future performance of their companies. While half (51 percent) expect revenue growth for their company over the next six months, one quarter (24 percent) expect revenues to fall -- a significant deterioration from last quarter's 14 percent. In terms of hiring, most expect no changes (49 percent) or additions to staff (22 percent); however, 29 percent expect to have fewer staff in six months, which is also worse than last quarter's 22 percent. 

The economic outlook is becoming increasingly murky as well, with a full 60 percent of companies reporting high or very high levels of uncertainty. That result is up from 53 percent last quarter and near the highest level of uncertainty previously reported, 63 percent in March 2009. This uncertainty is continuing to drive more frequent re-forecasting and scenario planning, with well over half (56 percent) expecting to increase the frequency of their re-planning and what-if analysis next quarter. 

The survey also found that improving planning, reporting, and analysis was the top challenge for finance organizations, well ahead of staff issues, revenue concerns, access to capital and credit, expense management, and many other issues. 

"In addition to the top concerns from past surveys -- demand for products, U.S. financial market stability, and healthcare reform -- finance professionals are now also worried about Euro-zone instability," said William A. Soward, CEO of Adaptive Planning. "Against this backdrop, it's not surprising that the number one pain for finance organizations is improving their budgeting, forecasting, and reporting processes. Traditional approaches to financial management are simply no longer sufficient given the demands that the current economic environment places on executives and management teams."

The online poll surveyed financial professionals from companies in over twenty industries and ranging in size from under $10 million to over $1 billion in revenues. This is the sixth quarterly poll examining perspectives on key economic conditions, individual company performance, and the role of planning and forecasting in the current economic downturn.

The poll will be conducted once per quarter and the results tallied against those of previous quarters to identify trends in overall economic conditions and planning practices. For more information on the summary report of the findings, visit www.adaptiveplanning.com/docs/Business_Variables_and_Volatility_Q2-2010_FINAL.pdf.

About Adaptive Planning

Adaptive Planning is the leader in on-demand budgeting, forecasting, and reporting solutions that streamline financial management, improve collaboration, and drive better business decisions in companies of all sizes. By offering affordable annual subscriptions and rapid implementations, and by eliminating the need for new hardware or IT support, Adaptive Planning makes it easy to move beyond spreadsheet-based processes without the cost and complexity associated with traditional business intelligence (BI) and business performance management (BPM) applications. Available both on-demand and on-premise, Adaptive Planning allows finance leaders and management teams to make better-informed decisions, execute with agility and discipline, and ultimately improve competitiveness. Adaptive Planning is headquartered in Mountain View, Calif. and can be reached at 650-528-7500 or www.adaptiveplanning.com.

About the BPI Network

The Business Performance Innovation (BPI) Network is an influential group of senior-level executives driving transformation, process re-invention, organizational innovation, lean operation, and competitive adaptability in multi-national enterprises worldwide. Members of this change-centered affinity network represent companies with combined annual revenues of more than $1 trillion. The aim is to share thinking and advance best practices in how enterprises can "transform to better perform" as they seek to tap more complex, cost-sensitive, growth markets with large, diverse and evolving consumer and infrastructure needs. More information is available at: www.BPINetwork.org.

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