Trending in corporate finance: November


Welcome to the third blog in our “Trending in corporate finance” monthly series—a roundup of the most important things happening in the world of finance, aggregated and packaged into a quick-to-read and easy-to-skim format. Here’s a selection of the articles and news that caught our attention in November.

1. Talent shortages and wage pressure starting to impact labor costs

During the latest corporate earnings reporting season, executives from S&P 500 companies began to flag talent shortages and wage pressures as challenges they expect to face in 2016. It tends to be sector-specific, with home-building, construction, and airlines suffering from a shortage of talent while restaurants and retailers are under pressure to keep up with state and federal recommendations on minimum wages.

Why does it matter?

Since the 2008 financial crisis, wage inflation has been largely non-existent, so it is a challenge that companies have not seen for quite some time. Being able to afford wage increases while maintaining margins will be critical. Finance will need better insight into labor costs and continuously manage their resource plan in order to keep headcount in step with demand. Both are capabilities that Anaplan delivers with our increasing range of workforce planning apps.

2. Business managers want more contextualized financial data

CEB, a best-practice insight and technology company, came out with what is perhaps the most shocking statistic of the month. It published research revealing that only 20 percent of managers who use data from their accounting teams find the information offers meaningful insights or trends. What business users want is “more contextualized financial data” – i.e., the commercial and operational data that drives the financial numbers.

Why does it matter?

This research indicates the gap that finance teams must close if they are going to partner with the business. Closing this gap will certainly involve investing in technology, as legacy financial systems typically struggle with non-financial data. But Anaplan’s easy data integration and hub-and-spoke data model makes it easy to mash up operational and financial information to deliver exactly what the CEB report suggests business users need.

3. Margin management is the top priority for 2016

The least surprising statistic of the month? That margin management remains the top priority for finance during 2016. This was revealed by the 2016 Finance Priorities Survey by Financial Executives Research Foundation (FERF) and global consulting firm Protiviti. A massive 82 percent of C-level financial executives interviewed for the survey listed margin management as their most important challenge.

Why does it matter?

Many companies currently lack the detailed multidimensional insight needed to manage profitability across a large portfolio of products, customers, and business channels because they are hindered by legacy planning applications, tied together with spreadsheets. However, this is no longer the case. Anaplan combines an unrivaled planning and modelling engine with the speed to assess the impact of planning scenarios. In addition, our partners have developed a growing range of cost and profitability apps in the Anaplan App Hub, the most recent being Deloitte’s iCost app, which uses their best-practice methodologies to make it easy to design and run models that can quickly adapt to changing situations.

That’s all for this month. Don’t forget to check back for the next edition of “Trending in corporate finance.” Feel free to tweet your recommendations to @Anaplan and share your thoughts on in the comments below.

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