BPM software-as-a-service (SaaS) vendor Adaptive Planning just completed a survey that reveals how pessimistic U.S. finance executives are about the near future of the economy — and how their forecasting practices are changing as a result. Eighty-six percent of respondents say that the economic conditions in their industry are worse today than they were six months ago. More striking, 43 percent of all companies — and 73 percent of companies larger than $500 million in annual revenue — expect conditions in their industry to  further deteriorate in the next six months. In a survey Adaptive Planning conducted last October, only 27 percent of respondents expected conditions to worsen.
    Companies today expect to cut their costs aggressively in the near future; nevertheless, they foresee their profit margins eroding. And uncertainty about the future (and the best course forward) abounds. When asked, “How would you characterize the uncertainty facing your business?” only 5 percent of respondents selected “low.” For 62 percent, the answer is “high” or “very high” -- and that number jumps to 72 percent among respondents from companies over $500 million.
    What’s particularly interesting from a performance management perspective is how companies are dealing with this situation: They are planning more and more frequently. Twenty-five percent of companies have replanned, reforecasted, or created what-if scenarios four or more times within the last quarter alone. Another 8 percent have done so three times, and 23 percent have done so two times. More than half of companies have reforecasted at least twice within the last quarter. From the perspective of Adaptive Planning president and CEO Bill Soward, this move toward rolling forecasts is likely to outlast the economic downturn. “This is a cultural shift,” he says. “Managing through uncertainty requires lots of shifts internally. I think this is going to become business as usual for a lot of these companies.”