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14.09.2006

Recent Survey: Majority of Companies Work Without Planning Process

  • 55% of companies with annual turnover in excess of 700,000 euros do not have written planning
  • Significant differences depending on company size: One in three small companies plans, two out of three medium-sized companies plan, but practically all large companies plan
  • BA-CA issues new planning software especially for small businesses
  • In comparison with previous years planning is no longer regarded as a “hot topic”

The majority of Austrian companies with annual turnover in excess of 700.000 euros do not have a corporate planning process. This is the picture that emerged from a survey carried out by the market research institute Brainstudio in July 2006 on behalf of Bank Austria Creditanstalt (BA-CA). The survey canvassed 705 managers, owners and chief financial officers of small, medium-sized and large enterprises. Specifically, fewer than half the companies (45%) said they used a regular and written planning process. Fifty five per cent of companies said they did not work with a planning process.

A closer analysis of the size of the companies surveyed shows that small companies have a glaring need to catch up. One in three small companies with an annual turnover of between 0.7 and 3 million euros says they plan (=34%). Among medium-sized and large companies generating annual turnover of at least 3 million euros, two out of three companies have a planning process (=64%). And among large companies with annual turnover in excess of 50 million euros, 87% of those surveyed use a planning process. In order to narrow this gap in planning behaviour, BA-CA this month launched planning software designed specifically for small companies – the BusinessPlanner Basic. The best window on the issue of planning for BA-CA business customers is provided by the new introductory seminar PlanungsWorkshop Basic.       

Managerial Blind Flight
“Companies have to ask themselves: do I know where my business is headed? Anybody who answers this question on the basis of intuition instead of hard facts, should rapidly get on board a planning process,” says Martin Frank, head of BA-CA’s Corporate Finance and Public Sector division. “After all, planning means casting ones goals in figures. Those who do not plan move forward in a managerial blind flight - or perhaps in reality backwards.”

Comparison with the period 2004 –2006 shows that interest in planning is waning
The market research institute Brainstudio also carried out this survey in 2004 and 2005, at that time among companies with an annual turnover of at least 3 million euros. The percentage of companies with turnover in excess of 3 million euros which use a planning process has remained steady over the whole three year period (2004: 65%; 2005: 65%; 2006; 64%). However, significant changes in the survey results show that planning is definitely no longer a “hot topic.” Although 94% of the companies surveyed this year said planning was important, only 58% (2005: 64%) said it was becoming increasingly so. Asked why their companies did not use a planning process 45% blamed a lack of resources or said that their company was too small. Thirty per cent replied that planning was not necessary – in 2005 only 21% gave this answer.

Asked which areas of planning were important, most respondents pointed to cost planning and sales budgets. Other results: 64 per cent of companies carry out a monthly comparison of their budget figures with the current data from their accounting department. Conversely, almost one third of companies do not know whether they are meeting their targets for months at an end. Asked which bank they thought possessed the greatest competence in the field of corporate planning, the result was unequivocal. Twenty four per cent identified the greatest competence at BA-CA, putting it well ahead of the second-ranking bank.

New: “BusinessPlanner Basic” and “PlanungsWorkshop Basic”
“Good planning is becoming more and more important – both in the ever-faster paced business world and in corporate financing,” says Frank. “Companies that plan improve their ratings and lower credit costs.” From now on, small and medium-sized companies (with turnover of at least 700,000 euros) can easily adopt a corporate planning process. BA-CA’s BusinessPlanner Basic offers a simple means of recording data from the profit and loss account and automatically draws up a balance sheet and financial budget. For the very reasonable amount of 900 euros for the one-off licence fee and 120 euros p.a. for the service agreement, companies can increase their internal financing strength, the best alternative to additional or more expensive loans. The best window on the issue of planning for BA-CA business customers is provided by PlanungsWorkshop Basic, a one-day introductory seminar for 20 BA-CA corporate customers at a time.   

In the mid 1990s BA-CA became the only bank in the German-speaking world to offer planning software. The BusinessPlanner combines profit, balance sheet and financial planning to provide professional financial controlling. In 2004 BA-CA went on to launch the one-day PlanungsWorkshop, which builds upon the BusinessPlanner and rapidly enables corporate customers to use the integrated planning tool to steer the company. According to Frank: “optimal planning not only looks at the profit and loss account, it also links it with the balance sheet and the liquidity requirement.”
 

Enquiries
Bank Austria Creditanstalt 
Press Office Austria
Christian Kontny, Tel. +43 (0)50505 EXT 52483
christian.kontny@ba-ca.com