With public trust at stake and compliance requirements on the rise worldwide, financial and management reporting practices are changing in a hurry. U.K.-based public companies this year face far more stringent Operating and Financial Review (OFR) requirements that may force them to explicitly detail how well they have performed to plan — or they may not, depending on how strictly OFR is enforced.
Either way, it's another nail in the coffin of spreadsheet-based budgeting processes. Dedicated planning applications are what's really required to collect and report operating and financial performance metrics.
Lack of substance in a public company's Management Discussion and Analysis (MD&A —the U.S. equivalent of the British OFR) has been a longstanding issue for investors on both sides of the Atlantic. Since the 1970s the U.S. SEC has required "full disclosure," and "go-go years" shenanigans led to passage of the Sarbanes-Oxley Act as well as demands for accelerated filings and more comprehensive and useful MD&A content.
In Europe, broader adoption of stricter standards was an inevitable result with the European Union's creation in 2001 of the International Financial Standards Board and its more rigorous reporting standards. The U.K.'s OFR regulations, rolled out in March, go even farther, requiring that directors' reports include a "fair" review of the business and that auditors express an opinion that the directors' assertions are consistent with financial statements. The law also created administrative and criminal guidelines for the enforcement of these requirements.
Regardless of how vigorously OFR and similar U.S. requirements are enforced, too many companies either don't have explicit strategies or don't formally tie them to objectives, planning, budgeting and performance reviews. The typical spreadsheet-based budgeting process won't work because it forces companies to spend too much time gathering, organizing and validating information. Requirements on both sides of the Atlantic are driving companies toward dedicated software that helps make planning and budgeting a more effective management tool.
— Robert Kugel
SAP Ships Packaged Software for Midsize Companies
SAP has unveiled preconfigured software and services that cover 28 business processes for midsize companies. Called SAP Best Practices, the offerings cover industries ranging from retail and utilities to the public sector and cover scenarios including warranty claims, prototype development, campaign management, engineer-to-order and supply-chain-performance management. Packages also are available for business intelligence and portal development.
— Antone Gonsalves
Oracle Taps Systinet's UDDI Registry
In a new partnership, Oracle will embed Systinet's SOA registry with the Oracle Application Server 10g. Based on the UDDI standard, Systinet Registry 6.0 provides a "system of record" for describing, discovering, publishing and invoking services. Oracle will abandon its own registry in favor of the market-leading product.