Most senior managers lack timely and accurate data on profitability

Senior business and IT managers in large organisations are struggling with a lack of visibility into profits that is impairing financial performance, morale and business success, according to research released today.

Consultancy firm Dynamic Markets carried out a survey of 1,500 senior IT managers for software vendor Oracle and the results give insight into how IT managers are coping with the vast volumes of data being generated by their business.

It reveals that 82 per cent of large organisations admit to not having complete visibility into profits and argues that this leads to impaired financial performance.

Meanwhile, data used for business planning was found to be, on average, six months old; 46 per cent of IT managers believe this leads to potentially bad business decisions, while 30 per cent admitted that they do not know the age of data they use.

The survey also shows that there are consequences to poor business agility as it can take nearly 18 months to identify and amend a failing business process or initiative – 83 per cent of companies admit to suffering consequences because of this; a third (33 per cent) see their plans become obsolete, while over half (55 per cent) said they have incurred unnecessary costs – 43 per cent said that they witness a negative impact on employee morale.

"Organisations today face significant challenges in extracting accurate information on profit and performance," said Professor Andy Neely, deputy director at research firm AIM Research.

"As the volume of available data increases, so does the complexity of organisation structures. The shift to shared services, accompanied by the tendency to outsource and partner, makes it more difficult than ever before to allocate costs and apportion overheads. As this research shows, the consequence for executives is a partial picture of performance"