A pair of recent surveys by Adaptive Planning, in conjunction with the BPM Forum, suggests more than half of financial executives are bracing for another downturn, a double dip recession. The first survey from February shows 51 percent expecting a W-shaped (double dip) recovery. For 67 percent, any meaningful improvement in jobs won’t happen until 2011.

The second survey, conducted a few months later, showed similar results, which suggests that the economy has stabilized. “People expected improvement, but clearly it is not happening as fast as they hoped,” commented Bill Soward, Adaptive Planning CEO.

The latest bouncing around of the major stock indices considerably below their highs for the year, along with European debt problems and the Gulf oil disaster, only add to the gloom. Still, Soward suggests that there are steps financial managers should take to navigate this bumpiness.

The surveys, however, did contain some good news. It turns out that financial managers among midsize businesses are increasingly optimistic about the economy overall, despite fluctuations. The first survey’s index of current conditions, which compares current economic conditions with those of six months earlier, increased to 52.25 from 44.50 in October of 2009. That marked the third consecutive quarterly increase and the first time the index reflected a more positive than negative outlook.

Better yet, respondents demonstrated brighter expectations for their companies than they do for the overall economy. More than half (55 percent) reported expecting revenue growth for their company over the next 6 months, while 25 percent expected to add jobs. That’s more than the 17 percent expecting jobs growth from the broader economy in the next two quarters.

Finally, when the survey looked at the biggest concerns of CFOs, the state of the credit and financial markets came in second. What came in first? Demand for new products/services.

So, given the economic outlook as captured in the surveys, what is the CFO to do? Soward has some suggestions:

First, rethink the way you plan and forecast. The annual planning, forecasting, and budgeting cycle is not responsive enough to rapidly changing market conditions. Quarterly or even a monthly forecasting and planning cycle may not be sufficient.

Instead, Soward argues for a change to rolling forecasts and planning, which he realizes represents a serious change in the behavior of finance. In the survey, only 29 percent of companies replanned on a monthly or more frequent basis. Of course, to do this effectively requires appropriate new tools. Excel simply won’t cut it.

Adaptive Planning offers a SaaS financial planning and forecasting product that can handle rolling forecasts. Other SaaS offerings that promise to do the same include 1234Cast and Delphus Virtual Forecasting. For those not inclined toward SaaS, there is Prophix Software, a low-cost conventionally licensed tool that handles forecasting. ###