In Part 1 of this post, I outlined 2 pitfalls to avoid when deploying budgeting, planning and forecasting (BP&F) systems. Let’s follow up with 3 more rocks in the road to avoid on your way to project success:
3. The wrong team
Don’t be fooled into thinking that developers are the only ones needed to make your new planning system a reality. Your “dream team” should include project managers, functional experts, platform architects, data architects and of course, the project sponsor.
The project sponsor is instrumental in driving the approval of the project to begin with and stays involved during implementation (supporting the project manager, making decisions, ensuring the project continues to support the business’ priorities, managing relationships with stakeholders and the vendor). He or she is also pivotal once the project is complete. Overseeing adoption of the system may ultimately fall on this person. You could have the most perfect budgeting and planning solution ever developed, but if no one uses it, the project is a failure. It’s this person’s job to ensure that stakeholders understand and use the system as he/she is the one who identified the need for change and should be committed to seeing it through.
There are sometimes 2 project managers – one provided by the vendor and one from the client organization. The vendor’s project manager will steer the ship, be mindful of the scope of the project, communicate progress with stakeholders and ensure that the project is on time and on budget…
The financial success of any organization begins with a well-structured budget for each department. Just having this budget/plan in place does not guarantee success, but not having a plan guarantees failure.
But with only half of organizations’ plans being accurate and two-thirds not being able to investigate the details of their budgets in real time, many companies are planning major modifications to their budgeting and planning because they are painfully aware of the shortcomings of their process.
The implementation of a comprehensive budgeting, planning and forecasting (BP&F) tool should not be taken lightly. Though BP&F solution deployments can take as little as 6 weeks or as much as 4 months depending on the complexity, these projects require significant forethought, resources, and strategy. With this in mind, here are some pitfalls to avoid if at all possible. These of course apply to all business intelligence projects, not simply BP&F:
1) Unrealistic scope
An unrealistic scope is the #1 project impediment we see at arcplan. Because our solution, arcplan Edge, is fully customizable, we enable our customers to not compromise on their requirements. However, not every company has the funds to deploy every item on their wish list in Phase I of the project. So what can you do to ensure project success?
For many financial planners out there, budgeting, planning and forecasting equals spreadsheets. Dozens or hundreds of them – that’s just the reality. You’ve accepted the fact that come the end of the fiscal year, you and your cohorts will be chained to your desk piecing together various versions of spreadsheets from each department and hoping that after several weeks of this, you’re able to consolidate the numbers into a workable budget for the next year. And then you hit a sales roadblock halfway through the year and have to forecast the impact…and go through all of this again.
The sheer amount of work this process takes is not the only challenge you face, and you’re not alone. Let’s take a closer look at 4 of the common challenges that are undermining your ability to be truly productive and add value when it comes to budgeting, planning, and forecasting.
Have you ever tried driving at night without headlights? I haven’t, but I can tell it’s a bad idea. In the same vein, your visibility issues when it comes to budgeting and planning mean you might be driving blind and that’s a bad idea for organizations that want accurate budgets and forecasts for the year/6 months/quarter ahead. Can you relate to these complaints?
- I’m unable to get real-time data from IT.
- The data I do get is siloed.
- We need to cut our sales plan back 10% and I have no way to see the financial impact, let alone quickly notify budget managers of the change.
Visibility issues might vary in complexity but they all mean the same thing: making decisions with inadequate or outdated information can inject serious error into every process at your organization. If you have old data to plan with, your budgets may be unrealistic. If you can’t provide timely insight to your budget managers, they can’t make good decisions (as would be the case with #3 above).
And if you’re not providing value-added contributions to the budgeting and planning process, your role as a planner will be undermined.