Is your budgeting, planning, and forecasting process no longer useful to your organization? Does it take too long, involve cumbersome spreadsheets, and result in obsolete information? You’re not alone. Many of our clients came to us with these same complaints. In fact, we work with a hospital in New Jersey that used to collect 200 spreadsheets at the beginning of every budget cycle, then ended up with multiple versions of each spreadsheet by the end of the process…though now that I think about it, I’m not sure their budget cycle ever actually ended. It just merged into next year’s!
That is an obvious example of a company that had outgrown its budgeting and planning process. But some situations aren’t so obvious. You know you and your planners suffer at the end of every fiscal year, but is it so much that you should consider graduating to the next level of planning?
Here’s 5 ways to know if you’re ready to move on to a more sophisticated method of budgeting and planning:
1) You’re beyond the 6/6 spreadsheet rule.
Spreadsheets are excellent tools for individual tasks and ad-hoc reporting, but are poorly suited to repetitive, collaborative, enterprise-wide functions such as budgeting and planning. One rule of thumb that says, “If more than 6 people will use it more than 6 times, you should consider an alternative.”
2) Time constraints are limiting the amount of re-planning you can accomplish.
The best time to gain an advantage in the market is during a downturn. While your competitors may have been cutting costs during the recent economic crisis, if you had more agile planning processes in place, you would have anticipated change better and been more nimble in adjusting your business.