I always ask Finance Teams what they don’t like about their Budgeting/Forecasting processes.
A common answer I get is that they spend 60-70% of their time on data collection and validation. This is time that they should be spending on value added tasks.
What does this look like?
- Before the process officially starts, weeks are spent getting data out of source systems, formatting that data and putting it into the planning system/worksheets in a way that works.
- They are still working after the “final” inputs to the plan. This time is spent extracting all of that data and “checking” it. Everyone has a different way of validating that data. They always agree that they validate it too late.
These tasks drag out the time it takes to provide the Budget. And more importantly they take away time from other responsibilities.
Easier Data Collection
I have become desensitised to how crazy it is to see people manually exporting data from source systems to use as a planning base. And it is crazy, its ridiculous. If you are doing this, why are you doing it? Do you change your source systems every year? Don’t you value your time?
Invest the time in automating connections between source systems (e.g. ERP) and your planning system. Consider it a gift of time to your future self. Not only will it save you time, if you do it right, you are mitigating against the risk of human error. That is a risk that plagues us all.
Validate Yourself
A recent project involved migrating a planning process from an old EP Cognos Planning system into Planning Analytics. It was a well thought out application with lots of validation checks to make sure users were inputting sensible data. The problem was that it didn’t tell them about the validation until they tried to submit their “finished” plan. On top of this, after all countries have submitted their data. The central team performed extra checks.
We made the validations give “live feedback”. If I put in a full year forecast that is lower than the year to date actuals? The cell turns red. This is simple, its common sense, but it wasn’t being done – now it is, the user knows immediately if they have done something wrong. They can fix it while it is still fresh in their mind.
Always ask whether you are spending your time on the right tasks. Did you add value to the business? Things aren’t always perfect and never will be. But you can make the decision to try and improve these things before you next have to do them!
Spitfire Analytics:
We are a team of finance professionals – who are experts in helping companies bring efficiency, speed, and agility to their finance teams and planning processes.
As a team we have over 35 years of experience in licencing, designing, implementing, and delivering systems to improve the planning, budgeting, forecasting, and analysis processes. We do this using IBM Planning Analytics (powered by TM1).
We currently offer a free health check of your planning system – regardless of what software you use.
Should you already have a project in mind, want to learn more about us and our services, or arrange a health check; please contact us on 0161 464 3687 or email [email protected]
