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4 Steps to Reducing the Pain of Planning and Forecasting [Webinar Recap]

With a few months to prepare, this is a good time to assess how well your budgeting process went last year.  Was it a relatively fast and smooth process?  Or did you struggle through the process with spreadsheets and email, or legacy applications that your organization has outgrown?  Maybe it’s time for a change!

This was the topic of a recent webinar sponsored by Planful.  During the event, we spoke about how organizations can reduce reliance on spreadsheets and manual processes, automate and accelerate budgeting and forecasting, and spend more time analyzing business results.  Here are the highlights.

Planning Challenges in 2017/2018

A number of factors are at play as organizations enter the second half of 2017 and begin planning for 2018.  For example, there are new regulations, such as the upcoming changes in Revenue Recognition guidelines from the FASB and IASB.  There’s the potential impact of the Trump administration on corporate tax rates, healthcare, and other regulations.  There’s increasing volatility in the market – think about oil and other commodity prices, and exchange rates.  There’s more data than ever coming from internal systems, websites, and external sources such as social media that can be leveraged.

This is putting new pressures on Finance to reduce reliance on spreadsheets and manual processes. Many organizations are adopting dynamic planning techniques, such as driver-based planning and rolling forecasts, to update planning assumptions.  There’s increasing use of analytics and scenario modeling to leverage big data.  And there’s increasing use of new technologies like cloud and mobile to support anytime, anywhere access to information

The Problems with Spreadsheets

Spreadsheets.jpgSo what’s the problem with using spreadsheets for budgeting and planning?  While spreadsheets are great personal productivity tools, they weren’t designed to support corporate processes such as budgeting, planning, forecasting, and reporting.  While spreadsheets and email might seem to do the job for a small organization with 10 managers, as organizations grow in size and complexity, the spreadsheet approach starts to break down.

This about it.  There’s no workflow, no process management, no security, and no audit trails.  And a University of Hawaii research study found that 88% of spreadsheets contain errors.  Think about all the time you’re wasting creating Excel templates, emailing them out, collecting them back, correcting errors, consolidating and reconciling data, building reports – and doing this in multiple iterations over the course of the budgeting cycle.  If you’re spending 80% of your time collecting data and only 20% analyzing it – believe me, there’s a better way.

Leaders Moving to the Cloud

Packaged planning applications found in today’s cloud-based enterprise performance management (EPM) platforms provide purpose-built functionality designed to address the complexities of budgeting, planning, and forecasting in small, medium, and large enterprises.  Cloud (a.k.a. SaaS) has become the preferred deployment model for new planning solutions.  At Planful, we’ve been witnessing this shift for a number of years, and now Gartner has validated the market shift to the cloud with its 2017 Magic Quadrant for Cloud Strategic CPM Solutions report.

Why the cloud?  According to the Gartner report, “Finance leaders are seizing the opportunity to shorten time to value (TTV) for new applications, reduce application support costs, and increase flexibility.  Companies are also finding that cloud solutions are typically easier to use and maintain than legacy, on-premises offerings.”

4 Steps to Reducing the Pain

During the webinar, we described the warning signs that it may be time to rethink your current approach to budgeting and planning.  We also highlighted 4 steps you can take to reduce the pain of budgeting and planning for 2018:

  1. Make more intelligent use of Excel
  2. Implement cloud-based budgeting & planning software
  3. Simplify annual budgeting
  4. Implement periodic rolling forecasts

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