Technology has, in just the past few years, dramatically altered the way we do nearly everything, from sharing selfies to collaborating with coworkers. How it has affected the finance profession is no different.
But since most Enterprise Performance Management (EPM) applications were built solely to solve pain points around financial planning and analysis, finance’s counterparts – the budget owners – have been stuck with the same, outdated, manual, inefficient budgeting and planning processes they’ve used for decades.
It’s time for a change, but one that works for everyone.
That’s a challenge, however. You have the finance people who eat, breathe, and live numbers and everything else the finance world entails. Then you have the rest of the world who may or may not care or know about finance, but are still responsible and accountable for budgets and plans, at least for their domain.
What’s at stake is finance’s ability to not only do their job effectively, but to be a key player in company strategy instead of just the holder of the purse strings. This means innovating the way finance operates, getting more collaborative in all facets of the business, and being more agile and responsive to the budget owners.
Let’s Be Honest About Budgeting and Forecasting Tools and Process
Whether you’re managing a department in a large enterprise or operating a small business, planning, budgeting and forecasting can be a real pain.
Though new technology promised to reform the financial planning and analysis process, for a majority of companies, the budgeting and planning process generates very little value. In fact, less than half of budget owners consider their planning process as done well. It’s no surprise considering the primary focus of software solutions has been about numbers rather than business objectives. If you’re only looking to solve the challenges faced by finance, that might seem reasonable. But if you’re looking to empower and evolve your entire company, that distinction is critical.
Getting more involvement from the budget owners – those who know what they need, when they need it, why they need it, and more – should seem obvious. Finance can see the big picture totals, but only those budget owners know the details and how they tie into broader goals. For a true and comprehensive view of the business, finance really needs both.
Another challenge is that finance and budget owners speak different languages. Budget owners think in terms of “things” such as headcount, equipment, events, and campaigns; not expense lines. Pulling them into the process gives finance more information for better decision-making. It also elevates finance’s role from one focused on pure numbers to one involved with making sure resources are best allocated to help the business reach its goals.
Collaborate, Don’t Dictate or Alienate
Using traditional forecasting and planning tools built explicitly for financial teams is not easy for the rest of the organization. A non-finance person opens a typical planning and forecasting apps, is overwhelmed with a wall of figures and cryptic terminology, gets lost in a sea of numbers they don’t understand, and ends up disengaged as a result.
So, you want numbers? Then they’ll give you just the numbers. It’s a limiting proposition.
It’s obviously far more productive to collaborate with budget owners as they focus on their business objectives and plan resources required to achieve them. Let technology streamline the budgeting process and translate all the necessary resources into budget line items.
Think of it as a high-end camera versus your smartphone. With a camera designed for professional photographers, there are dozens of settings using strange terminology (I still don’t know what “f-stop” means!), your image files are stuck on a tiny plastic chip, and they probably need further processing in a desktop app. With a smartphone, you tap, the picture turns out perfect nearly every time, and you tap again to share it with your friends.
One of those solutions uses technology to make things more complex, but better in the hands of a few experts. The other is built for the rest of us.
Technology’s real power (and maximum ROI) comes to bear when it’s used to help and simplify, not add complexity and confusion.
Be a Financial Innovator
As organizations progress through their lifecycle, finance teams now have new opportunities to innovate while providing business-wide value and improving business-wide performance. An example is Planful MyPlan, which was designed to help finance work more closely with the business and make the budgeting process easier, faster, and more adaptable for budget owners.