Stop Abusing Excel for Workforce and CAPEX Planning

For many organizations, staff compensation is the largest part of the expense budget.  And getting CAPEX planning right can have a big impact on depreciation expenses and cash flow.  Planning for these expense categories requires a great level of detailed and sensitive information.  Yet many organizations rely on error-prone, unsecure spreadsheets, and email for handling these critical planning processes.

Leading organizations, however, are moving to cloud-based planning platforms to support these processes.  These platforms automate data collection, accelerate workforce and CAPEX planning, and better align finance and operations while ensuring the security of this sensitive information.

Workforce and CAPEX Planning: Vital Components of the Budgeting Process

Workforce and CAPEX planning are crucial components of the overall budgeting process.  They involve two vital assets: human and physical.  Without either, no company could function.  And both planning processes require a great deal of detailed data to perform accurately.

Let’s take workforce planning as an example.  While some organizations perform workforce planning at a very summarized level, accurately forecasting workforce expenses requires a more granular approach.

The starting point is to collect data regarding existing staff – including their salaries, benefits, and any other compensation – and deliver this to line managers, who can then perform departmental workforce planning.  Managers will then apply annual salary increases, bonuses, and other expected compensation changes for the year.  Managers will also need to enter the same information regarding expected new hires.  Then they need to consider terminations, transfers, or other staffing and compensation changes to arrive at their annual salary and compensation budget.

CAPEX planning follows a similar approach.  The starting point is to collect all the details regarding existing assets and depreciation, and make that available to line managers.  Then managers can add expected capital acquisitions, retirements, and transfers of assets to calculate their depreciation expense for the year.  The output from this process also informs the cash flow plan of the organization.

In both cases, accurate planning relies on collecting very detailed and sensitive information, making it available to line managers, then collecting the data and aggregating it into a corporate view of workforce and CAPEX plans, which then feed into the overall financial budget.

Getting both planning processes right is critical to having an accurate forecast of compensation, benefits, recruiting costs, and onboarding costs, as well as new capital expenditure requirements.  Errors caused due to mis-keying of information or bad calculations can have a material impact on the overall expense budget.  Knowing all of that, it’s hard to believe organizations continue to rely on spreadsheets and email to manage these processes.

Spreadsheets: The Wrong Tool for Workforce and CAPEX Planning

The pitfalls of spreadsheets for corporate budgeting and planning are widely known.  And while many organizations are moving from spreadsheets to purpose-built planning applications, many continue to rely on spreadsheets to manage critical processes, such as workforce and CAPEX planning, which feed into the budgeting system and process.

But there are many issues and risks in continuing to use spreadsheets for Workforce and CAPEX planning:

• Difficulty loading historic data from other systems
• Users make copy-and-paste errors
• Users don’t always manually enter data correctly
• No security around confidential information
• Version control issues
• Difficulty in consolidating multiple spreadsheets

Stop Abusing Excel – Use the Right Tool for the Job

So if spreadsheets aren’t up to snuff for workforce and CAPEX planning, what should you be using instead? Leading organizations are adopting cloud-based budgeting and planning solutions, as part of EPM software, that make the workforce and CAPEX planning process significantly easier and faster.

What are the advantages of using cloud-based EPM software for workforce and CAPEX planning?  Here are a few:

• Automatic integration of detailed data from others systems – such as Financial, HR, and Fixed Asset applications – whether they are on-premises or in the cloud.
• EPM software standardizes workforce and CAPEX planning processes and assumptions across departments and divisions
• Pre-built templates enable fast deployment and easy collection of data from line managers
• Reduction of errors and improved accuracy of workforce and CAPEX planning information
• All the planning data, and detail, is in one place – users don’t need to waste valuable time and energy hunting down information
• Improved security over sensitive information
• Fast consolidation of planning data and reduced planning cycle time
• Extensive audit trails – everything that users do is documented