Choosing The Right Partners Spells Success

Add spice to your otherwise dull and boring budgeting game with new tools, strategies and alliances   

Enter technology…

At the dawn of the computer age, business executives used primitive tools like spreadsheets and automated budget forecasts to calculate how much money they needed to run their companies. Many companies are still using outdated technology that deals poorly with newer budgeting issues like rolling forecasts, flexible budgeting and analysis. Organisations that use spreadsheets find their systems are frail. Spreadsheets are great as personal productivity tools but are inappropriate as enterprise planning, budgeting, and reporting systems because they provide only a single view of an organisation.

And things began changing…

About the year 2000 – financial software vendors began rolling out products that not only generated budgeting and financial reporting data but also told users how to manage and control their businesses with the data they collected. Many companies have started implementing Enterprise Resource Planning (ERP) systems, designed to improve operational business processes such as general ledgers, order processing, and procurement and inventory management.

With software vendors ruling the roost…

Rick Miller, product director, planning and budgeting solutions for Deltek, says “ lets face it, good planning and forecasting practices are the key to long-term success and with the wealth and breadth of budgeting and forecasting tools today, the job of managing your company’s budgeting and financial reporting is significantly easier than ever”. The market for analytic applications, including budgeting, planning, analysis and allocation application could break $1.3 billion next four years.

New software tools that can forecast revenues, ensure costs and profits, manage resources and task level, and help centralise staffing and utilisation across projects and departments are available.

How do you choose the right software?

There are five ways to make sure you are choosing the right software: 

• Reliable vendor: “Look for a vendor that strives to keep you happy”. Note the response time while you are researching a product. Try talking to other clients about the vendor’s product. Look for expertise and knowledge in the people assigned to work with you. See that your vendor’s key contacts have not only experience in implementing software solutions but also business management skills, accounting and budgeting knowledge.
• Multiple currency support: A global economy means multiple currencies; hence the budgeting software must support multiple currencies. Usually multiple currencies can be handled by creating an exchange rate table to hold rates for as many currencies as desired. A good and effective budgeting software should be able to accommodate maintenance of currencies by period, rate type and so forth.
• High data volume support: A business generates huge volumes of data; hence a good budgeting software should be able to manipulate vast amounts of data. Usually vendors provide customised application modules so that data can be easily processed on a PC network.
• Faster Implementation: See that budgeting system is implemented quickly or the budget would not keep pace with the changing business conditions.
• Security: A budget is a sacred document of a company, hence its security is very important. A good budgeting system should provide distinct user identification and passwords. However, the responsibility of assigning access to the system lies in-house with the systems administrator.

Soul searching…

Choosing budgeting software is like trying on a new pair of shoes. Sure, the stunning pair may look better, but aren’t comfortable shoes a better bet in the long run?

Related reading:  

“ Beyond Budgeting and Forecasting”: BRAIN O’CONNELL: A special report from Business Finance