The Power to Plan
Countless organisations, both large and small, still rely on the ubiquitous spreadsheet for their planning and reporting functions for two main reasons. The first is that their accounting systems fail to provide the functionality required and the second is that every senior person in the finance department has grown up with the spreadsheet.
Computer based finance systems were originally designed to meet statutory requirements and present the position of a company based on historic transactions. Although this is still an essential part of the finance function, the emphasis has moved to planning. The truth is that what has gone cannot be undone, but banks and venture capitalists want to know what companies plan to do to either remedy mistakes or improve on the past successes.
We have also seen the move from a centralised budget process to one of empowerment, where budget holders have the responsibility of developing their budget rather than having it thrust upon them. In smaller organisations, the spreadsheet is still valuable, but for the corporate budget, is the single-user, personal productivity tool the correct solution? Companies that continue to use spreadsheets are faced with mounting problems of multiple workbooks with tens of linked sheets, compounded by the design difficulties of having data and rules in the same location. It results in countless problems of reconciliation, with check cells littering the sheets that must balance to zero. The irony is that many users know that the process is flawed, but persist because they are adept with spreadsheets. Indeed, the same users were probably responsible for developing the model and it is their baby. No one must alter it, but if someone does, how do you know because it doesnt balance?
Data Command Limited has been providing powerful, cost-effective budgeting alternatives since 1984 and now the market has a whole range of multi-dimensional modelling tools. These can provide significant benefits to users that spreadsheets cannot hope to challenge.
The design of these products is fundamentally different, having a database at the heart of the system, with the rules for using that data stored separately. This allows the business to be modelled in a realistic way such as modelling sales volumes, pricing, currency and seasonality to predict revenue. True multi-user systems allow this model to be segmented enabling distributed budget holders to plan only those elements which relate to their budget, but at the centre, the plan is automatically consolidated to present the complete picture. By creating a mirror of the finance system in the planning model, the actual data can be exchanged and budget information can populate the finance system. The outcome is a comprehensive, integrated planning system that can easily produce the board reports, providing graphical representations of actual versus plan, without recourse to spreadsheets for the reporting function.
If this sounds too good to be true, draw up a list of criteria for your investigation and make sure that the volume of data you need to model can be managed by the system. Make sure the system is true multi-user and that remote users can access the information they need over the web. When you have chosen a potential short list, have some of your own data modelled by the companies on that short list and finally, before making a buying decision, ask to talk to other users of the system.
Without it costing an arm and a leg, you can have the Power to Plan
See also: Other stories.
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