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In 25 years, has anything really changed for budgeting & forecasting?

Twenty-five years ago, I was a Management Accountant at Reuters, responsible for the budgeting and forecasting process for a large number of departments. Using Lotus 1-2-3 on my Compaq “luggable” computer I would around to all our London offices, tapping in budget numbers and saving them on 5¼ inch floppy disks. Back at my desk, I’d add them up (no doubt discovering that one of the disks was corrupted!) download actuals from an IBM mainframe, identify and calculate variances, then prepare the management accounts pack for the board. There was no time to go back to the managers to discuss the variances, so I was quite inventive with some of my analysis! The whole process would take about two weeks, and when we’d  finished, it was time to start all over again!

It’s a classic model that hasn’t really changed. Talking to clients, it sometimes feels like time has stood still. Of course nowadays Excel has replaced 1-2-3 and we don’t have to walk around from office to office to extract information from colleagues, we can do it all by email. And of course, laptops these days are genuinely portable!

But perversely, the whole process takes longer for most businesses these days. As every other aspect of commerce has sped up, budgeting and forecasting has slowed down, because of the sheer volume of data flying around.

That creates a conflict. Technology and the consumerisation of data have stepped up the demand for more and better intelligence on demand in ever more engaging and insightful formats.

Budgeting and forecasting professionals are buckling under the weight of Excel spreadsheets. They have to consolidate hundreds of them, because nowadays every manager, budget-holder and project manager is (or thinks so!) an Excel expert, with their own set of spreadsheets to record what they’ve done and what they plan to do in the future. Because Excel is relatively easy to operate, their spreadsheets hold more data and have more complex formulae… with the added bonus of random rows inserted that mess up the consolidation!

And to add to the challenges, strategy and operations heads are always changing their minds about what they most crucially need to know for decision-making, and about the way they’d like to see it.

Then of course there’s the pressure to maintain accuracy whilst shouldering this huge workload, often on the receiving end of demands from the most senior people in the business. There’s no room for mistakes in copying and pasting or a dodgy formula – just ask JP Morgan about that, in light of the “London Whale” debacle!

By Andes Loukianos, Sales Director, TouchstoneBI

Does this sound familiar?

Maybe it’s time to think about changing. Are you ready to move on from a process that’s stayed the same for 25 years while everything around it has transformed?

If you’re interested in a bit more information or to find out whether there might be a better way for your organisation, visit our Business Intelligence webpage here.

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