6 Ways BI Can Improve SMB Budget Planning

Is budget season making your team break into a cold sweat? Consider these ideas for using BI to improve budgeting and forecasting processes.

Kevin Casey, Contributor

September 26, 2011

5 Min Read

12 Brawny Business Intelligence Products For SMBs

12 Brawny Business Intelligence Products For SMBs

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A new year looms around the corner. Do you know where your 2012 budget is?

If budgeting and forecasting causes company-wide indigestion, consider how business intelligence (BI) could help. Whereas true BI was once the province of large enterprises, there are an increasing number of tools suitable--and affordable--for small and midsize businesses (SMBs).

And BI isn't just for monitoring and predicting customer behavior. The right mix of software and processes can help streamline budget planning and improve the accuracy of your forecasts--and better enable SMBs to adapt to changing conditions during the course of the year. You can even apply a data-driven mindset to your planning and submission process. Dwight deVera, senior vice president of solutions delivery at Arcplan, suggests these six ideas for streamlining budgeting and planning by better integrating with your BI.

[ You can't crowdsource your budget, but there are other benefits to the using the wisdom of the crowds. Read Crowdsourcing For SMBs On A Budget ]

1. Graduate from spreadsheets.

Microsoft Excel is the de facto budgeting and planning application--and often an ad hoc BI tool, too--for many smaller companies, but at a certain point in your company's growth it's time to step up to a more sophisticated platform. deVera considers the benchmark to be around $35 million in annual revenue. At or around that point, a growing number of cost centers--and corresponding maze of spreadsheets for each--can become burdensome.

"It becomes an exercise in having some very talented finance professionals spending the football season slicing and dicing and sending and retrieving spreadsheets," deVera said in an interview. "You can bring order to the chaos."

Consider adopting dedicated budgeting software--and do so as part of a broader BI project. Sometimes such applications fall into the corporate performance management category rather than BI or analytics.

2. Integrate software and processes.

deVera notes that the best BI tools in the world can't do much to help entirely manual budgeting and planning processes. The effort required by, say, 100 different spreadsheets is too painful

"When you don't have a centralized budgeting and planning repository, it doesn't matter how talented your BI tool is," he said. "You'd need a lot more interns."

Look for software that's flexible enough to support existing processes rather than starting from scratch. (Unless those existing processes stink--in that case, send them to the scrap heap.) Make sure it's easy to hook up to existing data sources without major pain. Ideally, it should include customizable templates for planners and other end users. And if it's a Web-based platform, make sure offline planning is available if possible.

3. Create organized workflows.

If you build a logical lists of steps in the planning process, you can better monitor performance throughout the year. In other words: Apply the same monitoring and analysis to the actual budgeting and forecasting process as you do to other data sources. Doing so will help mitigate potential issues before they turn into major problems, and identify opportunities for improving the process.

4. Collaborate.

You can save yourself a good bit of time, money, and general budget angst if you hand the keys to your budgeting and planning system over to the operational departments that need them. Granting access and ownership to those stakeholders can free you up for more important matters. It can also lead to natural efficiencies when planning season kicks into high gear.

deVera said the biggest mistake some firms make is to effectively say: "OK, we're done with the budget. Put that system on the shelf and we'll talk to you next September." If that's your approach, deVera said you're likely to hear this question the following fall: "Wait, how do we do this again?"

Granting real ownership of budgeting and BI software throughout the year will help keep stakeholders more aware and agile as it becomes a part of their regular business practices. That in turn can help the company better track performance and make necessary changes.

5. Embrace re-planning.

An integrated, collaborative approach can keep your business more nimble as market conditions evolve during the course of a year--or change in an instant. According to deVera, your budgeting and planning strategy should include re-planning, monthly and rolling forecasts, and "what-if," "best case," and "worst case" scenarios that allow your company to adapt. While you might think of the budget itself in annual terms, you should consider planning as a continuous process.

6. Go mobile--with a catch.

When it comes to budgeting and planning, deVera said SMBs should absolutely embrace mobility as a means for information sharing and consumption. While he's all for mobile BI and analysis, deVera doesn't think planners and other stakeholders should enter their budget plans on their iPads or other mobile devices. A primary reason: Auto-correction.

"Sometimes, auto-correct [works] and sometimes it produces a tragic result," deVera said.

Even if you turn auto-correct off, deVera thinks using a traditional keyboard will ultimately save time and prevent mistakes in the process. "CFOs ask: 'Can we do our planning on the iPad?' The answer is technically, yes, but we really don't recommend it," deVera said.

IT is caught in a squeeze between requests for new applications, services, and device support and demands from upper management to keep budgets lean, staffing light, and operations tight. These are irreconcilable objectives as long as we spend the vast majority of our resources on legacy services. Read our report now. (Free registration required.)

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About the Author(s)

Kevin Casey


Kevin Casey is a writer based in North Carolina who writes about technology for small and mid-size businesses.

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