Escaping Excel Hell - Planning, Forecasting or Budgeting?

In marketing, there are a number of words that illicit a positive response. "Profit" "Free" and "New" are just three examples

So what reaction do you give to these three words:

• Planning?
• Forecasting?
• Budgeting?

Planning can be fun. Forecasting can be a bit tiresome. Budgeting is a real turnoff. That means setting constraints on spend, and setting demanding targets to achieve in revenues. Budgeting is also typically hard work, taking far too much time and energy away from actually doing the business.

But planning, forecasting and budgeting are all important. You may indeed use the same Excel model for all three. If you are you're likely to find:

• Issues with multiple users
• Difficulty in ensuring the models don't break
• Uncertainty whether the model calculates or adds up correctly, within a sheet or when sheets are added together
• Impossible to handle more than a few products or dimensions such as geographical areas
• Multiple versions that are soon out of control
• Needing to link P&L to balance sheet and cash flow, especially if funds need to be raised
• Far too much time spent overcoming these issues

There comes a time when Excel just has to be replaced. But with what? What's affordable, accessible and practical? Do give us a call.

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Business Performance Management - Forecasting and Reporting with SaaS

Recently I attended a seminar about a cloud SaaS-based planning, budgeting and forecasting system.This has been built by people from a background with leading systems such as Hyperion and Cognos Planning. Potentially very valuable, for businesses that can't afford such tools, or want something more flexible.

There were a number of general points made at the seminar:

1. For a start-up business, flexibility in design of the financial model is key. But as the business becomes established and grows, very soon having a rigid structure becomes more important (subject to the next point). 
2. However forecasting needs and business structures tend to change, such as with re-organisations. The modeling system must be able to cope
3. Whilst Excel provides ultimate flexibility, its drawbacks are significant - difficult to use in a multi-user situation, easy to get formulae wrong, difficult to roll up a consolidation, and needing constant checking (to name a few)
4. Would you use Excel for an HR or CRM system? So why for one of the most important functions of a business, its financial planning?

Well until recently planning systems of any note were the preserve of the richer businesses. These systems typically require involvement of IT personnel to make changes. This means planning users are then not able to control the model themselves, and more importantly when. No wonder many prefer Excel, where the model is all under their control.

Whilst there have been a whole string of systems that leave control in the hands of the users, these have tended to come and go as technology has changed. The power of Excel has killed off many of them, despite Excel's shortfalls. Just one or two of the other systems of note remain.

A good planning system will provide, especially by comparison to Excel:

1. Automatic consolidation roll-up (of regions, departments, business units etc)
2. Multiple dimensions (customer, territory, etc) that is just impractical in spreadsheets
3. Formulae applied consistently, such as working out employee on-costs
4. Clear data input sheets that won't break Excel
5. Easier version control
6. What-if on multiple scenarios, far quicker than using Excel
7. Overall a substantial reduction in cycle time and cost, where the analysts spend less of their time on administering the system and more on planning and review

The cloud opens up additional possibilities.:

• One system that can be accessed for input and review worldwide, wherever there is an internet connection
• Encryption of the data and/or definitions, so that the "picture" can be kept confidential (no need to email Excel around for review on unsecure email)
• Strong backup and recovery potential - often lacking when using Excel

This particular cloud SaaS software can be run in the cloud on a shared database, or on a dedicated database. The latter allows the user to decide when the version upgrades take place - something to avoid in the middle of an intense planning process. The software can also be installed on the user's own internet server if required.

With a 3-user system around £2500pa (or £1500 for 1 user) for the basic version, this entry point means the power of a full corporate-grade planning system is now available to even a reasonably small business. It can also cope with many more users than that, and payment only follows need.

Whilst it is not sold principally as a reporting tool, it does include actual vs budget reporting, including dashboards. With the correctly-structured database behind it, you can drill down not only into budget detail but also the transactions behind the actual numbers.

If you would like to talk about this and other planning / forecasting system solutions, do contact me by email at challisc @ camwells.co.uk or by phone on +44(0)1628 632914