The new age of Transparency, Accountability, and Participation in Business planning

Today, both small and large business enterprises are looking to become agile and resilient. Often, they start by trying to optimize their business processes. This is true even in organizations that have always depended on “traditional” legacy processes and systems.

An example of this is a bank that had managed its time-tested and robust processes using IBM Planning Analytics. Everything was working fine until their employees switched to the Work-from-home model following the COVID lockdown. Soon, the bank started facing challenges in terms of dealing with planning-related spreadsheets and user comments coming from different systems. A system that worked fine manually when people were close together, became cumbersome, slow, and outdated. In response, they further digitalized and embraced an app-driven model that could easily handle user inputs from many sources and perform all the data collating and curating.

This is how the right IBM solution can improve participation, responsiveness, and decision-making thus making business planning more agile and resilient.

4 Challenges in Budget Planning

Effective budget planning is critical to any business as it addresses changing market situations and limited resources. Budgeting is an integral part of business planning and can directly impact the company’s fiscal resource allocation and management.

Here are the 4 main challenges that companies face when it comes to budget planning:

1. Data inaccuracies
   To accurately plan their budget, companies need to collate all business expenses from multiple departments like HR & Recruitment, marketing, and product development. Manual modes of data collection take lots of time and can lead to data inaccuracies that can lead to improper allocation of budget resources.
2. High budgeting time
   CFOs spend hundreds of hours of their time in the budgeting process. As seen in the bank case study, executives using spreadsheets for budget planning spend a lot of that time consolidating the data and tracking individual budget items.
3. Lack of flexibility
   To create an agile business planning process, business organizations should be able to modify their approved budget regularly, in response to changing market conditions and economic trends. However, the challenge they face is that most business budgets are formalized at the start of the fiscal year and revising them is a herculean task given the many moving parts involved in the process.
4. Budgeting silos
   Too often, budget planning happens in organizational “silos,” with a lack of collaboration with other business functions or the organizational goal. Companies lack the proper collaboration tool for timely inputs from multiple stakeholders.

What is Enterprise Performance Management – and its common challenges?

Enterprise performance management (or EPM) is a high-level evaluation of organizational performance. At its best, an EPM solution is designed to help organizations operate at their maximum potential and meet their future goals and objectives. EPM is used to track various aspects of businesses including its budget planning, business execution, and overall planning.

Here are the 3 main challenges that companies face when it comes to performance
management:

1. Large data volumes
   With large enterprises, massive data volumes are generated every day from different sources. Accurate and comprehensive data analysis and gathering can be a challenge for organizations, consuming a lot of time and energy.
2. Lack of collaboration
   Quite often, some departmental processes are diligent and accurate in tracking performance, while others may not be so efficient. For effective EPM, enterprises must be able to transparently track essential data from all their business functions.
3. Inaccurate data analysis
   In the face of large data volumes and poor data gathering methods, it is difficult to have confidence that the data being analyzed is accurate. This can lead to inaccurate inferences (or conclusions) being derived from the data – that can have a direct impact on enterprise performance.

Can digital technologies play a role in meeting budget planning and enterprise performance challenges?

Let us check that out now.

The Digital Transformation of Business planning

In the age of digital transformation, business leaders are beginning to understand the value of transparency and accountability – and their value in achieving the desired business results.
To achieve business transparency, organizations need to put in essential building blocks
such as:
– Seamless sharing of data and information and widespread participation in the process
– Active communication channels that facilitate collaboration
– Breaking down of silos and organizational barriers

Enabled by transparency, accountability within organizations provides a clear view of:
– How does a particular business process work?
– Who oversees the process?
– What action was performed at any process stage?

When it comes to EPM, an Aberdeen survey found that 34% considered poor communication and collaboration as their leading concern, while the second biggest problem was inaccurate budgets and forecasts. Despite the effectiveness of automated EPM tools, the continued reliance on manual spreadsheets for budget planning is adding to this concern.

On its part, a digital EPM solution can transform business planning through:
– Automatic populating of datasets – thus eliminating any manual data inputs.
– Instant reports with data reflecting the actual organizational performance.
– Elimination of error-prone or inaccurate spreadsheets.
– Integration of data from ERP, CRM, and other systems – thus eliminating any data silos.

Conclusion

As pointed out by Agile process expert, Miljan Bajic, “organizational structures that have dedicated teams, shorter planning cycles, and high levels of transparency are more successful.” Digital technologies can play their part in bringing transparency and accountability into your business planning processes.

How can you enable efficient business planning across your business? As a long-standing IBM business partner, Veracitiz has provided varied solutions in enterprise performance management (EPM) to keep its customer businesses agile and competitive.

Want to know how? Contact us today.