If you want to increase your team’s efficiency and improve the quality of business decisions through financial planning automation, rather than it becoming an expensive toy, you need to lay three foundations.
1. Top management must be ‘in the loop’.
Without management support, nothing will work. If bosses do not invest resources in the project or participate in it, the team will quickly lose motivation. Automation is not about ‘buying software and forgetting about it’, but about changing processes.
2. Clear rules of the game
You need to spell out your methodology for building your budget, management accounting and analysis. Without clear regulations, automation can descend into chaos — the system will work, but the data will be fragmented. Each department will continue to calculate things in its own way and the system architecture connecting the individual blocks will not be optimal.
3. The right software
It is important to choose a flexible and scalable solution that can be integrated into your IT infrastructure. Consider not only functionality, but also convenience, security and the ability to model different scenarios. Modern solutions are built on openness and transparent algorithms for users. In such a system, financiers are full owners, not ‘button pushers’.
What happens if you automate without methodology?
Technically, it is possible, and some companies do this: they first install the system and then adjust their processes accordingly. Modern low-code platforms allow you to quickly start collecting data and automating routine tasks thanks to their flexible configuration and the gradual development of solutions, from minimum viable products (MVPs) to full functionality. However, without clear rules, problems will soon arise.
Everyone believes that the system is ‘incorrect’ because it does not take their specific circumstances into account. Finance accuses salespeople of making ‘unrealistic forecasts’, while salespeople accuse financiers of being ‘out of touch with reality’.
Management receives nice reports but cannot be sure of their accuracy. Decisions are made based on ‘averaged’ or distorted data.
Rather than a well-thought-out architecture, there are temporary solutions and workarounds. Each user can set their own requirements and the system must be constantly ‘fine-tuned’. After a couple of years, it is easier to scrap the system than refine it.
People are used to working in Excel and do not want to switch to unfamiliar software. If the system is inconvenient and difficult to understand, employees will continue to duplicate their work in spreadsheets.
Automation without methodology is like building a house without a foundation. It will work for a while, but then it will start to fall apart. Therefore, even if you are starting from scratch, organise your processes at the same time. This will save you time, money and stress.
Liza Palitsyna,
Senior Business Planning Expert, Finance and Performance Management
Planingo
