Growing Pains: When Excel Is No Longer Enough for Your SMB

If the events of the past year have taught us anything, it is that we should expect the unexpected. With the initial wave of coronavirus shutdowns, revenues, expenses, and supply-chains underwent some rather dramatic shocks. Thankfully, governments stepped in to stabilize the situation, but in the wake of those events, volatility still prevails to a great degree. As a result, business leaders have come to a much deeper appreciation of the value of agility.

Agility, in turn, is dependent on the availability of accurate, up-to-the-minute information about what is happening both internally (within the business) and externally (in the marketplace). Forecasting and planning have taken on much greater importance than ever before. Concepts like continuous planning and extended planning and analysis (xP&A) have gone mainstream, as managers realized that annual planning cycles are no longer adequate to the task of running a business in the midst of a highly volatile economic climate.

For small and midsize businesses (SMBs), the prospect of shorter, more frequent planning cycles presents some significant challenges, though. The planning and forecasting tools provided with most ERP systems provide limited flexibility, and typically require a considerable amount of manual effort. Far more often, finance teams turn to Microsoft Excel, which offers virtually unlimited flexibility in a tool that is both universally available and highly familiar to business users throughout any organization.

Planning in the New Normal

Over time, the process that has historically been known as budgeting and forecasting has evolved. We now hear terms like enterprise performance management (EPM), which covers a broad spectrum of functions, including budgeting, forecasting, reporting, consolidation, analytics, and dashboarding. Financial planning and analysis encompasses a similar range of tasks within the finance domain.

More recently, those concepts have been updated to reflect a need for shorter planning cycles and more frequent updates. Gartner has coined the term “extended planning and analysis” (xP&A), implying a broader view of the planning process that extends far beyond the office of the CFO. Likewise, the concept of “continuous planning” has been a hot topic lately, as business leaders have identified a need to identify potential threats and opportunities more quickly and to respond rapidly to changing business conditions.

While COVID-19 has increased uncertainty for businesses across the globe, there are other factors that are prompting finance leaders to expand the range of their visibility into business performance and to increase the frequency of planning cycles. Businesses with a presence in Europe, for example, have sought more efficient means to model potential outcomes to the Brexit situation. Changing economic conditions and shifting government priorities provide grounds for further uncertainty. SMBs cannot afford to simply sit by and wait as such situations unfold. Smart business leaders will get ahead of potential problems by revisiting plans on a more frequent basis and taking action to mitigate risk, fend off threats, and seize first-mover status as new business opportunities emerge.

Why Your Current Processes Won’t Work Well in the New Normal

Typical planning processes require you to collect information from colleagues throughout the organization, compile it within a common structure (often consisting of multiple Excel workbooks), and discuss and revise it through a cross-functional collaboration process. Although finance typically owns the planning and budgeting process at its highest level, the finance team relies upon inputs from across the organization, and planning cycles typically involve a significant amount of back-and-forth discussion, negotiation, and alignment.

The practical implication of all that activity is that you devote a great deal of attention to the calculation of estimates, agreement on common assumptions, and alignment around the specific inputs to the forecast numbers. Each department has its own methods for coming up with that information, along with its preferred formats and supporting materials to build out forecasts.

The process of bringing all of those sources of information together into a single, coherent, and harmonized plan can be extraordinarily time-consuming, often involving manual processes to copy and paste (or to rekey) information from one spreadsheet to another. You spend an inordinate amount of time validating and cross-checking information to ensure that figures are up-to-date and reflect the current state of affairs and estimates flowing from each department.

It may be difficult to track down the communication that accompanies that process if the need ever arises because it is often buried in interdepartmental emails. If a user fails to include a key stakeholder in any of those communications, the plan may suffer as a result. You can also inadvertently share figures too widely via email communication, leading to the unintended disclosure of confidential information.

As you pass around multiple copies of draft documents edited by multiple people among colleagues, you can run into the problem of versioning. When more than one user is responsible for providing inputs to a single spreadsheet, it inevitably raises concerns about version control.

If your organization is operating according to an annual planning cycle, then all of that fragmented activity may be workable. As the frequency of planning cycles increases, though, the effort involved with updating plans using those kinds of manual processes becomes untenable.

Scenario modeling, likewise, is a huge asset for organizations seeking a stronger foundation for executive decisions.  It gives you the ability to not just have a plan A, but also to evaluate plan B, plan C, and more. But, as the number of scenarios under consideration increases, though, the conventional methods for compiling data and developing those models create more and more of a burden to the organization.

Many business leaders use scenario planning to extend their view beyond the typical one-year planning horizon, and even beyond the three-to-five-year strategic planning window. Managing the library of spreadsheet-based scenario planning models to maintain a cohesive long-term view of the future can quickly become unwieldy.

Finally, the current business environment calls for a broader organizational perspective on planning and forecasting. In a volatile environment, it makes greater sense than ever to incorporate input from throughout the organization. As you bring more people and departments into the process, though, it becomes more difficult to manage. You need specialized tools if you are to rein in that complexity and bring order to the chaos.

Leveling-Up Your Planning Process

Effective management of a continuous planning process calls for a different approach. Purpose-built planning and forecasting tools can offer the simplicity and familiarity of Excel while incorporating the robust collaboration capabilities necessary to collect and process input from stakeholders across the organization. By doing away with a fragmented approach that relies extensively upon manual processes, finance leaders can increase the frequency of planning cycles while reducing the overall time and effort required to perform planning and forecasting activities.

Bizview from insightsoftware is a robust, web-based planning tool that enables managers to increase planning cadences by facilitating collaboration across the organization. Bizview simplifies planning processes, increases accuracy, and supports managers in driving smarter business decisions.

Bizview adds value to your planning and forecasting processes in the following ways:

• Familiarity and simplicity: Easy configuration of planning forms, reports, and dashboards makes it easy to extend planning beyond the finance department. Bizview’s familiar spreadsheet-like web-based interface offers anywhere, anytime data access on any device, without having to manage multiple spreadsheets and versions.
• Adaptability: Bizview’s modern, flexible technology lets you handle any number of planning dimensions and easily integrate operational and financial models without sacrificing detailed granularity. This makes it easy to create flexible planning models that reflect how your business works.
• Collaboration: Bizview enables organizations to design workflows to ensure efficient and effective process management. Automated emails and multi-level approvals make it possible to shrink cycle times and enable continuous planning and rolling forecasts.
• Integration: Bizview connects to a wide range of data sources, including Microsoft Dynamics (NAV, AX, D365 Business Central, D365 Finance & Supply Chain Management), Visma, Acumatica, and many other ERP systems, databases, and analytics tools. Bizview also works with Microsoft Sharepoint, Power BI, and Office 365, and you can integrate it with any ODBC or OLEDB data source.
• Rapid time to value: Bizview comes with pre-built content and connectors, and its shallow learning curve makes for quick, low-risk implementation and low total cost of ownership.

Bizview enables you to spend less time tracking down information, consolidating data from multiple sources, and validating numbers. That allows finance teams to focus on the higher value activities around analysis and strategic planning. As planning cycles shrink to provide a clearer view of the road ahead, technology tools make it possible for businesses to scale and adapt in ways that previously were not possible.

If your organization has outgrown Microsoft Excel as a planning and budgeting tool, if you are seeking to incorporate input from a broader spectrum of stakeholders in your organization, or if you are struggling with the chaos that arises from manual budgeting and forecasting processes, insightsoftware can help. Contact us today to arrange a free demo, and download our free guide, Eight Key Factors to Consider when Evaluating Continuous and Extended Financial Planning Software.