Budgeting and planning is a critical organizational function. However, when it comes to selecting and implementing financial applications it is often little more than an afterthought. Organizations tend to focus on a solid general ledger to capture transactions and a proven operational system to handle day-to-day needs. After those are in place, why not just enter budgets and get reports from the general ledger?
Many financial executives realize that budgeted account balances are only one outcome of the planning process. More important is the depth of understanding over the assumptions that underpin the budget, the drivers that affect profitability, and the ability to articulate the impact of different organizational scenarios on financial forecasts. There are multiple applications available in support of this process. Some are on premise platforms and, increasingly, there are cloud-based options.
Here are some considerations for organizations to think about when choosing a cloud solution:
- Target Audience: The budgeting and planning process reaches across the entire organization in ways other business applications do not. As a result, the budgeting team tends to include some users in finance, operational managers, sales, and executive team members. Using a cloud solution removes any functional and licensing implications tied to existing applications. As an example, while a VP of Sales needs to participate in the planning process, she may not need access to the general ledger system. Keeping budgeting and planning in a separate cloud application allows for that application to be tailored to the unique needs of the budgeting process and the licensing requirements to be met “as needed.”
- Workflow: Collaboration in the budgeting process is of particular importance as disparate contributors need to work together to meet very specific deadlines for various budget iterations. In many organizations that rely on Excel budget models, this has to be done via email and file versioning. Using a workflow-enabled cloud application provides a simple way to leverage technology to achieve the required level of coordination and provide visibility to outstanding tasks.
- Reporting: Employees and executives increasingly expect immediate access to key information anywhere, anytime, and on any device. This level of connectivity is easiest to achieve with applications that are designed to be accessed via the cloud.
- Flexibility: On premise applications are by their very nature dependent on the technological infrastructure of an organization: servers, operating system, database platforms, web servers, internal resources, and third party vendors. Implementing enterprise level software can require significant capital to get started on day one. Cloud applications provided via a subscription model turn this dynamic upside down. Organizations can sample full featured systems at very little cost. Even if needs evolve to a point where switching to a different application becomes warranted, this can be achieved without having to invest additional capital.
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