If you’ve spent any time being in a leadership role on a firm, you know that there is one annual task that nobody likes to do – budgeting. It’s a pain in the butt, you’re pretty much just guessing, and the final results never seem to have anything to do with reality. Hey, if everyone thinks this, then is it possible that this is an area where a CIO could step in and make a difference?
What’s Wrong With The Way We Do Budgets Today?
A great deal, actually. In most firms today at the individual department or team level managers create their annual budget using Excel spreadsheets. These spreadsheets are then collected and put together to create division budgets. Once again these are combined to create company budgets. The whole process seems to take forever and is often riddled with inaccuracies.
This whole process takes forever and is seen by everyone doing it as a chore. Once the budget is created, it is as though it was written in stone – it can’t be changed because to do so would take too much effort. Clearly this is not a good situation for any business that wants to think of itself as being dynamic and market driven to be in. Seems like a situation that is ripe for a CIO to step into and lend a helping hand.
Say Hello To Your New Friend: BPM
Business Performance Management (BPM) is a strategy that a company can undertake in order to use management methodologies along with IT technology to create a way to help them ensure that they are meeting their strategic goals. A simpler way of saying the same thing is that BPM allows you to create a real-time budget for the firm.
A BPM enterprise application allows budgets to be entered using web forms by all participants. This automates the process of “flowing upward” the individual budgets into an overall corporate budget. No longer can clever managers hid behind budget numbers and over promise while under delivering. Using a BPM system requires accurate forecasting on everyone’s part.
Welcome To The Real-Time
The use of BPM systems allows a company’s budget to become a much more dynamic real-time tool that can be constantly changing as you move throughout the business year. The use of both automated dashboards and scorecards allows individuals throughout the organization to see how they are doing relative to their budget at any point in time.
Once a company gets use to having a dynamic budget they’ll start to discover the other advantages of having a BPM solution such as having instant access to operational analytics.
Careful Does It
Although CIOs can quickly see how important a BPM system can be to a company, they need to move very carefully. It is all too easy to get caught up in the planning and execution details of implementing a major enterprise application and forget about the people involved.
Moving to a BPM solution requires a great deal of change within a company. CIOs need to understand that not everyone embraces change as easily as IT pros do. Instead of changing everything in one fell swoop, it is generally a much better idea to make a series of smaller changes. This allows a new way of doing business to be introduced gradually and gives the end users a chance to get use to how things are being done before more changes occur.
What All Of This Means For You
As CIO you always need to be on the prowl to identify ways that the IT organization can help the rest of the company use technology to operate quicker and better. Automating the annual budgeting process using a BPM solution is one way to accomplish this.
A BPM solution will allow web technologies to be used to enter individual budgets and will allow multiple budgets to easily be combined into a single corporate budget. Once a budget has been created, it can be monitored in real-time using dashboards and scoreboards.
CIOs need to take into consideration the human side of any such large-scale change. There will be resistance to such an automation project. However, the CIO who takes the time to understand worker’s concerns and then slowly rolls out the new system will win over the staff and just might single handedly make the company run a lot smoother.
Question For You: Do you think that a company would know what to do with a real-time budget if they had one or is this beyond their skills?
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What We’ll Be Talking About Next Time
One of the biggest challenges that you are going to be facing when you become a CIO is managing an IT workforce that is made up of multiple generations. Each has its own set of views and skills, and yet you have to somehow come up with ways that they can work together. How hard could that be?