Take the budget process on health check
The consultants Knut Fahlén and Malin Wennebro both have over 20 years of experience in supporting companies and organizations with increasing the power of control. During the month of December, they are used to meeting many frustrated managers and economists who are thinking about whether the autumn budget process really created the value that was plowed down through many and long working days.
Knut, what are the most common challenges that managers and economists have with the budget process?
The first thing that is mentioned is the time. Many find their calendars completely locked with budget meetings from October to December. This leads both to overtime and stress for the individual and that other prioritized initiatives in the business have to stand aside. The second thing that is pointed out is that it feels pointless and that things should be handled better than with countless rounds of negotiations on budget targets and "cheese-planing techniques" to bring costs down.
Is digitization the solution?
Yes, it can absolutely be part of the solution, says Malin, who has extensive experience in supporting the finance function with digitization initiatives. At the same time, she points out that it is crucial to start from the purpose and design the process based on it. If we streamline a faulty process, we become better at doing the wrong things. That can never be the point. However, today there is technology that helps us work in completely new ways, for example through customized BI solutions, driver-based functionality, simulation possibilities, etc.
How does a review of the budget process work?
Through a long series of assignments, we have refined a standardized methodology, fit analysis, which makes it possible to see problem areas and development opportunities in a short time.
The implementation includes a combination of interviews with key persons, compilation of survey responses, analysis and simulation of financial data as well as workshops to anchor conclusions and prioritize development opportunities. We believe in keeping the investigation part short in order to move on to the development work as quickly as possible.
Complaints about the budget process are nothing new, are they?
Maybe not, but I feel that the need to fix the problems is much greater today than, say, 10 years ago, says Knut. Reduced tolerance for inefficiency combined with increased unpredictability places higher demands on dynamism and ability to change.
This shows not least in the enormous interest in inspiration and education in the field, Malin explains further. I wish more people dared to take the first step, she continues. From a quick health check of the budget process, there are often many relatively simple improvements to explore. It is not about "throwing the baby out with the bathwater" but about shaping and refining processes in a controlled manner that better match the reality that organizations live with today. The biggest gains are often found in more relevant analysis and greater scope for important strategic discussions and decisions.
Contact Malin or Knot if you are curious about what a health check would mean for your organization!
