Whose Budget Is It Anyway? Technology Has the Answer

Don Mal

Technology is opening a lot of doors for finance professionals, but the question is how many other parts of the business are trying to walk through them, too.

In an ideal world, the budget should represent a moment of truth. Too often it feels more like a leap of faith.

When companies treat budgeting as little more than a guesstimate, it provides few mechanisms for senior leaders to meet business challenges. Just ask Kevin Held. The CFO for TradingScreen, which provides products to help hedge funds and other financial institutions, recently wrote an article for CIOReview called “Demystifying Budgeting and Forecasting Solutions,” that reflected both on how challenging it can be but also how advancements in business intelligence (BI) and related technology are greatly increasing what it’s possible to do.

One of the biggest gains we have seen from these systems is the ability to be able to change models and financial forecasts on the fly. Creating ‘what if’ scenarios and multiple budgets and forecasts can be done in a matter of minutes,” he writes. “As financial executives, we’re expected to be able to use information and make decisions from a strategic point of view. This functionality can be invaluable in modeling out new business lines or products and making those ROI determinations.”

It’s great to hear first-hand from a CFO about what technology can do, but the larger question may be how involved they can be in the analysis. CloudTech recently reported on a survey of large enterprises about who owns analytics and BI and the results were eyebrow-raising:

23% of those polled said the CIO was responsible for analytics, compared to 17% who cite the CFO. In contrast, only 4% of respondents said they have a chief data scientist in charge, compared to 9% for a chief data officer and 13% a chief analytics officer. With this in mind, there is also a distinct lack of consensus on the models that organizations adopt. The majority (44%) of respondents said they use a centralized model, whereby a central group oversees analytics development for the entire company, while 22% said they opt for an approach where individual business units govern themselves. 16% adopt a federated approach, which blends the two.

This should prompt some interesting discussions, both within finance and far outside it, about how things like budgeting should evolve as a practice.

As the survey suggests, there may be no one-size-fits-all approach to analyzing information. On the other hand, Held shows that more finance professionals are getting their hands dirty with tools that give them the ability to move quickly as data and circumstances change.

Ultimately things like a budget may require collaboration between finance, IT, and many other stakeholders, but the end result should be information in which everyone can believe.

The post Whose Budget Is It Anyway? Technology Has the Answer appeared first on Blog | Vena Voice | Vena Solutions.

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