Robert Kugel's Analyst Perspectives

Just Buying Software Does Not Add Value

Posted by Robert Kugel on Oct 4, 2011 10:02:57 AM

I read a blog post by Ben Lamorte, VP of marketing and sales at Alight Planning who delivers business and financial planning applications, who askswhy financial reporting tools deliver no business value. This led me to think that there are more than a few ways to waste money buying software, but I want to focus on one of the most common ones: assuming that having a new application will automatically improve your business (or believing a vendor who tells you that it will).

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Topics: Planning, Agility, Operational Performance Management (OPM), Reporting, Budgeting, Business Collaboration, Business Performance Management (BPM), Financial Performance Management (FPM), Workforce Performance Management (WPM), innovation

Budgeting Is So Unimportant

Posted by Robert Kugel on Jun 8, 2011 1:08:35 PM

I think one of best epigrams attributed to Mark Twain is, “Everyone talks about the weather but nobody ever does something about it.” This also has relevance to the situation with corporate planning and budgeting. Bemoaning its lack of value and calling for some sort of change goes back a long way, but few companies have matured their process. In the 1970s something called “zero-based budgeting” was all the rage in business and accounting periodicals. It was energetically advocated by President Carter to counteract the incremental budgeting that made it so difficult for the U.S. Congress to cut spending. (Of course, nothing changed.) Efforts to reform budgeting gathered steam in the 1990s as software vendors began offering dedicated applications designed for planning and budgeting. Even if one doesn’t fully embrace the idea of going budgetless, the book Beyond Budgeting is full of sensible management approaches (such as using league tables for internal benchmarking or using relative rather than fixed measures of performance). Of course, unlike the weather, people can change company practices. Yet when it comes to budgeting and planning, the same old stuff persists even as people like me continue to point out how using the right software can help transform the process into a valuable business tool. I’ve discussed why it’s important to adopt integrated business planning from my research, in which the budget is an automatically generated end product of the process, not the objective itself. And I’ve explained why driver-based planning produces better results. If it were just me advocating change, I might take its absence personally, but there have been scores of people, libraries of books and years of webinars focused on this topic for decades. Why has so little changed? 

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Topics: Planning, Predictive Analytics, Agility, Operational Performance Management (OPM), Budgeting, contingency planning, Business Analytics, Business Collaboration, Business Performance Management (BPM), CFO, finance, Financial Performance Management (FPM), Sales Performance Management (SPM), Supply Chain Performance Management (SCPM), Beyond Budgeting, Financial Performance Management, Integrated Business Planning