Many companies - not infrequently owner-managed - rely on control mechanisms introduced at short notice, often depending on the situational business development and at the same time based on profit and financial data already received. The approach is understandable. Regularly recurring business processes, which require detailed knowledge of one's own business and decades of experience, facilitate the steering process. What should be bad about this? Obviously it works without planning and budgeting, although vehemently demanded by everyone. If it was always possible to counteract gaps in profitability and liquidity with simple means, the desire to look more precisely into the future will be increasingly neglected. It is also obvious, however, that risk assessment and any future opportunities that may arise could be lost sight of more quickly.
Question: We want a BI solution for planning, analysis and reporting. We have no concept and decide after various manufacturer presentations.
Answer: Without the creation of an internal specification sheet that describes the most important feature requests and defines the basic requirements, it will be difficult to make a sound business decision. In such cases, selection is often based on the only recognizable and obvious indicator - the license and/or project costs. We experience such construction decisions time and again in our daily consulting practice. It remains to be seen whether they are the right solution indicator.
Question: Our actual accounting system is not yet sufficiently well organized in terms of data technology. We torture ourselves again and again with quality improvements. However, we do not want to do without planning and would like to have a well styled planning.
Answer: Stand-alone planning without a reasonable actual data framework and consequently without targeted target-performance comparisons makes no sense. It would be better to orient the planning solution to the actual conditions and to adjust it regularly.
Question: In our ERP solution we use a complex and not always uniform module landscape (financial accounting, cost accounting, merchandise management, wages and salaries, ...). How can we guarantee a problem-free and permanently functioning transfer of actual data?
Answer: The transfer of actual data into the BI system must not currently cause any more problems. Two decades ago, the interfaces were not as well prepared as they are today. ERP systems offer export interfaces, just as BI systems offer a range of import procedures.
Question: There is a complex Excel solution for planning and reporting. We all know the advantages of MS Excel. Easy to learn, immediately applicable, simple methodology, wide range of features in the cell area, good analysis possibilities with pivot tables.
Answer: Replacing MS Excel with a database solution is significant in two ways. On the one hand, there is already a planning approach through the existing Excel solution. The process flow cannot be redefined, but it depends on the modeling options in the DB system and, above all, on the structure setup. The advantages in comprehensive read and write data handling, data storage, data aggregation and data distribution are, however, clearly given compared to MS Excel.
Does this mean that the abandonment of planning and budgeting is a serious management error? Everything about this can be found in the relevant literature. Preview can be simple, it can be prepared quickly and flexibly, it can be highly detailed or overly organized, it can be highly aggregated and reduced to a few sub-areas. In truth, it is all about one answer: What do those responsible expect from the new fiscal year? Taking all assumptions into account, can the company continue to exist, can it afford the plans and satisfy the owners? These questions should be asked and answered by a team of experts. Many cooks refine the porridge. Especially if deviations from plan/target and actual figures occur after only two to three months in the planning year already underway and are worthy of discussion. Are you confronted with questions such as whether it will be possible to make up for the dip in sales or whether it was caused by force majeure (environment, damage, seasonal effects, etc.) or management errors? In any case, the answers given by a team of experts are more binding than those given by sole decision-makers. In the expert team, each member has his or her own area of responsibility and will therefore be able to contribute his or her proposed solutions in a professional manner. Not to be forgotten is the associated motivation and information factor, which the team passes on to participants in all areas.
Nevertheless, the monthly control process must not be neglected as a time-critical compulsory exercise despite high planning accuracy and meaningful target/actual analysis combined with professional forecasting logic. Always reporting according to the same pattern and schematically, without putting together implementation and measure packages, will be too little. This goes hand in hand with a behavior control system that recommends which trend is emerging month after month and instructs how corrections should be made.
In our consulting activities we experience time and again that results are delivered according to internal standards without questioning them. It is not uncommon for a rude awakening to occur in the last month under review, because facts influencing the results during previous periods were not taken into account or were not discovered.
A general standard can be laid down quite easily. Corporate management is based on real, mainly financial actual figures. Inevitably in companies without planning focus. But of course also in companies with well-organized and modern controlling concepts. Because qualitatively equivalent plan and actual data make it easier to take countermeasures in line with requirements and, above all, more quickly, because a larger group of people in charge pursues uniform goals, knows the expectations originally set and will contribute a broader concept for partial solutions.