Choosing and implementing a software solution: preparation, planning and design can go a long way toward ensuring a successful installation of budgeting systems. So can a solid database model foundation and strong template designs.

Financial departments too often utilize too many means and resources in an attempt to compile timely and accurate budgets. The process can end up taking weeks to complete because many organizations are not maximizing their potential. Becoming a successful finance department requires running an efficient and effective planning cycle which, in turn, requires having a reliable planning software solution in place.

Finance departments must recognize a simple fact: Excel is not a budgeting product. While Excel may be terrific for data entry purposes, calculations, formulas and reports, it was never designed to be a database and to consolidate data information across an enterprise. Nevertheless, many organizations rely on Excel to document their budgeting process.

As finance departments continue to use Excel, they tend to become victims of "spreadsheet hell"--the result of data entry and linking errors, files not being updated and files being sent via email. This alone can be justification for turning to a planning and forecasting software solution provider.

Choosing a Software Provider

When entering the planning software selection phase, ask yourself, "How will this product consolidate behind the scenes?" The software should allow for distributed users, from across the city to across the world, to enter their data and have it all consolidate in one place, allowing budget managers to see immediate results on demand. The system should be able to bring everything together smoothly and efficiently so that once the data has been inputted, the end-user can simply run a report.

While choosing a software vendor can be an intimidating and overwhelming experience, it doesn't have to be. By following several guidelines, you can be confident that your organization has chosen a vendor that best meets your business needs.

The initial step requires allocating time for a selection period and, within that time frame, evaluating three or four vendors. If it is unclear whether a vendor can satisfy your requirements, ask it to perform a Proof of Concept (POC). It is important that during the POC, the vendor can demonstrate that its product is equipped with the functionality you require. It is equally important to select a vendor that you sense is accompanied by a strong team that can maintain the product from both an implementation and a support perspective.

Once the vendor has proven its product and staff can handle your budgeting process, ask for references; these should provide you with a good idea about the product and service the vendor offers. However, be aware that every company does budgeting differently; even within the same industry, companies apply varying methodologies and formulas.

The vendor you choose should have a record of successfully navigating through the budgeting process with other companies. A vendor with insufficient experience may not be suitable to handle all of the challenges that might present themselves during the software implementation process.

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Implementing the Solution

Knowing where you want to go and being open to new ideas will help you effectively attain your goal. Prior to the actual implementation and system design, it is essential to have a clear vision established as to where the project is going and what the end result will look like. It is not enough for project managers to simply drive the project; strong leadership will help guide the team and will give them a point of contact throughout.

Along with strong leadership, having a specialized internal implementation team comprised of the right people from the right departments is critical. This team should have designated individuals acting as support contacts (or whatever facet necessary for the project), and they should allocate a percentage of their time to building templates, building the system or working with the consultants hired to build the system. IT support is an integral component of the team, and, as such, their project plan needs to include automation and server setup, since they are going to be responsible for supporting the server once the system goes live.

From a best-practices perspective, spending sufficient time on a solid design will go a long way in decreasing iterations on template and report design and on the backend systems design.

Just as important as knowing where you want to go is getting there in a timely manner, which involves setting timelines and work plans to help avoid rushing the implementation. When the process is rushed, both the client's and vendor's resources are taxed, and there may be issues such as overtime or allocating more people to the project than expected. Some companies have spent six months evaluating vendors and two months implementing the solution.

Another time issue that often appears during the later stages of implementation revolves around templates, with some companies spending more time tweaking the aesthetics of the templates than actually building them. When undergoing a quick implementation, fonts, colors and where items are located should all be secondary to ensuring that the correct data is on the screen and being sent into the database. A good practice is to get the system looking acceptably functional and creating a short implementation dedicated to the visual aspects once the system has already gone live.

Seven Implementation Milestones

1 Joint Application Design. Once the vendor has been chosen, it is best practice to have an onsite, detailed design session (this can range from one day to a week, depending on the project scope), with the key objective being for the members involved to get a clear understanding of the finished project. They should walk away knowing what information needs to be captured, what the data structure in the back end consists of, the reporting requirements, automation and how the data is going to fit in. In order to build a truly effective work plan that can drive the team, everyone must have a vision of the resulting system from data entry to final reporting.

Consider a couple of instances from the author's experience. Once, he showed up, only to discover that there were two people involved in the design session, but neither had prepared anything. When visiting another client, he was handed a thick binder outlining how the team wanted each section of the implementation to go. The templates were laid out, all the appropriate people were in the room and the entire process was planned out from start to finish. Although not everyone can invest the time for such elaborate preparation, it is better to be over-prepared than under-prepared.

2 Workflow. To help avoid scope creep, build a detailed work plan consisting of dates and deliverables. The vendor implementation team should work with the client to develop a list of tasks which both teams agree on before proceeding with the project.

3 Database Model. An inadequate design may have consequences in the later stages, requiring the team to backtrack and make changes to every single template, report and process. The back-end database model is the foundation of the entire system and needs to be solidly established before delving heavily into front-end development.

4 Building Templates and Reports. Having a well-designed template and report specification prior to development can significantly lessen development efforts by eliminating the need for multiple building iterations while the concept of the template is adjusted and tweaked.

5 Automation. A superior budgeting solution implementation will virtually run itself with minimal information technology (IT) involvement. Issues will inevitably arise, but on the next full run of the automation process, a well-designed system will fix itself (assuming the data integrity is solid).

6 Documentation and Training. Providing clear and concise documentation and training will help ensure that the client is independent in using the system, saving both time and money. System users need to be trained on both the technology and the behind-the-scenes activity from a business perspective. Simply demonstrating how the user interface works isn't good enough. The customer's objective should be to maximize its involvement in order to minimize the handoff at the end of the project, giving it ownership and the ability to maintain the system.

The purpose of the documentation is to gain a thorough understanding of what's going on, because the system's users are going to be held accountable. Aside from the main system documentation, it's always best to create a concise user document outlining the basic system functions. It is also beneficial to provide users with a budgeting document as to what's expected from the various templates. Small actions such as this can go a long way in preventing the support staff from handling simple support calls.

7 Measures for Success. These include meeting the project budget and the established deliverable dates. The project should be measured by both client and vendor, with each evaluating the success of the budget, including effectiveness of training and consulting and reliability of the product.

A successful budgeting implementation consists of choosing the proper product to meet your requirements, a qualified and knowledgeable implementation team with strong leadership and clear vision, a well-designed and agreed-upon work plan, solid database model foundation and strong template designs. Following these best practices will help ensure you have a smooth implementation and effective system in place, increasing your finance department's efficiency.

Jay Nish is Director of Consulting Services for Clarity Systems, a business intelligence software provider based in Toronto. He can be reached at 416.702.5615.