Harness the New Power of Budgeting and Planning In The Cloud

Posted by Senior Consultant

Jun 27, 2018 10:09:07 AM

Harness the Power of Budgeting and Planning

Today, the big initiative at enterprise software companies is migrating their existing solutions to cloud platforms.  The benefits to moving to a cloud platform generally revolve around greater flexibility and efficiency. Flexibility meaning that IT services can be scaled in real time to fit the needs of the application users.  Efficiency speaks to the ability to deploy applications and services rapidly without worrying about underlying hardware / infrastructure issues.  The mantra is that once you are in the cloud, all you need is an Internet connection. The problem... Many finance organizations are not harnessing the true power of budgeting and planning in the cloud.

Generally, these benefits are often only the consideration of the operational IT people.  But think about what these benefits mean to finance and the business stakeholders – the USERS of these applications. 

Think about the business activities surrounding budgeting and planning.  Over the past , say 20 years, what issues have organizations faced with respect to issues arising from a comparative lack of flexibility and efficiency when they are going through a budgeting cycle?

CASE:  Babysitting the Application…

In 2003, I was a shiny new VP of IT Finance for a large health insurance company headquartered on the West Coast.  The company was brand new to Oracle Hyperion Planning.  We had some very complex calculation scripts that allocated our “in-flight” IT budget to each product the company offered – sending about $1 billion worth of allocated costs to SBU’s and each of their products every time we updated the budget.  Because of errors in the calc scripts prepared by outside IT consultants (not planning and budgeting SME’s), the last round of allocations confused dollar-based allocations with FTE-based allocations.  This instance was how I learned what a sextillion was. The result was politically embarrassing.  Our CIO was asked by the Board of Directors, “How many space shuttles are you building next year?”

So, as the calculations ran at 1am, I was sitting in my office monitoring the application and the sequential calc scripts.  I was babysitting Hyperion.

A little background…  The company had skimped on the hardware budget for Hyperion Planning.  Only a minimal footprint was anticipated.  As we, the stakeholders, became involved, it became clear that we needed a pretty complex hardware footprint – dedicated servers for calculating several distinct and complex scripts rather than a single server housing everything. 

In addition, we had a spaghetti-bowl of applications competing for resources across the network.  Also, the deployment was simply flawed.  It had been rushed through to meet a date and did not bring user stakeholders into the process.

As a result, I was babysitting the finance application through the calculations from 1 a.m. until the staff arrived at 8:00 a.m.  Any of you out there remember these nights?

Fast forward…  How could today’s cloud-based Hyperion solution, Oracle PBCS, have helped me?  Well, I’d have likely been at home in bed, fast asleep.

At some point in the life of your business, the budgeting and planning process will need to evolve from manual spreadsheet purgatory to an automated, transparent process that aligns with your business goalsy. Here are some ideas on how to streamline and modernize your budgeting and planning process.

Why?  The migration to cloud-based finance solutions would have meant that the SME stakeholders would have been directly involved in deploying the solution with minimal involvement by IT.  Artificial Intelligence (AI) “bots” would have guided the SME’s budgeting and forecasting process through the complete deployment.  People who KNOW the difference between FTE’s and dollars would have been defining the calculations using bots and other AI features.

Cloud-based Hyperion Planning would have negated the need for a specific hardware/infrastructure budget.  The resource requirements would have been managed in real-time as with the rest of the cloud applications.

In summary, the flaws and constraints of this situation would have been directly negated by the very nature of cloud-based AI-enabled versions of this application.

Fast forward to today.  You are considering – or being pushed towards – abandoning an on-premises version of your budgeting and planning tool.  You’re probably resistant because it’s giving up the devil you know for the devil you do not know.  At the core, you remember the pain involved in getting the on-premises version up to where you have it today.  See above?

Now, the cloud is not a magic bullet.  That said, it eliminates much of what business stakeholders hated over the last 20 years; the feeling that you’re held hostage by an IT black box in order to get your processes done.

An agile, cloud-based approach to budgeting and planning reduces risk, gets to value faster, creates less waste, and is more likely to make your stakeholders happy. So why build your finance system any other way?

Budgeting and planning in the cloud offers:

  • Real-time visibility of the state of the finance application and its processes from any Internet connection.
  • The powerful AI and Predictive Analytics, and the flexibility of managing computing resources that allow you to build scenarios within the applications. No more sending your Excel guru’s off to “build something” overnight – hoping it’s even directionally correct.
  • Clear and portable analytics allow you to see the “state of the budget” anywhere and anytime.
  • Agility to respond to changing reality without derailing your budget calendar.
  • Budgeting and Planning TRANSPARENCY! Which also translates to one version of the truth.

Again, over the last 20+ years, evolving technologies have made promises to help make processes like budgeting and planning easier and more effective.  The promise to free us from “spreadsheet hell” only traded that devil’s bargain for another; dependence on non-SME IT resources.  The cloud really does empower us to evolve our view of budgeting and planning.  Life really is better in the cloud in this case.

Guest Post by Todd Hayes:

Todd Hayes

Todd is a seasoned IT Finance and compliance technology professional. Todd carries twenty-five years of experience in building and deploying IT operational and financial transparency, both in the private sector, and the defense and intelligence arenas.  (TS/SCI clearance and projects with DIA and USAF Intel.) Todd has presented technology solutions at Gartner's London Conferences as well as DODIIS (Department of Defense Intelligence Information Systems) conferences.  He has built data warehouses and data marts from the ground-up using native SQL tools and has implemented Oracle/Hyperion-based repositories and budgeting/forecasting systems. Learn more about Todd on LinkedIn.

Topics: Budgeting and Forecasting, Cloud Hosting, Hyperion Planning, Oracle PBCS, Enterprise Performance Management (EPM)