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In Business |
Automating the Budgeting Process
A number of companies, including
Texaco, Fujitsu, Sprint, Nationwide Financial
Services, Nortel Networks, Owens Corning, and
Xilinx have been attempting to reengineer
and automate the budgeting process. The goal is to eliminate the
conventional iterative budgeting process that often finds preliminary
budgets being passed up and down the management hierarchy many times
before final agreement is reached--wasting much time and resulting in
budgets that often don't reconcile. Apart from the tremendous
technical challenges of integrating diverse budgets from many different
operations, automation faces a high behavioral hurdle. As Greg Vesey of
Texaco states, "Planning is the most political of all processes to fall
under the finance function." Consequently, as many as half of all
automation efforts fail. Companies such as
National Semiconductor Corp. have given up entirely and have
returned to their old budgeting methods.
Source: Russ Banham, "The
revolution in planning," CFO, August 1999, pp. 46-56 |
