At Clarity Solutions, we specialize in developing high-performing planning and budgeting software tailored to meet the dynamic needs of modern businesses. Our solutions are designed to streamline processes, enhance decision-making, and drive efficiency across industries. By leveraging cutting-edge technology and our deep domain expertise, we deliver robust tools that empower organizations to plan smarter, allocate resources effectively, and achieve their financial goals with confidence.

The planning process — planning, budgeting, forecasting, analysis and reporting — presents a formidable challenge to many companies, regardless of size or industry. Planning is a crucial component of financial performance management and it can contribute greatly to a company’s overall success or failure, especially in times of volatility and disruptive competitors.

Despite its importance, planning — and especially the annual budget process — is often seen as burdensome and time-consuming. Forward-thinking organizations, however, realize that when planning is dynamic and based on input from across the enterprise, it offers enormous opportunities to drive process efficiency and business insight.

Leading companies are taking advantage of new technologies and employing well-established planning and forecasting best practices. When they do, they are rewarded with more accurate plans, more timely forecasts and re-forecasts and more effective decision-making. Overall, these tools and practices can save time, reduce errors, promote collaboration and foster a more disciplined financial management culture that delivers true competitive advantage.

Specifically, such companies are able to:

• Consistently deliver timely, reliable plans and forecasts, along with contingency plans.
• Analyze situations where performance deviates from plans and promptly take corrective action.
• Strengthen the links between strategic objectives and operational and financial plans.
• Improve communication and collaboration among all plan contributors.
• Enhance strategic decision-making, enabling leaders to quickly identify, analyze and forecast the impact of changes as they occur.

Planning challenges and process problems

Corporate decision-makers often voice similar complaints about traditional planning, budgeting and forecasting.

• Low-value activities take up the greatest portion of staff time.
• Plans are quickly out of date.
• Forecasts and reports are not frequent enough.
• Insight into causes is insufficient – and leads to shadow systems.
• Planning participation is too limited.
• Existing applications and spreadsheets are inflexible and do not support a dynamic environment.

Origins of planning challenges

Over the last two decades, companies have devoted considerable resources to implementing enterprise resource planning (ERP) systems. Yet most planning is still performed using spreadsheets, email and countless staff hours — an inefficient approach that is costly in the long run because spreadsheets are not designed to support organization-wide planning and forecasting processes. Sometimes the planning systems themselves can actually impede business responsiveness. The inhibitors are numerous:

• Business rules (formulas) are mixed with data and prone to corruption.
• Files are exchanged frequently, leading to version control issues.
• Cross-company teams cannot work together easily.
• Presenting or analyzing data from different perspectives is difficult.
• Data aggregation is complicated and time-consuming.
• The business model is not represented well, if at all.
• Complex calculations, multidimensional analysis and reporting are often impossible.

Model business drivers A useful plan or forecast is based on a model with formulas tied to fundamental business drivers. Simply importing and manipulating past actuals does not reflect the underlying operational causes and financial effects in a business. Building driver-based models into plans ensures consistency across functions and promotes planning coordination among functions. For example, by understanding the sales trends and profitability related to particular household products that may enjoy steady sales during an otherwise slow period, a retailer can balance product mix, marketing, inventory and sales expenses to optimize profits. Finance can provide operations managers with a model that includes information about past actuals and current inventory levels and marketing promotions as well as formulas driven by planning assumptions.

Support from Finance does not infringe on department managers’ responsibility for creating their own plans. Instead, it saves them time by providing a solid, factual baseline — a starting point that contains important information about their departments’ relationships with other functions. Managers can then make adjustments to this baseline to reflect the latest business conditions. This approach also encourages collaboration across functions.

Key qualities of a modern solution

When evaluating and selecting planning, budgeting and forecasting software, leading organizations look for solutions that meet these top-level requirements:

• The ability to rapidly change models based on input and prototypes from business units and to frequently re-forecast enables companies to respond to business changes as often as necessary.
• Information is always current because line-of-business users contribute directly to a central planning database. Consolidations and rollups are done automatically, so deadlines are met more easily.
• Planning, analysis, workflow and reporting reside on one common platform. Managers do not need to maintain “shadow” planning systems.
• Web-based, distributed planning enables participation anytime, anywhere with a secure connection.
• Led by Finance. Because the Finance team is responsible for the overall planning process, finance professionals have the best understanding of what is required in terms of software flexibility and ease of use, both in modeling and in day-to-day activities.
• Finance managers and department managers should be able to spend less time managing data and more time managing the business.
• Customized views for users help increase adoption and process ownership. Formula capabilities enable modeling of all relevant business drivers.
• Plans contain fewer errors because broken links, stale data, improper rollups and missing components are eliminated.

The successful implementation of a planning solution requires the orchestration of technology, business processes and best practices. This selection guide outlines key principles to help a company align its business process and technology requirements during the process of selecting planning, budgeting and forecasting software. By matching a company’s planning process to established best practices, facilitated by the proper implementation of a planning solution, an organization can significantly improve its financial and operational performance. The ultimate results are improved visibility to performance gaps and alternative courses of action, more reliable forecasts, and shared commitment to achievable goals.