7 reasons IT financial planning stinksAnd what it’s going to take to make the process less painful

If aligning IT’s priorities with the business’ priorities matters, then IT finance matters.

But before anyone can tie IT’s operational plan to IT’s financial plan, someone’s got to build that financial plan.

If you’re involved with the IT budgeting and forecasting process, you know it can feel like herding a thousand kittens.

ON ICE.

Because for seven stressful reasons, IT financial planning makes the people who own the process want to pull their hair out and scream.

Reason #1

"The plan of record doesn’t live in a

system of record."

This is the

BIG ONE.

Most IT finance teams have to rely on an unruly mix of spreadsheets and emails to build their plans.(The first problem is that none of these tools were built to be a system of record.)

So even before the budget window opens, you and your team are already drowning in an ocean of spreadsheets that need to be distributed, collected and stitched together.

Forcing your team of highly qualified professionals to spend far too much time gathering data and fixing broken spreadsheets – and far too little time doing what they were hired to do.

Reason #2

"Documentation is scattered…and scarce."

When, or let’s be honest, if budget owners capture their budget decisions, it’s usually done by email or embedded in spreadsheets.

So it’s incredibly easy for vital insights and inputs from IT managers and budget owners to get lost.

Which leaves you managing a process with a built in lack of transparency, wondering whether or not the plan actually aligns with initial priorities.

Reason #3

"Versions. Versions everywhere."

Reviews and iterations are an essential part of a flexible budget process.

But when your team devotes the bulk of its time and brainpower to managing multiple versions of spreadsheets from multiple cost centers, something’s not right.

Of course, the alternative is someone working on the wrong version of the plan. Or worse, the wrong version of the plan gets submitted and approved.

Spiraling out of version control:We actually know of one horrifying case where an executive presented the wrong version of the budget to his steering committee.The result? The committee approved a budget that was $1 million short – And since the committee wouldn’t reconvene for another six months, the executive was forced to start a brutal round of last minute haircuts.

Reason #4

"The laborious task of standardizing labor units."

The dreams and strategic potential of IT finance come to a grinding halt when someone on the team has to spend hours tracking and reconciling labor resources.

The trouble is, without pre-defined labor units planning becomes an inefficient and tedious exercise.

Which means this painfully menial chore gets assigned to someone with far more important things to do.

Reason #5

"The ball and chain of run spend."

If just consolidating your plan is a mammoth task, everyone has to settle for inadequately small windows of visibility into the plan as a whole.

Which means you’re probably going to get blindsided by a run cost someone forgot.

Worse, it leaves you with way too little time to make adjustments when surprise costs hit.

"SURPRISE!"

Another horror story: After weeks of consolidating, reviewing and adjusting their plan of record, the IT finance team of a global food manufacturer got hit by a $50,000 cost that had fallen through the cracks.You can bet someone robbed Peter to pay Paul when that happened.

Reason #6

"Siloed fiscal management from different budget owners."

It’s hard enforcing accountability when you’re struggling to manage so many cost centers and plans.But when business owners aren’t clear about planned spend and actuals, bad things happen.

Teams pad their budgets far more than they should, inevitably sapping resources from projects that desperately need more money.

It’s this lack of visibility that usually leads to blind across-the-board adjustments – an even bigger mess for you and your team to have to clean up.

Reason #7

"The need to forecast at the speed of light."

The pain of budgeting is only amplified when it comes to building and managing forecasts. Because not only do you have to herd the same set of feral kittens – you also have to do it in a lot less time.

When you barely have any time to translate actuals into a forecast, the high value task of defining where IT should be going becomes terribly rushed.

And all those dreams of setting up a rolling forecast remain as far out of your reach as they’ve always been.

SO.

Here’s what we know.The IT finance budgeting and forecasting process is at least seven kinds of painful.

But it’s also a fundamental necessity for IT to align with changing business priorities. Without the sweat and blood of IT finance, IT’s operational plan will never align with its financial plan.

So it is both urgent and vital that the financial planning process become more about the plan and less about the process. And that IT finance professionals have the tools they need to do their jobs.

For this to happen, it is essential that the plan of record live in a system of record.

So that it lives in a central system where analysts, budget process owners and business owners can collaborate.

So that every stakeholder is accountable for the adjustments and spend they drive.

So that budget owners and IT leaders always have the information they need to have more strategic conversations.

So that IT financial planning can stink a little less.

We’re Apptio and we’ve purpose-built a financial planning tool that makes IT budgeting and forecasting a lot less painful and a whole lot more efficient and predictable.

Because we believe it’s high time IT finance got its own planning tool.Download our Executive Brief to learn six best practices to enhance your IT planning process.Or better yet, let’s talk.

http://www.apptio.com/