Central Planning for Business

Central Planning for Business


“I’ve lost count of the number of companies I’ve seen where a central office, usually the accounts department, dictates to another group of employees what their budget should be – and then acts all surprised when reality at the end of the year doesn’t match their expectations,” says Kevin Phillips, MD of idu Software.

Budgets aren’t tailored to specific needs

Sales people are burdened with targets, with no consideration of their unique circumstances or input. Yet the people in the field in each region have the best “feel” for what may happen in their territory over the next year. This includes which of their big customers are losing market share, which competitors may enter the area, whether the year is going to be tough or prosperous.

Providing your team with a budget with a standard 10% increase slapped onto last year’s sales target is not only unfair, but also unrealistic.

Hard times inevitably mean tougher targets

During hard economic times, companies often turn to dictatorial strategies. They send out the spreadsheets asking each region or department to submit its budget. Then spend weeks wrestling all the returning information into shape, before sending it back again for changes.

They are likely to repeat the process several times before imposing a brute-force solution in the hopes of reaching the desired financial outcome.

Don’t cut management out of the loop

Disregarding the opinion of middle managers can be dangerous. If management feels they have no real ownership of the budget, they are less inclined to commit to meeting it.

Likewise, unreachable targets can be extremely demoralising to sales staff – and low morale equals low productivity. At the end of the day, the lack of credible information begets a vicious cycle.

A centralised, shared solution

There is an easy fix to this problem. One database, which everyone can see and contribute to, solves the challenge of collating multiple spreadsheets.

With a central database that’s accessible over the web:

  • you can control individual read and write privileges,
  • everyone can always see the big picture; and
  • that picture is always up to date.
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