For many businesses, the solution to managing complex operational data requirements and financial planning is clear: invest in a Business Intelligence (BI) or analytics package.
There is no denying the utility of these tools – business intelligence software can give you a dynamic and multi-level reporting function, as well as granular insight into various projects, functions, operational regions, and customer accounts in just a couple of clicks. However, while BI platforms are great for visualising data and performing intricate data analyses, they are not designed to deliver a complete budgeting and planning solution. Businesses who over rely on their business intelligence tools often discover significant gaps in reporting and forecasting functionality, especially if what they are really looking for is a financial planning and analysis function.
Why Business Intelligence Systems Aren’t Perfect For Budgeting
If you’re looking to query data, slice and dice information into customisable views, and drill down into the where and why of your business operations, then you can’t go wrong with business intelligence. These platforms allow you to explore historic trends, uncover opportunities and inefficiencies, and establish a firm base on which to make strategic decisions. However, most BI platforms do not have the capabilities to handle the collaborative, iterative, and dynamic nature of forecasting and budgeting.
There are several reasons for this, but the first is that most BI platforms are not designed with budgeting as a core purpose. It’s not what BI software is for. Budgeting is a predictive function, looking towards the future, and this is not what business intelligence does. BI seeks to derive valuable insights from past data and actions, and in software terms these two actions require a distinct set of tools and features.
At best, budgeting might be included as an afterthought in the developer’s mind, and so many BI systems lack the tools you need to support processes such as multi-scenario comparisons, department or regional level budget contributions, and version control. Many platforms also struggle with basic predictive or forward-looking tasks such as ‘what if’ analyses and scenario planning. Creating a financial model that delivers budgeting and accurate forecasts isn’t easily achieved with most BI software, because they lack true ‘business modelling capability’, which is why many businesses end up relying on spreadsheets to fill in the gaps. And finally, some BI platforms struggle to integrate data from multiple sources within the same dashboard, which can make it complex to generate the reports needed.
Budgeting Tools To The Rescue
These limitations are the main reasons why many organisations use a dedicated Financial Planning and Analysis (FP&A) application alongside their BI or analytics system – in order to bridge the gaps and deliver a truly comprehensive solution. With a user-friendly interface, an FP&A platform such as Corporate Planner gives your finance team a system for creating, updating, and managing budgets, sales forecasts, and scenarios. As a leading FP&A application, Corporate Planner enables you to create plans and scenarios based on business drivers and sophisticated formula logic, and thereby create a fully integrated financial picture of P&L, Balance Sheet and Cash Flow. What’s more, the reports and intuitive workflows allow the finance team to collaborate with other stakeholders in different departments on the same data, with automated consolidation, clear version histories, and guided input forms making collaboration and communication straightforward.
The Synergy Between Business Intelligence And FP&A
The shortfall in business intelligence software and the way that FP&A platforms are usually superior as budgeting tools doesn’t mean that you shouldn’t use or invest in a BI platform. On the contrary, rather than viewing BI and FP&A as separate silos, it works best to approach them as two sides of the same coin. Use your BI platform to deliver insights from existing data, and turn to your FP&A software to transform those insights into actionable plans and forecasts. Used together, the two software platforms give companies the ability to make better decisions and the means to execute them with precision and accuracy. While a business intelligence tool can help you, for example, identify inefficiencies and underperforming processes, your FP&A platform can help you reallocate resources accordingly, revise budgets, and simulate interventions to reduce waste and improve performance. Business Intelligence gives you the insights you need to make changes, while FP&A gives you the means to implement these changes within your organisation.
Find Out More
Account-Ability is one of the UK’s leading Corporate Planner specialists, helping businesses streamline their budgeting, forecasting, and financial planning functions. To find out more or to book a free demo, please click here to send us a message.
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