better align IT investment decisions with enterprise strategic goals. Weaknesses of the Bottom-Up Approach. Create budgets and forecasts using native spreadsheet capabilities. Budgeting and forecasting processes may be tolerable when the number of participants is small, but it quickly becomes unwieldy as that number grows. Both the Biography of Confucius processes often are used simultaneously, operating as checks upon each other.
These errors are often discovered only after the budget is approved, when its too late to do anything about them. Securely share plans with full comment streams and audit trails. Forecasts provide current data-points to inform action in the face of changing financial realities. . In some cases, forecasts at low levels of aggregation and high levels of specificity, when rolled up into higher levels of aggregation, tend to be much less accurate than forecasts produced from the start strictly at those more highly aggregated levels.
Follow these 7 principles and avoid the predictable pitfalls of budgeting and forecasting. Signing up for a budgeting process that isnt repeatable is an invitation to be overwhelmed with low-value data wrangling. The challenge is finding the time to do this. Neither satisfies the specific needs of IT budgeting and forecasting, while both expose you to the pain of a manually-intensive, spreadsheet-based process. Action is predicated on a foundation of accuracy. Todays best-of-breed financial planning platforms can help you support the enterprise with more timely, reliable business insights. Once the Theatrical Effectiveness of The White Devil again, the forecasts for broader classes of products or components, as well for broader aggregates of sales channels, geographic regions, customer types and customer categories, would be produced by rolling up the forecasts already made at much more specific levels. Go with a set of home-grown spreadsheets and drown in email governance shortfalls.