It also makes budget planning a lengthy, error-prone chore, as finance managers and controllers laboriously piece together budget requests and other data submitted by department heads and operating unit managers. The painstakingly slow process of preparing a budget can no longer keep up with the needs of companies operating amid rapidly changing business conditions. And Wall Street is quick to punish the stock of any company with errant financial forecasts. Many companies are moving to strategic, or top-down, planning. The idea is that they'll be able to measure results more accurately.
Strategic planning means adopting new budgeting and forecasting processes and practices.
But for strategic planning to work, input is needed from a wider range of contributors than have traditionally been involved in budget planning. That means finance executives need to provide departmental managers with guidelines and other data for preparing budget requests. This is where the new generation of budget-planning software comes into play. Vendors are debuting new online budget-planning applications and adding Web features to old ones. Finance executives and department heads can easily access the same application, a major improvement over the current practice of e-mailing spreadsheets back and forth.