VideoNo one will deny that the latest generation of budgeting and planning (B&P) software is capable of doing great things. These Web-enabled systems are designed to help companies radically speed up the planning process, even as they allow many more people to participate. They import data points with ease, whether from within an organization or without. They keep managers apprised of who has filed a budget and who has not, and how closely various departments are sticking to plan.
But there's one thing that even the newest B&P systems can't do: make employees use them.
In fact, the last thing many workers want is more involvement in the budgeting and planning process — too often a four-to-eight-month exercise in disillusionment, marked by back-and-forth reviews, back-room negotiations, "land-grabs," and gaming to manipulate forecasts. "People hate budgeting because they think, 'There's nothing in it for me,' " says Lawrence Serven, a principal in Buttonwood Group LLP, a Stamford, Connecticut-based management consulting firm specializing in developing planning solutions. "Or there's a sense of futility, that management is going to slash the numbers anyway. Or they don't even hear back from management on what was approved and what wasn't."
Couple this aversion to the process with the ubiquitous resistance to change, and B&P software implementations become an enormous challenge for all but the most enlightened organizations. Indeed, half of the companies surveyed by CFO magazine said that half their purchased seats go unused or underused — a sizable proportion, even considering that companies may buy bigger-than-needed licenses to accommodate user growth.
"Technology will support a culture change," concedes Chris Leone, vice president of product marketing for applications at B&P bellwether Hyperion Solutions Corp., in Sunnyvale, California, "but it can't create a change."
Pockets of Resistance
Resistance to change is by far the biggest impediment to widespread adoption of B&P software. Most companies rely on some combination of Excel, E-mail, and paper for budgeting, and many users aren't eager to have their comfort levels challenged.
At BankAtlantic FSB in Fort Lauderdale, Timothy Cooke wasn't surprised to encounter some resistance to the installation last year of an SRC Software B&P system. The bank's staff includes some 30-year veterans, says Cooke, manager of financial systems. "We're not talking about technically sophisticated people. They know their jobs well, but they don't want to mess with new software packages or learn any new software," he says.
When the San Diego Unified Port District implemented Comshare B&P software in January 2000, budget administrator Robert Graves says he encountered pockets of resistance among senior management who were used to completing their five-month-long review of the budget entirely on paper. "No one likes change unless they can see a tremendous benefit for themselves, and a few people just didn't want to change," says Graves. "They didn't want to do things online. They like paper."
Sometimes the resistance is more than cultural. At Silicon Graphics Inc., in Mountain View, California, the rollout of Oracle's Financial Analyzer and Closedloop Solutions's TopLine Manager was straightforward in the United States and the Asia-Pacific region, according to Jeff Osorio, vice president of finance operations. But the European rollout was far more difficult. "I think it was a 'not invented here' sort of cultural thing," says Osorio. "And part of it was that [Europe] previously felt autonomous from the U.S. division, and we had had no visibility into their operations. Now we can see everything that's going on, and they don't like that too much." As a result, some European staffers aren't refusing to use the software, he says, "they're just claiming that it doesn't work."
While such resistance might sound like a minor obstacle to a successful implementation, in many cases it can have a powerful negative impact on the cost/benefit of the software. B&P software and implementations aren't cheap — $1,600 per seat, says AMR Research — and if 25 percent of the purchased seats are unused or underused, that's money down the drain. What's more, a large part of the financial rationale for B&P software is its timesaving potential, but the budgeting and planning process, which depends on input from many people, is only as fast as its slowest link — no matter how automated.
"Most of our process didn't speed up" after B&P software was implemented, says Graves. "Most of what we do [for budgeting and planning] is still the human side — the reviews of requests, arguing about it. But now, once we get the figures, we can turn [the budget] around quickly." The Unified Port District has been able to shave about a month off its budget cycle with the Comshare system, and Graves expects to cut even more as the district starts using more of the system's functions.
Aiming to Please
Getting employees to embrace a new B&P system can put more strain on an already-stressful process, which usually takes 12 months or less, according to CFO's survey. Experts say the best way to overcome user objections is to prevent them in the first place. How? By surveying all potential user groups and incorporating their informational, technical, and operational requirements in the software selection process.
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