You know the saying, “mo’ money, mo’ problems.”
In business, financial rules are not so clearly defined. Keeping companies out of the red requires managers to consider various costs and investments and keep a close eye on returns. They also have to anticipate changing variables such as the economy or the weather. An umbrella tycoon, for example, is significantly less likely to profit during a drought.
Enter the budgeting and forecasting capabilities of corporate performance management software. These intuitive processes go beyond the basic organizational functions of an Excel spreadsheet and help companies make data-based decisions.
Although CPM products are more popular among large enterprise companies, they have plenty to offer mid-market and small business owners who struggle to stay above water in today’s fluctuating market. When independent forecasting efforts fail, management teams don’t have to be quick to liquidate. Instead, they should consider calling in budgeting and forecasting tools as reinforcements.
The Benefits of CPM Software
Spreadsheets are one-dimensional solutions that leave a lot of room for error. Budgeting and forecasting systems automate processes that could otherwise be compromised by human error. Many of these systems consider more than product cost and revenue, and take into account scenario analysis, annual data and product profitability. This intuitive information allows management teams to make more informed decisions.
Although a company’s financial information is vulnerable, private data, CPM software products function as multi-user systems. Permissions and restrictions can be set to limit capabilities of certain personnel. A perk of the software is making data accessible across positions and departments. This collaborative quality opens up the opportunity for organizations to create workflows.
A workflow is essentially the process data or content goes through from start to finish. Think of it as a relay race on the track. With CPM software, an organization’s financial workflow can be mapped out clearly so all components are given their due diligence. Workflow helps track tasks through to completion, ensuring that the baton, so to speak, is effectively passed on and eventually arrives at the finish.
The inability of spreadsheet data to offer valuable analytical insight is a contributing reason independent forecasting falls short. Budgeting and forecasting software is able to help users consider data from years past, visualize data with informative graphs and generate real-time reports that let companies know where they stand. Management teams can use this information to make informed decisions regarding new inventory or run a marketing campaign.
Smaller and mid-market businesses are often more reluctant than enterprises to implement new technologies into their business models. Perhaps it’s a preference to stick with the traditional, tried and true methods. Perhaps it’s a lack of information as to what’s out there or fear that changes in methods won’t cause significant changes in results. Corporate performance management products are challenging these notions by making budgeting and forecasting software navigable for even the most novice users. It’s up to business owners and management teams to leap before it’s too late.