Perfection Paralysis and Budgeting

“Perfection Paralysis” is defined as fear of moving on a particular issue unless absolute perfection is achieved. A similar sentiment is expressed in the phrase: “Perfection is the enemy of the good”. In other words, people will sacrifice positive achievement and movement because it was not perfect.

If you could get a threefold improvement in your current budget process, would you take it? If you could get a threefold improvement in your budget process, but there was one small thing that required a small workaround, would you take it? It turns out that, in many cases, the answer to the first question is “yes” and the answer to the second question is “no”. Organizations tend to get laser focused at the end of their evaluation process on one issue that is imperfect in a vendor’s solution – while losing sight of the rest of the potential improvements that can be achieved by the solution.

When looking at process improvement, it is important to not lose sight of the forest for the trees. Organizations need to make a T-chart of the positives and the potential negatives and make a more global decision about the proposed solution. When done in total, decisions become clearer.

In the beginning of the decision process, organizations may recognize a myriad list of challenges with the budgeting process, such as:

  • Budgeting has become “mission critical” in todays more complex world.
  • They are stuck in “Excel Hell” with formula errors, manual data collection, consolidation, manual data entry.
  • There is no approval workflow.
  • Reporting is a mess.
  • There is no way for individual budget managers to enter their budgets in different ways that may match their needs.
  • Spreading of annual numbers is painful, difficult and not intelligent.
  • Salary and headcount planning is cumbersome if not impossible.
  • Asset or equipment planning can’t be done effectively.
  • There is no pragmatic way to do “What-If” analysis.
  • There is no way to carve off expenses for proposed department-specific special initiatives that touch multiple accounts in the account structure.
  • There is limited capabilities for calculations, allocations, drivers and other things in the budget process.
  • There is no way to re-forecast the budget once the fiscal year begins.
  • There is no effective way for a bi-directional linkage to the ERP, payroll or HR or fixed asset system to facilitate the budgeting, forecasting and variance reporting processes.

Yet often, when a solution surfaces that deals with 95% to 99% of their main issues, the organization may become hyper-focused on the one thing that the system may not do, or may not do perfectly. This is called Perfection Paralysis. They will prefer to “do nothing” and live with all of the imperfections in their current capability, ignoring the multitude of improvements that can be made in the process because of one thing that can’t be done that may not even be “mission critical”).

So how do you avoid this?

  • Make a list of the problems that you want to solve, not a list of the features that you need.
  • Rank those problems in terms of importance to you.
  • Consider the impact on productivity of these problems – how many hours are currently spent on work-arounds? What is this costing your team and what could you be doing “instead” with that time?
  • All software products and solutions are imperfect. Make a T-Account of plusses and minuses and determine which list is greater and whether the list solves your problems identified above.
  • Determine the vendors product plan to see if potential concerns will be addressed over the life of the product.
  • Determine whether the vendor is focused on your industry – if so, it is likely that they will make product enhancements over time that will match the ongoing need of your industry and therefore you.
  • Talk to reference accounts from your industry to see if the general problems that they experienced match yours and if the vendor properly handled their issues.
  • Consider process changes that match the rest of the industry – just because you have always done something a certain way does not mean it is the “best practice” for your organization.
  • Find out how important you will be for the vendor – if you are one of thousands of customers, it is unlikely that you will be supported with the same care as if you are one of dozens, or hundreds, of customers.
  • Talk to other references that have recently made a similar purchase decision as you are now.

Don’t suffer from Perfection Paralysis. There is no such thing as a perfect solution. Continuing to hold out for such a solution gives the peers and competitors in your industry an advantage as your organization holds on to the instead of choosing to move towards a vastly improved, but imperfect future.

People often resist change and one of the excuses to process improvement is Perfection Paralysis. Be aware of it and do your best to move your organization forward. There is no such thing as a perfect product. And remember, “Perfection is the enemy of the good.”

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