As we all know: not everyone is alike. There are many different personality types in the world. And there are also many different personality types in the budget process…not all of which are good for your budget process. We have identified six different types of budget user personas that can destroy your process and have suggestions for how to deal with them.
The vast majority of these types of people surface when organizations try to use Microsoft Excel or similar solutions for budgeting. When stuck in an excel or a limiting row and column format, it is impossible for department heads to think flexibly and deeply about their budget. When they can’t do this, it leads to a lack of ownership and accountability. Ownership and participation are required in order to budget to strategy and the best thinking comes from the department heads who are the experts in their area.
Naysayer – The Naysayer is the person who just does not believe in or like the budget process. This is the person who complains that the system is too hard to use, does not allow them to budget the way they think about their department and generally complains about the process, the complexity, the lack of flexibility and anything else that bothers them. Their inability to complete a budget is never their fault. It is always the fault of the system and/or process.
Procrastinator – This is the person who waits until the last minute at each iteration of the budget (if they submit at all) and generally slows up the process because you have to constantly wait for their submission. This delays the consolidation, reporting and the entire approval process as you are tracking down their spreadsheets and checking to see if they actually did what you needed them to do to complete the budget. They typically complain that they didn’t know when the budget was due, they didn’t have the time to fill in the spreadsheets, the system didn’t allow them the flexibility to budget the way they wanted to – and so on.
Tinkerer – The Tinkerer is the opposite of the Procrastinator. This is the person who submits version after version after version and causes (guess what?) version control issues as you try to determine which is their final, final version of the budget. They also slow down the whole process as you wait for their final changes. They complain that they can’t easily find the historic details to inform their current budget and so need to double and triple check that they have everything.
Skeptic – This is the person who just does not like anything about the budget process. They don’t like Excel. They don’t trust Excel. They complain about the potential for errors. They think the process takes too long. They complain about the lack of documentation and ability to analyze. These are the people that state emphatically, “That’s not my number,” when they see the final budget version. The critic can be especially difficult if they happen to be in a senior management position. They can easily undermine the process by bringing up problem after problem.
Mechanic – This is the person who constantly tries to alter your budget templates by adding rows, destroying formulas, adding their own calculations, and generally wreaking havoc on what you designed to be a stable and consistent budget format. This is the person most likely to create an error in the final budget that you only discover after the budget was submitted (maybe).
Rebel – The Rebel is the person who constantly has specialized requirements and wants to do things that are unique to their department. It is impossible to create a standardized budget template that works for everyone. This user needs maximum flexibility within the confines of financial controls.
These are not the only personas in the budget process, but they can be the most disruptive. Here are some features and functionality to look for in a budgeting solution that will allow these personas to be engaged in the budgeting process which will result in a faster, more efficient, and accurate budget process.
- Step-by-step guided approach for the budget process that intuitively walks the user through the required steps. This will satisfy most of the types above and eliminate complaints about lack of flexibility and lack of ease of use.
- Flexible budgeting methods. Situational budgeting provides maximum flexibility to end-users. This is particularly effective when combined with the guided approach interface. This lets users enter budget numbers and assumptions and calculations in a way that matches their individual needs.
- Detailed functionality for salary planning. A main area that can impact the budget process are the issues of handling personnel planning – reviewing current salaries for accuracy, handling both salaried and hourly workers, planning for salary increases sometimes by employee class, budgeting new hires, handling bonuses and other incentive compensation, calculating various benefits sometimes by individual, and handling tax calculations. Staff needs to be budgeted by department and allocated across departments (properly allocated all their costs) when needed.
- Special initiative budgeting. The ability to budget for projects, department initiatives, or strategic initiatives allows finance to see how the organization is budgeting to strategy and allows departments to request additional funding for projects outside of the regular budget.
- Built-in workflow, audit trails and approval processes. This assists the version control and quality of budget issues and will dramatically cut down time wasted on questions about the numbers.
- Self-service reporting. Having a set of useful and predefined reports that support the budget preparation, approval, and on-going variance analysis can dramatically improve the overall process, reduce the budget cycle and help tie the budget to the strategy of the organization.
- Notes, justification and file attachments on any number in the system. This will cut down the interactions from finance seeking clarification on budget increase or decreases by chasing people to provide commentary and details. When assumptions are documentation, it provides a historic record trail for new budget managers taking over someone else budget.
- Structured “what if?” Rather than having a general equation-oriented modeling environment, having prepackaged and useful what if capabilities can reduce the stress at the end of the budget process when departments are trying to make important decisions about how to meet corporate expense objectives.
- Scenario Modeling. Ability to change your assumptions – such as calculations, drivers, employees, etc. and then run comparison reports on these scenarios down to the detailed account and department level can provide useful information and when and which levers need to be adjusted throughout the year to keep the budget on track.
- Forecasting. Having the ability to easily marry actual results in the new fiscal year with the budget, and then providing easy budget adjustments on top of that, can keep the budget fresh and the planning process more meaningful.
- Choose ease-of-use. Ease of use is the key to high user adoption. If it’s too complicated to learn or the finance team can’t self-service the maintenance of their own system, it really doesn’t work. If one is not well versed in software purchases, it’s easy to get caught up in features lists. And it’s easy for finance teams to gravitate toward the familiarity of Excel-like products because that is what they are used to. But familiarity is not the same as ease of use. And if the budget manger can’t use it, the final solution won’t work for anyone.
- Don’t over-engineer. The most important criteria is to make sure that you don’t over-solve your problem and get locked into a system that requires lots of support and money. If you seek an outside solution (recommended) make sure that all costs are identified early. Some software vendors can lure you in with functionality and then spring the cost on you after you have made the emotional commitment. Be careful of that. Also, make sure that you completely understand the support requirements of an outside system.
So, in summary, it is not easy to deal with the personas that are determined on destroying this mission-critical process. And you will never satisfy everyone. Nothing is perfect. Implementing a better budget process in your organization can dramatically reduce the impact of the six personas and improve the overall financial performance of your organization.