The ROI of Better Budgeting
Updated: March 28, 2006
Unfortunately, budgeting can be a painful annual process involving many linked spreadsheets that stagger through multiple iterations before a final budget is approved. However, it doesn't have to be that way. By automating your budgeting and planning solution, you can meet urgent business needs and do so in a way that delivers significant returns.
To measure the bottom-line of budget automation Microsoft and FutureSight Consulting recently completed a comprehensive analysis of the economic benefits of using Microsoft Forecaster.
Savings from better budgeting show up in three primary areas: labor, communications, and decision-making:
| • | Labor savings. Reduced labor in time spent managing and participating in the budget process, as well as providing IT support for the process, is typically the largest benefit. Airline Reporting Corporation, for instance, moved from 50 linked spreadsheets jointly compiled by 30 participants to an automated budget process with Microsoft Forecaster and saved five to six weeks in labor costs—the equivalent of about $15,000 (US)—per each major budget review. |
| • | Communications. An area of cost typically not considered in the budgeting process is communication. This takes the form of printouts, copies, long-distance phone calls, and in some cases, travel. Mercy Health Partners of Ohio, United States, who used to prepare 200- to 300-page budget reports for each cycle for 200 sub-departments, has virtually eliminated paper reports with Microsoft Forecaster. |
| • | Decision-making. Improved decisions can be achieved through better access to relevant and current information. "[Microsoft] Forecaster helps us to get a handle on hidden costs," says Todd Richardson, Mercy Health Partners budget and reimbursement manger. "With a couple of clicks of the mouse, we can instantly see current spending and drill down to understand our real financial condition." |
Aside from quantified benefits, Microsoft Forecaster contributes to intangible benefits like faster decision-making, improved accountability, and increased business agility. Overall, Mercy Health Partners used Microsoft Forecaster to identify $1 million (US) of potential savings in operational expenses.
