The case for Excel:
Excel is great for storing, organising and manipulating smaller scale data sets, performing isolated tasks as well as ad hoc analysis. An expert user would also be able to design models and build spreadsheets that push these boundaries to achieve business goals.
What it ultimately comes down to though, is risk. There are potentially multiple versions of the truth, many different spreadsheets for different user contributions, copy and paste errors and formula errors that can have an accumulative effect on the accuracy and completeness of the budget.
The case for Solutions/Tools:
Flexibility. A tool is better for the ability to easily model different assumptions, compare the results dynamically, and perform rolling forecasts.
Workflows. Some tools allow you to introduce automated workflows across multiple contributors to the budget process, while maintaining the data in one location.
There is no definitive point in time or set of circumstances, but here is a list of questions that may be helpful to consider:
This is probably one of the most important aspects of any solution to be considered.
To get the most out of a budgeting and planning tool, the process of loading the data from external systems should be automated as much as possible to minimise any manual steps. Most systems will have a database that should be either directly accessible from other systems or provide the ability to extract data. The method of getting this data will largely depend on the vendor of choice, but as consultants, this is where we can help with that initial dialogue and analysis.
The question should be how efficiently this integration is managed, and whether the tool can streamline your existing portfolio of solutions and in some cases, replace several solutions entirely.
Keeping in mind that every project is different, this would be a good starting point to help manage estimates.
To build and implement an initial module, such as an expense budget, it might take up to 2 months (installation, analysis of needs, configure module, train users, monitor entry). This would apply regardless of what portion of tasks are performed by consultants. A large end to end budget, modelling and forecasting solution could take 6-9+ months.
There are two components to the cost of the project – software licensing and consulting.
Software can be on-premise (installed in your organisation’s local servers) or in the cloud.
As a starting point, on-premise software licensing costs alone would not be less than $20k and software companies usually charge approximately 20% of that as an ongoing annual maintenance or enhancement cost.
For a cloud solution, the annual cost is usually up to a third less than an on-premise solution, but that value is charged annually.
Consulting costs are also variable due to the level of involvement that the client wishes to undertake for the implementation.
Typically, a budget of $20k would be a minimum for a small project involving application, installation and training.
Additional services might include solution comparison and recommendations, process improvement and implementation, which are on a case-by-case basis.
That being said, the decision to go with a solution is often due to many factors. The successful implementation of a solution also requires that the users are committed to using the solution as a means to achieving the business goals.