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A KeyOn research report
Planning and budgeting systems
The use, the do’s and the don’ts
The roadmap for effective financial planning

2. Planning and Budgeting Systems
The use, the do’s and the don’ts
The Roadmap for Effective Financial Planning
Martin Daudey, KeyOn Partner
Fabien Lennertz, KeyOn Consultant
September 2008
A KeyOn research report

3. Contents
Management Summary 3
1 Introduction 4
2 Planning and Budgeting Solutions 6
2.1 Planning and budgeting systems in use 6
2.2 Planning and budgeting systems support 7
2.3 Best-of-breed or unless solutions 8
3 Costs and Benefits of Planning and Budgeting Systems 10
4 The Challenge of Customization, Redesign and Integration 11
4.1 Extension and integration 11
4.2 Horizontal and vertical integration 12
5 Bridging the Gap by Avoiding Pitfalls 14
6 Ten Golden Rules 16
References 18
Abbreviations 19
Management Summary
Many organizations struggle with the
implementation of their planning and
budgeting systems. Even when the
implementation is completed, organizations
seem to have difficulties in using their
systems in an effective and efficient way.
This paper describes the characteristics and
the use of planning and budgeting systems
in large organizations. It is based on key
findings of research that was conducted
amongst the members of the Planning and
Budgeting Systems Network, and on the
broad experience of the KeyOn consultants. It
provides an answer to the following research
question:
Despite the increase in the use of dedicated
planning and budgeting software, like
Hyperion Planning, Cognos Planning and SAP
planning modules, spreadsheets still play an
important role in most organizations. It seems
unthinkable that spreadsheets will completely
vanish, at least within the next decades.
CPM vendors continue to offer planning and
budgeting solutions with a high degree of
Excel integration.
The support of planning and budgeting
systems can be provided by different parties:
IT department (internal), consultants
(external) and software vendor (external). A
lot of organizations are quite happy to use
a combination of different forms of system
support, but their own IT department must be
involved in one way or another.
The main sources of planning and budgeting
costs are project man-hours and time spent
on the planning process. Data integration is
another high cost factor in the total planning
and budgeting costs. The respondents are
strongly convinced that the benefits of
planning and budgeting tools outweigh
the costs: one number planning, one way
of working and clear insight in planning
activities.
Furthermore, the survey indicated the
companies involved are mainly focused on
customizing their planning and budgeting
system rather than redesigning their
business processes to fit the planning and
budgeting system into their organization.
The integration challenges of a planning
and budgeting system largely depend on
the extent of diversification. The use of an
appropriate parenting style can help tackling
the horizontal and vertical integration issues.
The survey pointed out that there is still
enough room for improvements regarding
the integration of planning and budgeting
systems within their organization.
Pitfalls when using planning and budgeting
systems mostly involve master data
management (MDM) issues. The four most
common pitfalls are: incorrect translation of
system model into data model, no centralized
master data, a lack of data integrity and
unclean data.
The ten golden rules – described in Chapter 6 –
can be summarized as follows: Assign an
experienced project leader who communicates
success. Create multidisciplinary project
teams. Build in sufficient flexibility in order to
handle unavoidable organizational changes.
The planning processes must be clear before
selecting, designing and implementing the
system incrementally. The new systems must
be compatible and integrated to your current
systems to increase consistency, speed and
communication. Both horizontal and vertical
integration will improve your overall business
performance. The quality of the process cycle
can be improved by early user involvement.
Recent research stresses that inefficient
systems should be perceived as an
opportunity to improve instead of a weakness
(Lemmens, Tullemans Rüling, 2006). In
many organizations planning and budgeting
systems do not provide the competitive edge
that is planned for. Planning and budgeting
is often regarded as time consuming and
often does not produce the added value as
expected. In addition, all the time spent
on planning and budgeting, is not spent on
Which recommendations can be given to improve the
implementation and the use of planning and budgeting
systems in large organizations?

4. directly running the business. Does this
mean that planning and budgeting should
not be prioritized? This paper will outline the
characteristics, benefits, costs and pitfalls
concerning planning and budgeting systems.
It will conclude with ten golden rules that
can help you improve the implementation
and optimal use of successful planning and
budgeting systems.
Objectives and research question
This research has been executed to accomplish
a number of objectives. The objectives of this
research can be formulated as follows:
• To give a broad overview of the use of
planning and budgeting systems – as a
result of the interview findings – within
leading organizations;
• To identify the factors that affect the
performance and profitability of planning
and budgeting systems;
• To formulate and substantiate
recommendations to make the implementation
and exploitation of planning and budgeting
systems in organizations more effective and
efficient.
The research question, which is deducted
from the objectives, is the following:
Scope of the research
The scope of the research consists of the
systems that support the financial planning
processes, the budget and financial forecasting.
This paper will identify how organizations use
and implement their planning and budgeting
systems. Furthermore, the focus is on their
integration with other systems, the factors
which affect the performance and profitability
of planning and budgeting systems, and the
ten golden rules.
1 Introduction
Research process
This research is based upon a survey that
was conducted amongst the members of the
Planning and Budgeting Systems Network,
which is facilitated by KeyOn Planning.
The members of the Planning Budgeting
Systems Network are large-sized, for-profit
organizations realizing a minimum of 200
million Euro in sales revenue annually. Most
organizations are active in the industrial,
food and high-tech sectors, but organizations
active in the services and building industry
have also been included in the survey. The
survey questions were based on scientific
research and the experience of the KeyOn
Planning consultants. The survey consisted
of several structured face-to-face interviews.
The complete overview of network members
can be found on the next page.
Structure of this paper
The structure of this research paper is as
follows. Chapters 2-5 contain the most
important interview findings. Chapter 2
discusses the use and support of planning
and budgeting systems, and the total
solution of which the planning and budgeting
system is a part. Accordingly, the costs and
benefits of planning and budgeting systems
are elaborated in Chapter 3. In Chapter 4
the challenge of customization, redesign,
integration and alignment is outlined:
organizations have to make decisions
regarding customizing the software or
redesigning business processes. Both
influence the integration and alignment of
the planning and budgeting system with the
other systems in use. Chapter 5 discusses the
pitfalls with which organizations have to cope
when implementing and using planning and
budgeting systems. Based on the experience
of the KeyOn Planning consultants and the
outcome of the survey, the paper presents
recommendations and guidelines – in the
form of ten golden rules – for the successful
implementation and use of your financial
planning and budgeting system in your
organization.
The complete Planning and Budgeting
Systems Network consists of the following
companies:
Which recommendations can be given to improve the
implementation and the use of planning and budgeting
systems in organizations?

5. In this chapter the planning and budgeting
solutions, which are used across different
organizations, will be outlined. System
support and optimization play an important
role in making improvements. Since the type
of system solution can affect the performance
of the planning and budgeting solution, we
will determine the type of system solution
(ERP, best-of-breed or in-between).
2.1 Planning and budgeting systems in use
As we all know Excel is an important tool
which is used throughout every single
company. In Figure 1 we can see that 95%
of the respondents mentioned Excel as a
tool being used for planning and budgeting
activities. One company uses Excel as the
main tool for planning and budgeting (and
is extremely satisfied with its current way
of planning and analyzing). However, most
companies use Excel to support their planning
and budgeting system. Cognos Planning is the
most frequently used best-of-breed software
for planning and budgeting activities. Among
the ERP vendors, SAP is the most popular
vendor of planning and budgeting solutions.
Especially the modules SAP BPS (Business
Planning Solution) and SAP BW (Business
Warehousing) are used in planning and
budgeting.
Research indicates that many company
spreadsheets contain errors, but most
spreadsheets often still hold important
financial data.
Why do companies still use Excel for their
planning and budgeting activities when
sophisticated planning and budgeting
solutions are out there?
“Spreadsheets, like Microsoft’s Excel, are
a great tool for manipulation and analysis
and at some point spreadsheets have grown,
often unnoticed, from simple analysis tools
into complex spreadsheets that are used as
a complete planning system” (Uiterlinden,
2008).
Excel offers more flexibility than most of
the planning and budgeting software from
large software suppliers. The functionality
offered by the latter is often so inflexible that
companies are unable to rely completely on an
advanced planning and budgeting system.
Figure 1: Planning budgeting systems in use
Although spreadsheets have significant
disadvantages regarding version control,
authorizations, decentralization, and built-in
checks, the benefits seem to outweigh the
shortcomings. Spreadsheets are known for
their flexibility, usability, what-if analysis and
presentation graphics. Moreover, spreadsheets
are often used in informal organizational
environments; spreadsheets can easily be
completed, validated, corrected and emailed
across business and IT users throughout the
entire organization.
However, the survey indicated that today’s
planning and budgeting systems are also
known for their increased flexibility and
their ease-of-use (see Figure 2). In addition
to these, planning and budgeting systems
have an edge on spreadsheets in terms of
version management and data integrity.
Whereas business users often create multiple
workbooks with their own version of reality,
planning and budgeting systems have one
version of reality which applies to the whole
organization.
Figure 2: Characteristics of planning and budgeting solutions
Integration with Excel is the characteristic
with the highest score, which highlights the
fact that most organizations only use planning
and budgeting solutions in combination with
a spreadsheet. Analyses, reports and charts
made with planning and budgeting systems
still do not satisfy business users. That clarifies
why the planning and budgeting systems are
strongly linked to Excel.
2.2 Planning and budgeting systems
support
Organizations prefer their planning and
budgeting systems to be supported by their own
IT department to their being supported from
outside the company’s environment: consultant
support and system vendor support (Figures
3, 4). However, Figure 3 shows that it is very
common that organizations are not reluctant
to use different forms of system support.
Consultant support and system vendor support
for planning systems are often indispensable,
since most companies do not have sufficient
knowledge and experience of system support.
This means that support from outside the
organization is encouraged as long as internal
IT people are involved in one way or another.
Figure 4: Single or multiple system support
(current status)
Most planning and budgeting systems
are being optimized continuously or on a
yearly basis (Figure 5). The frequency of
optimizations depends to a large extent
on the context or environment in which
an organization operates. Organizations in
dynamic environments are characterized by
goal diversity and flexibility. Goal diversity
increases the output categories for which
information needs to be collected and
processed by the organization, thereby
increasing both complexity and uncertainty
(Peterson, 2001). Organizations with a
dynamic and complex strategic context
generally need to optimize their systems at a
higher pace than organizations in stable and
non-complex environments.
2 Planning and Budgeting Solutions
1 SAP has decided to keep developing the product from OutlookSoft, which is now integrated with SAP Business
Planning and Consolidation (SAP-BPC).
Excel
Hyperion Planning
Hyperion Fin. Mt.
Cognos Planning
SAP BPS
SAP BW
Infor MPC
BO Planning
Outlooksoft
JDEdwards
0% 20% 40% 60% 80% 100%
Integration with Excel
Version control
Flexibility
Data integrity
User friendliness
Consolidations
Formulas
Analyses Reporting
Low error prone
Clear and useful charts
1 2 3 4 5
Internal support of IT people
Consultant support
IT people from system supplier
25%
39%
36%
Figure 3: Forms of planning and budget-
ing systems support (current status)
All forms of support
Internal support only
Internal consultant support
Consultant supplier support
47%
13%
33%
7%

6. Figure 5: Frequency of system optimization
2.3 Best-of-breed or unless solutions
Most companies have implemented an ERP
solution. Figure 6 shows that 65% of the
respondents use SAP as their enterprise-wide
solution. Keep in mind that some companies
use more than one ERP solution.
Figure 6: Current use of ERP systems
The next chart (see Figure 7) shows the
distribution of planning and budgeting
solution approach found in the survey, i.e.
whether it is a best-of-breed solution, part
of an enterprise-wide implementation (i.e.
a module as part of a total solution) or a
combination of both. The largest slice of
the pie is known as an in-between solution,
which means that companies prefer to use
a company-wide solution in combination
with a best-of-breed planning and budgeting
solution.
Figure 7: Approached of planning and budgeting solution
Second best is the total solution. Companies
that make use of an enterprise-wide solution
tend to complement their solution with
modules (e.g., a planning and budgeting
module) from their own software supplier.
Many companies use an unless strategy (e.g.,
SAP unless…, Oracle unless…) which means
that they use all the standard software that is
available from their main software supplier,
unless there is a solution from another vendor
that meets the company’s requirements in a
much better way.
A lot of research has been performed about
what kind of approach is preferable. In this
research we will not valuate the different
approaches.
Oracle
SAP
JDEdwards
Navision
Other
0% 10% 20% 30% 40% 50% 60% 70% 80%
best-of-breed
total solution
in-between
25%
37%
38%
yearly
quarterly
continuous
8%
46%
46%

7. 10 11
4 The Challenge of Customization,
Redesign and Integration
Where there is a gap between business
processes (or business goals) and planning
and budgeting systems, companies must
choose between either aligning the software
with the business process or redesigning the
business process itself. A lack of flexibility
in redesigning business processes often
results in the modification or extension of
business planning solutions, resulting in
either customization or integration challenges
(Aberdeen Group, 2007).
The survey indicates that organizations
mainly focus on customization of their
planning and budgeting system rather than
redesigning the business processes in order to
have the planning and budgeting system fit in
their organization (see Figure 10).
Figure 10: The extent of customizations and redesigns
(1 = not necessary, 5 = definitely necessary)
4.1 Extension and integration
Companies are having trouble integrating
different systems solutions. This cannot come
as a surprise due to the complex nature of IT
departments that are catering for the needs of
various business units, and the proliferation
of enterprise applications. Large companies
often have more than one ERP solution
and small companies running a single
ERP solution are likely to have additional
applications which ideally would be integrated
with ERP. Where an ERP solution does not
completely satisfy these needs, companies
choose to implement best-of-breed or an
enterprise-wide solution. Thus, instead of
customization issues, these companies create
a new challenge: integration.
Most of the companies that participated
in this research have plans for changing
or extending their planning and budgeting
systems in the near future. This also results
in new integration and interoperability
challenges. The complexity of integration
that comes along with the extension of the
planning and budgeting solution depends on
the answers to the following questions:
• Which approach to solution (best-of-breed or
unless) is currently used?
• How tightly must the functions and
processes be integrated?
• How much data must be shared or replicated?
• How much duplication exists between the
current planning and budgeting solution and
the extensions?
• If data must be shared and replicated by two
or more applications, which application is
the main source of the data?
• Do the architectures of your planning
and budgeting solution and possible
extensions easily support integration and
interoperability?
Let’s have a closer look at the integration
of the planning and budgeting systems of
our respondents. Generally speaking the
respondents are reasonably satisfied with
the integration and interoperability of their
planning and budgeting systems within the
business (rated 3 on a 5-point scale).
Each company’s information system should
support both proprietary and shared data.
Since it is needed to manage the company,
the proprietary data would be accessible
only to those employees who have legitimate
internal business needs. The shared data
should be available through appropriate
information interfaces to customers, logistics
suppliers, or any other party needing access,
through a contract or standard to which all
Customization
Business process redesigns
1 2 3 4 5
The origin of most of the planning and
budgeting costs consists of project man-hours
and time spent on the planning process. Data
integration is another important cost factor
when determining the total planning and
budgeting costs (Figure 8).
Figure 8: Cost perception
Hardware and software have a relatively
low cost perception which could mean that
companies are initially inclined to purchase
sophisticated planning and budgeting
solutions without taking into account that
other factors (e.g., maintenance fees and
license costs) play an important role in
making the planning and budgeting solution
profitable in the long run.
Planning and budgeting systems should give
benefits as well. The top benefit that almost
every respondent of the survey agrees upon
when using a planning and budgeting solution
is looking at the same number (See figure 9).
Information is often scattered throughout
the organization, especially when you are
using multiple spreadsheets with a lack of
centralization, it is inevitable that you are not
always looking at the same number. When
more than one system is used, the danger lies
in the different ways calculations are made.
Regarding decentralized systems it frequently
occurs that not every business unit applies
the same definitions and formulas. Different
systems can lead to different numbers. In this
case data is often not clean enough for analysis,
making it difficult to produce valid analyses
and optimize the decision-making processes.
Figure 9: Benefit perception
The more accurate your data is the more
precise your planning and budgeting figures
will be. You will actually be able to improve
the prognosis for the future.
The second most appreciated benefit is one
way of working. Most of the respondents
have indicated that the use of a planning
and budgeting system leads to a standard
way of working. Authorizations, rules,
restricted functionality and guidelines can
make planning and budgeting systems more
effective and can help to avoid problems. The
third benefit that companies acquire is that of
getting clear insight into planning activities.
Finally, the research indicates that 65% of the
respondents were strongly convinced that the
benefits of their current solutions outperform
the costs of planning and budgeting systems.
3 Costs and Benefits of Planning and
Budgeting Systems
Man hours (project)
People’s time
Data integration: Initial Set-up
Functional Application Support
Technical Application Support
Data integration: Keep Up-to-date
Software costs: Initial
Hardware
Software costs: Maintenance fee
1 2 3 4 5
Looking at the same number
One way of working
Clear insight in planning
Clarify Corporate goals
KPI Reporting
Lower business risk
Focus on Key Value Drivers (KVD)
1 2 3 4 5

8. 12 13
Looking at decision-making in terms of
planning and budgeting systems, most of
the companies involved in this research
focus on departmental (or business unit)
integration instead of centralized integration
(see Figure 12). Organizations are often
fractured by independent actions of the
business units. This can be clarified by the
fact that the organization has a number of
separate business units which have systems
that have been integrated specifically for the
benefit of their own business. On the other
hand, business units are aligned and working
towards the same business. Centralized
integration promotes systems that are
integrated throughout the entire organization,
which forms a coherent solution.
Figure 12: Centralized vs. decentralized system integration
Centralized integration
Departmental/BU integration
44%
38%
parties agree. By using advanced technology
that supports system integration between
companies and data sharing, one can increase
the resource utilization and thus reduce costs.
Figure 11 shows that most companies do not
have planning and budgeting systems that are
integrated with the systems of their clients
and suppliers.
Figure 11: Inter-organizational system integration
4.2 Horizontal and vertical integration
At operational level, sales plans, logistic plans
and production plans lead to insight and
alignment in short and mid-term activities.
This is called horizontal or functional plan
integration. This operational planning is
the basis for financial planning (budget or
forecast) on tactical level, which provides
input for validating the strategic plans for
the next year. The alignment described here
can be defined as vertical plan integration.
Planning activities can be found at every
single level. Who the responsible person or
echelon is, depends on the parenting style
of an organization (Geelen, Tullemans
Aertsen, 2006). The parenting style defines
the way of cooperation between the different
management levels and the way in which
the planning processes must be integrated,
either vertically or horizontally. The following
parenting styles can be distinguished:
• Strategic development;
• Strategic control;
• Financial control.
The choice of a specific style depends on the
extent of diversification. When there is no
or hardly any diversification, the strategic
development style can be applied. Corporate
headquarters are able to oversee the complete
operating field and have sufficient insight into
the activities of all the different divisions.
Whenever an organization is characterized
by a high level of diversification and major
internal differences regarding the divisional
activities, financial control or strategic control
should be chosen.
The parenting style also sets the
differentiation of decision-making. Conflicts
between business and IT managers are not
uncommon in IT decision-making. When all
the authority for decision-making rests at
a single point in the organization – and is
ultimately in the hands of one person or one
group -, the structure is centralized. When
decision-making is dispersed throughout the
organization, the structure is decentralized.
Lawrence and Lorsch (Lawrence Lorsch,
1969) were among the first to recognize the
simultaneous and complementary nature
of rationality and politicality in strategic
decision-making:
A hybrid model of decision-making is the
dominant form in many organizations; the
IT infrastructure is directed by corporate IT
management, and local business applications
are managed by business or IT management.
The differentiation of IT decision-making is
about the actual place of IT decision-making.
Lawrence and Lorsch (according to Peterson,
2001) define differentiation of IT decision-
making as:
“We view strategic decision-making as a social process in
which conflicting viewpoints and information about the market,
technological and economic issues are brought together and
discussed until a decision is reached.”
“The state of segmentation of the organizational system
into subsystems, each of which tends to develop particular
attributes in relation to the requirements posed by the relevant
environment. This includes both the formal division, as well
as, behavioural attributes of the members of organizational
subsystems.”
No
Yes
38%
62%

9. 14 15
4. Unclean data
The usefulness of data is often hampered
by the existence of entities that are no
longer used by the organization. Think of
phased-down products that still continue
to be present in most of the systems.
This also happens the other way around:
systems are not updated with the latest
data, definitions or formulas, although they
are already available. Unclean data can best
be tackled by the use of extract, transform
and load (ETL) and cleansing software. ETL
enables companies to import data from
multiple sources, reformat and cleanse
the information, and accordingly load the
information into another database, data
warehouse or other operational system. A
disadvantage of ETL is that your customer
records are only as accurate and current as
the last batch load.
According to Ian Ahern (Ahern, 2006) the
ETL process would be the solution when
business users maintain all the information
that the company needs in an enterprise-
wide software system. It would be sufficient
to move the data around and run cleansing
processes to ensure that all the data is
clean and consistent. In the real world, the
data that is needed for CPM may not solely
reside in the company’s operational systems.
A lot of it is in the heads of the business
users, in spreadsheets, and in departmental
(decentralized) business solutions.
It is remarkable that three of the top four
pitfalls involve master data management
(MDM) related issues. MDM allows data from
various sources to be analyzed as if it existed
in a single system. MDM makes sure that
master data is validated, matched, corrected,
enhanced, and cleaned in accordance with
standard corporate policies. The voting round
of the first Planning and Budgeting Systems
network emphasized the importance of MDM
and the corresponding issues.
Planning and budgeting systems serve
business organizations by providing
information for decision-making. In order to
progress from unstructured data to useful
information, companies need to bridge the
gaps in between. One way to ‘bridge’ the gap
is by avoiding it.
Along with the benefits of using planning
and budgeting systems there are pitfalls with
which companies have to cope. The survey
asked the respondents about their most
important pitfalls. Here is the top 4 of the
most common pitfalls to avoid:
1. Incorrect translation of the business model
into the system solution and data model
A common problem is the translation of the
business model into the data model.
Figure 13: The V-model
This problem can best be explained with
Figure 13. The V-model (V for verification and
validation) is a systems development model
designed to facilitate the understanding of
the complexity associated with developing
systems. The development process progresses
from the top left of the V towards the right,
ending at the top right. On the left, moving
down along the V-shape, the business analyst
defines business requirements, application
design parameters and design processes. At
the base point of the V the code is written.
On the right, testing and debugging is done.
Unit testing is carried out first, followed by
bottom-up integration testing. The extreme
top right of the V represents product release
and ongoing support.
You can imagine that incorrect or incomplete
business requirements affect the rest of
the flow. The sooner inaccuracies and
misunderstandings are cleared away the more
time and effort will be saved when the new
solution is finally released. One of the barriers
which undermine a correct translation is
the fact that that the actual translation
remains in the hands of the IT department,
which implies that the business is regularly
underrepresented. The misalignment between
business and IT recurs in every single
organization. After all, which business has
not side-stepped the IT department in order
to set up its own spreadsheets to manage and
report on the real business (not the one the IT
department seem to imagine is out there)?
2. No centralized master data
Data from many resources is consolidated
into central databases called data warehouses,
data hubs, or data marts. These repositories
feed enterprise applications in contact center
management, sales and marketing, customer
support, business intelligence, corporate
performance management, governance risk
compliance, and other key areas (Kobielus,
2007). However, that ideal has rarely worked
out in reality. In most organizations master
data is distributed among various applications
and databases.
3. Lack of data integrity
Despite the advanced functionality
of planning and budgeting systems,
organizations often continue to have data
integrity problems, mainly because of
overlapping systems and various data marts.
As we saw in Chapter 3 we are not always
talking about the same number. The origin of
the problem is encapsulated in the existence
of different numbers that refer to the same
situation but with different data definitions.
The data integrity problem is exacerbated
when data is managed across different
software vendors. Also think of the use of an
ERP solution where it is - in general - easier to
acquire a higher level of integrity of data than
when best-of-breed solutions are used.
5 Bridging the Gap by Avoiding Pitfalls
Code
Requirements
Logical Design
Project activity flow
Physical Design
Program Spec
Acceptance Test
System Test
Integration Test
Unit Test
Testing design baseline

10. 16 17
6 Integrate planning systems
horizontally and vertically
Make sure there is sufficient integration between
the new system and the existing IT system
and planning processes. As we explained in
Section 4.2 there are 2 forms of integration.
Horizontal integration
Within any organization there should be
one joint plan or at least different aligned
business and IT plans. With this horizontal
or functional integration the processes of
different departments can be synchronized.
Regarding horizontal plan integration,
decisions are made which are in line with the
company’s overall direction.
Vertical integration
In the strategic planning process targets are
usually set. These targets are communicated
top-down to lower levels of the organization.
In the opposite way a so-called bottom-up
budget is prepared. Combining top-down and
bottom-up plans will lead to a final budget.
The parenting style and organizational culture
determine whether the top-down or bottom-
up approach is dominant in the vertical plan
integration.
7 Integrate your planning system with
existing IT
Data integration is a key aspect for the success
of implementation and use of a planning and
budgeting system. In many organizations
complex situations appeared due to the
numerous inter-connected systems. This is
often the result of organizations over-focusing
on the decentralization of decision-making. It
is still better to have the systems connected
than to leave them operating separately.
The new system must be compatible and
connected with the older systems on which it
is based, in order to enable data integration.
Data integration makes sure that various
functions are consolidated into a unified hub
that sits between – and works in conjunction
with – a company’s current data quality
systems and enterprise applications, querying
and pulling data from enterprise systems.
No data integration simply means a lack
of performance. An audit of the present
system and infrastructure can initiate the
improvement of planning system integration.
8 Involve process support
organization in an early stage
Many planning and budgeting systems
are suitable for internal process support
and maintenance. Planning processes are
subject to change, which results in regular
optimizations and maintenance of planning
and budgeting systems. The sooner the
process support organization is involved
in the implementation phase, the sooner it
acquires skills and insight that enable it to
support the planning and budgeting systems.
9 Communicate success
Start communicating success even in the early
stages of projects. Michael Hammer (Hammer,
2001) defines in The Agenda the 20-60-20 rule.
This rule is based on 20% of the employees who
encourage the upcoming changes, 60% who
have no opinion, and 20% who are reluctant.
There are numerous reasons why people
discourage the introduction of a new system.
Resistance against the adoption of a planning
and budgeting system can be diminished when
success is communicated step by step to all the
interested parties. This can easily be combined
with the step-by-step implementation which
has been presented previously. Successes
will encourage the project members and will
increase the chance of succeeding.
10Select a planning and budgeting
solution that suits your business
Selecting a planning and budgeting solution
is growing in importance. Its success relies
on correctly assessing the quality of the
selected components. Buying a new planning
and budgeting package or upgrading one is an
expensive proposition under any circumstance.
The real cost of buying such a package includes
the annual maintenance fees, the training
time, and the hassles of getting support; it
is therefore much more than just the initial
purchase price. Selecting the wrong planning
and budgeting solution presents more than
cost issues. It can negatively affect morale
– resulting in resistance (golden rule 9) – and
productivity, contributing to poor client
service, poor planning results, low forecast
accuracy, and lost business.
6 Ten Golden Rules
In this chapter the ten golden rules for
successful implementation and use of planning
and budgeting systems are outlined. Some
are general guidelines for successful system
implementation, others are specific rules that
will guarantee quality, speed and efficiency for
financial planning and budgeting systems.
1 Create multidisciplinary teams
To avoid misunderstandings and wrong
interpretations between business and IT
departments, we would strongly recommend
setting up multidisciplinary project teams in
order to increase functional integration. These
teams often consist of a restricted number
of participants. Some of these, preferably
the project members, fulfill different roles
and have knowledge of and experience in
different fields, i.e. finance, marketing, sales,
supply chain, manufacturing, research and
development, and IT. Physical co-location
stimulates interaction and coordinated
actions, and affects the ability to achieve
integration (Peterson, 2001). The mechanism
enables you to link your knowledge with other
employees that work throughout the entire
organization. Furthermore it will increase the
shared understanding within and between
different departments.
2 Assign an experienced project leader
Assign a strong and experienced project
leader. Many planning projects fail due to an
inexperienced project manager. The project
manager should have sufficient knowledge
about the complexity of the problem and
the related projects. The project leader must
be the person responsible for a clear project
plan which is agreed upon by all the parties
involved. A solid project and action plan
consists of clear deliverables, sub-projects,
the responsible person(s) and time scheme.
A clear plan will prevent endless discussions
during and after the project about what
should be finished within which timescale.
3 Use an incremental approach
Implement your planning and budgeting
system incrementally. Pitfall 1 in chapter 5
indicated the importance of a step-by-step
approach. Implement the planning system
step by step towards the end goal. It will
ensure that your system can be deployed
quickly; allowing users to gain acceptance
gradually as more functionality is added.
4 Build flexibility into your system
solution
Even if the business requirements are
completely clear when starting to build in the
systems solution, it is strongly advisable to
build sufficient system flexibility. Changes
in business requirements arise rather
frequently and must therefore be expected.
Due to acquisitions, divestments, changes in
regulations and changes in strategic focus,
the structure of the company will change.
These changes will have an influence on the
planning processes and consequently on the
system. Your company and also the planning
system must have the ability to quickly
implement these changes.
5 System follows process
Do not start with the implementation
of the system until your processes are
sufficiently clear. Too often improvements in
planning processes – in the form of system
implementation projects – commence from
a system perspective with the intention
to induce organizational changes as well.
First design and align your processes and
afterwards choose and implement the
appropriate system.

11. 18 19
Abbreviations
CPM Corporate Performance Management
ERP Enterprise Resource Planning
ETL Extract, Transform, Load
MDM Master Data Management
RFI Request For Information
SMART Specific, Measurable, Achievable, Realistic, Timely
• (Aberdeen Group, 2007)
Aberdeen Group (2007). Better Data Breeds Better Business Intelligence in Retail. p. 1-6.
• (Aberdeen Group*, 2007)
Aberdeen Group (2007). What Comes First, the Chicken or the Egg? ERP Customers Respond to
Customization and Integration Issues. p. 1-5.
• (Ahern, 2006)
I. Ahern (2006). High-Octane MDM: How Enterprise Dimension Management Boosts BPM’s
Performance). Business Performance Management Magazine, Vol. 4 no. 1; p. 32-35.
• (Geelen, Tullemans Aertsen, 2006)
P. Geelen; P. Tullemans; F. Aertsen (2006). Door planning in control. (Dutch)
• (Hammer, 2001)
M. Hammer (2001). The Agenda: What Every Business Must Do to Dominate the Decade. p. 1-288.
• (Henderson Venkatraman, 1993)
J.C. Henderson; N. Venkatraman (1993). Strategic Alignment: Leveraging Information Technology
for Transforming Organizations. IBM Systems Journal, Vol. 32 no. 1; p. 472-484.
• (Kobielus, 2007)
J. Kobielus (2007). Mastering Customer Records: How Services-Oriented Architecture Will Shape
the Future of CRM. Customer Relationship Management, no. 12; p. 48.
• (Lawrence Lorsch, 1967)
P.R. Lawrence; J.W. Lorsch (1967). Differentiation and Integration in Complex Organizations.
Administrative Science Quarterly, Vol. 12 no.1; p. 1-47.
• (Lawrence Lorsch, 1969)
P.R. Lawrence; J.W. Lorsch (1969). Organization and Environment: Managing Differentiation and
Integration. Boston, Harvard University Press.
• (Lemmens, Tullemans Rüling, 2006)
L. Lemmens; P. Tullemans; S. Rüling). Budgeting – A burden of the past or tomorrow’s value
creator? White paper.
• (Peterson, 2001)
R. Peterson (2001). Information Governance: An Empirical Investigation of the Differentiation and
Integration of Decision Making for Information Technology in Financial Services.
• (Uiterlinden, 2008)
R. Uiterlinden (2008) (Dutch). Spreadsheets: Vloek of Zegen? Controllers Magazine, June/July 2008; p. 17.
References

12. 20 21
For more information about planning and
control systems and how we can help you to
make the appropriate system work within your
organization, please contact KeyOn Planning.
Ing. Martin Daudey Drs. Fabien Lennertz
Partner Consultant
++ 31 (0)6 51 143 088 ++ 31 (0)6 51 884 701
martin.daudey@keyonplanning.nl
fabien.lennertz@keyonplanning.nl
Contact
The Planning and Budgeting Systems
(PBS) knowledge network offers finance
and IT professionals a learning network on
contemporary trends and best practices in
planning, budgeting and control systems.
The network enables the members to share
experiences and learn from each other via
research and benchmark studies in which
members’ needs are closely reflected. KeyOn
Planning initiated the network in April 2008.
There is a possibility to meet each other in
person during biannual Round Table sessions.
About KeyOn Planning
Budgeting Systems Network
PBS is targeted at large-sized companies.
The participating companies include: ASML,
Bavaria, Campina, CFS, Colbond, Heineken,
Heinz, Janssen de Jong, KPN, Mars, NXP, Ohra,
Perfetti, Philips Consumer Lifestyle, Philips
Medical Systems, Rockwool, Purac, Royal
Cosun, Scheuten, Siza Dorp Groep, Stork, Tejin
Aramid, TomTom, VION Ingredients, and
Vodafone.
For more information:
http://www.keyonplanning.nl
KeyOn Planning implements forecasting,
planning, budgeting and control systems.
Our specialized consultants have in-depth
knowledge of planning and control processes.
On the basis of many years of practical
experience in a variety of companies we know
how to make planning systems work for your
organization.
About KeyOn