Strategy Misalignment

Spreadsheets have been wonderful personal productivity tools but are now an inefficient way of modelling a complex business. As a result the operational tactics and initiatives outlined in the business plan are not thoroughly funded in the budget.

Modelling complex sets of tactics in a spreadsheet based two dimensional (row and column) budgeting system is:

• difficult, cumbersome and time consuming where most of the resources are consumed in number crunching and validation rather than strategic planning.
• Consolidating these two dimensional views via spreadsheet links provides little transparency behind the numbers
• Prone to spreadsheet errors

The traditional budget is thus a limiting factor in most organisations because it:

• attempts to quantify the operational tactics in terms of financial measures
• treats the consumption of resources as a period cost during the budgeting process (however many of the operational initiatives require investment spanning more than one budgeting period) So the budget is often not strategically aligned.