By far the most frequent complaint I have heard (and, at times, experienced) about the planning and budgeting process is that finance professionals don't understand the business, and what truly drives success. Unfortunately, there is a lot of truth in that assertion. The greatest budgeting tools available fail us, unless those using the tools understand the business. While our profession is admired for its attention to detail and accuracy in preparing the numbers, we too often fall short when it comes to transforming those numbers into meaningful action and results.

That's the theme of this post. In a second post on this theme, next week I'll be offering some business-planning tips.

Information technology, specialization, and outsourcing force us to "reinvent" our profession. It's now possible to hire specialized and professional bookkeepers, and even accountants, to do the day-to-day, detailed work that has been the hallmark of our profession. Our management teams now require us to interpret our numbers, communicate them in understandable terms, and devise a plan of action based on the results. Creating journal entries and preparing financial statements is quickly becoming a candidate for outsourcing, so we must demonstrate our value as advisors and coaches who can influence and drive operating decisions.

As Sandra reasoned in her column, many of our budgeting and planning processes are broken. Budgets take too long to produce, contain too much detail, and are rendered irrelevant as soon as an unpredictable event occurs.

I agree that the cumbersome nature of linked Excel sheets is a symptom of this problem. When I worked in Corporate America, I spent a great deal of time importing database figures into Excel, and creating 30 MB analysis models. (My actual record for a model was 113 MB, but that was for a project analysis!)