Is your organization's budget system a collection of spreadsheets and documents? If it is, then you may have already realized how difficult it is to collect and compile the information you need in order to develop a good operating budget. Even the best macro commands, cell protection, and input dialogs will not allow you to manipulate data as effectively as a well-designed database application.

Spreadsheet users generally access the data that is stored in spreadsheet columns and rows by copying, sorting, or referencing the data by formulas. These methods make it very cumbersome to analyze large amounts of data. Users that store information in documents also suffer similar difficulties when trying to assemble their budgets.
 

The primary advantage that spreadsheets can offer budget administrators is that, for most PC users, the spreadsheet interface is familiar. Most PC users are comfortable inputting data into a spreadsheet or transferring a document as an attachment to an email. These strengths, however, cannot justify the amount of work that budget administrators must perform in order to process the input information.

Many organizations are beginning to realize that the spreadsheet systems they have developed cannot continue to support management's demands for more sophisticated decision analysis and reporting capability. If the organization's size is medium-to-large, the planning administrator will eventually have to consider a more formal approach. It is at this point that management usually decides whether to purchase a solution or dedicate the IT resources necessary to build a solution in-house.

Organizations that are looking for a high degree of customization and already have substantial in-house resources, may prefer to develop their own solution. Their Information Systems group may have accumulated in-depth knowledge of their processes and user needs that would be difficult for an outside vendor to transfer into specific system functions. Organizations that are considering this approach should review the impact that a custom solution is likely to have on their long term IT strategies.

By comparison, purchasing an off-the-shelf system from an outside vendor could be a more effective approach for organizations that do not have substantial in-house IT resources. These organizations may not be able to develop a system quickly enough in order for the system to be considered a real competitive advantage. An outside vendor may also have more experience and more capability than the organization's in-house personnel.

In either case, management should review the proposed system's core technologies carefully. The review should consider factors that will have an impact upon future IT decisions, such as:

• the technologies' alignment with the organization's existing systems
• the technologies' alignment with the organization's anticipated uses of technology
• the organization's reliance upon the vendors of inter-related technologies
• how the system will be supported

A thorough review and analysis can help maximize your organization's return on its IT investments.