In today's world of high-tech communications, companies are enabling employees and managers across functional boundaries to share information more effectively than ever before. This trend toward broader collaboration is especially noteworthy in the area of budgeting, where organizations are taking advantage of Web-based business performance management (BPM) software to establish increasingly participatory processes. According to a recent Ventana Research study, 61 percent of companies are moving toward a collaborative budgeting and planning environment.

Technology isn't the real driver behind most companies' efforts to involve more people in this vital process. Rather, businesses are recognizing that the input of day-to-day decision-makers at many different levels -- from regional sales executives to line-of-business managers to production foremen -- is crucial for building greater clarity and accuracy into budgets and forecasts. For an example of the pitfalls that can occur without such participation, think about a budgeting process that's primarily sales-focused. If a sales group predicts that it will ship more units into a particular region in the coming year but doesn't consult with operations managers about the effects this projection will have on plant capacity, inventory, or staffing levels, the company is asking for trouble. Instituting a Web-based budgeting and planning software framework can help make an organization's plans and forecasts more cohesive by providing employees at various levels with consistent tools for inputting, consolidating, analyzing, and collaborating on relevant data.

Because the end users of such an application are, by definition, diverse, a company must engage in broad-based consensus building during the goal-setting, selection, and rollout of the software to achieve all of its potential benefits. The organization needs to establish strong executive agreement on the bottom-line objectives of the technology system, line up support from the departmental leaders who are expected to use it, and gain acceptance among the employees who will work with it on a day-to-day basis. In the absence of this widespread buy-in, the new software will achieve limited results at best. That's why, once an organization has decided to pursue a more participatory approach to budgeting, planning, and forecasting, it must turn its attention to the selection of participants in the upgrade process.

An Executive Champion and a Solution Champion

The adoption of new budgeting and planning software may be expected to bring relatively minor changes in an organization's current processes, or it may fundamentally restructure how the company carries out these processes from end to end. Either way, the project requires decision-making and problem-solving at just about every step of the way. Before the company shops for a software package, a key individual at the executive level needs to take responsibility for shaping the vision and chief objectives behind the purchase. He or she must work with other principal decision-makers to determine which challenges and opportunities they would like to address, what corresponding capabilities they will require in the software, what budgetary and time constraints exist for the project, and so on.

This executive champion should be familiar with the budgeting and planning practices currently in place across the organization. This knowledge enables the individual to engage in meaningful conversations about where and how to improve. In addition, this person must be able to evangelize the vision and benefits of the project across the organization, as well as to defend the reasoning behind the plans. After the software purchase is made, the executive champion needs to remain actively involved with the implementation consultant or internal IT team to help answer questions and make decisions about how to align the solution with the organization's preferred practices.

Without such top-level guidance, one of two outcomes is likely: Either the people responsible for the implementation will be left to design the organization's budgeting and planning processes, or else different departments and locations within the organization will develop their own, probably inconsistent, ways of working with the software. The first outcome will likely lead to dissatisfaction among those who have to actually use the solution, while the latter -- the evolution of islands of practice -- defeats the purpose of implementing an integrated budgeting and planning solution. As the project's visionary, consensus-builder, arbitrator, and ultimate navigator through the challenges of changing conditions and competing priorities, the executive champion is pivotal to ensuring that the organization achieves what it sets out to do with the software.

While the executive champion provides overall strategic direction, the solution champion is the person responsible for managing the implementation of the technology and its supporting processes. This role requires a deep understanding of the organization's budgeting and planning processes, particularly which types of business information must be captured and summarized as part of those processes. Thus, the solution champion typically is someone in a role that has responsibility for managing the finance group. In many midsize and large organizations, the appropriate solution champion is someone who reports to the executive champion. In smaller organizations, both roles might fall to the same person, such as the financial controller.

The solution champion's key responsibilities include overseeing the solution-scoping and requirements-planning steps of the project, gathering input from the various departments that should be involved, and working with the software vendor or reseller on a daily basis to help execute each successive stage of the project. This person will need to apply insights about the interrelationships between departments -- such as sales, manufacturing, and distribution -- in deciding how best to roll out the technology. Therefore, having a collaborative mind-set and knowing the right questions to ask of fellow decision-makers are key traits for the solution champion. Finally, because the implementation project will likely expose this person to highly confidential information, such as human resources and payroll data, he or she needs to have the utmost trust of the executive leadership of the organization.

Often, a BPM software implementation's executive champion and solution champion find that one of the biggest benefits of their project is its shift of more budgeting responsibility to managers farther down in the organization. It is critical that both individuals be open to this possibility. "Our implementation of a Web-based application has empowered the people who are the closest to the information," says Bruce Borquist of American Baptist International Ministries, located in Valley Forge, Pa. "My ability to involve managers in the process from start to finish has given them a greater sense of accountability when it comes to the budget."

Establish Clear, Concise Goals

Once the executive champion and solution champion are in place and have sketched out initial, broad objectives for the budgeting and planning software project, they can proceed with the vital task of involving others throughout the organization. The executive and solution champions should work with the senior management team to understand their goals related to budgeting and planning. Typically, there should be two actions for this group. First is the definition of the goals of the implementation project and the solution. Second is the determination of the strategic goals for the organization.

Having clear and concise strategic objectives helps the project champions identify key participants in the upcoming implementation. The size of the implementation team depends on the size of the organization. In a small business, the implementation team may consist of just the executive champion and the reseller. In larger organizations, the implementation team will consist of the two BPM champions, at least one IT representative (usually the CIO), members of each corporate function, and the reseller. The implementation team is crucial in setting specific goals that define how the technology will actually support day-to-day processes. This directly relates to the overall concept of making budgets, plans, and forecasts more participatory. In order to capture complete and accurate data from all participants on an ongoing basis, the company needs to build their confidence that the software is tailored to the way they work best.

The goal-setting approach should revolve around two basic questions: What's working well in the organization's existing processes? And what isn't? If people generally think that the current method of generating forecasts is effective, it's almost certainly worth keeping intact throughout the changeover to the new software system. However, an overly complex and labor-intensive budgeting process that requires employees to manually consolidate data from various information sources is a prime candidate for automation when the software environment is upgraded. By evaluating, early on, the effectiveness of the company's current BPM practices, the project's strategic leaders can more clearly communicate priorities to the implementation team. This can considerably reduce the time and costs involved in getting the new system up and running.

Sometimes unexpected events inside an organization trigger this type of evaluation. Sabine Valley Center, a community health resources organization serving northeastern Texas, reached a crossroads when the person primarily responsible for managing budgeting activities suddenly resigned. He had established and maintained a complex, spreadsheet-driven system that required him to manually enter all of the changes he received via e-mail from program managers, as well as to roll up data from more than 100 cost centers to produce program and companywide budgets. When the budget manager left, "I knew we were in trouble and needed a new budgeting system," says Sue Rathbun, the center's CFO. Because the company had a definitive vision of what it wanted its new system to do -- including allowing Rathbun and her team to use drag-and-drop features to set up reporting trees that mirror the organization's cost centers -- it was able to deploy new software within a month.

It's also important to establish clear goals regarding whether the software solution should be managed within the finance group, by internal IT experts, or on an outsourced basis. Cost is obviously a consideration, but so is the complexity of the technology. Relying solely on outside experts to make changes to the system and troubleshoot problems may sound desirable for an organization with limited in-house IT expertise. However, outsourcing limits the finance department's level of knowledge about and control over the solution.

Regardless of who will ultimately manage the software, the solution champion should work closely with the technology vendor and, if applicable, the system implementation consultant in order to understand the full capabilities of the software, as well as where the trade-offs between functionality and manageability may lie. This type of dialogue may also reveal previously unseen potential to expand use of the software beyond the organization's original goals for it.

Another important goal-setting exercise involves answering three key questions: First, can end users within the organization accept the change to a new software solution all at once, or will they respond more favorably if budgeting and planning changes are rolled out in phases? Second, how broadly should the organization make the solution -- or certain capabilities within the solution -- available at various departmental and user levels? For example, what limits should the company place on various employees' ability to enter data, edit databases, or view reports generated outside their area of responsibility? Finally, how complex should the data input and reporting methods be, and how much information do decision-makers at various levels, such as line-of-business managers, require? The answers to these questions will help the executive champion and the solution champion determine when and how to delegate access to the system, security permissions, and other role-specific elements of the technology.

Plan and Prioritize To Optimize Buy-in

The effectiveness of a budgeting and planning solution rises or falls in direct correlation to how willing and well-prepared employees are to use it. That's why members of the project team must be especially diligent about communicating back to their respective user communities what's happening throughout all phases of the implementation.

Two of the most basic and crucial yardsticks that employees are likely to use in assessing the software's importance within the organization are how well the project leader, usually the solution champion, plans the implementation process and how effectively he or she includes other individuals in the process. Needless to say, falling short of objectives and missing timelines at the highest levels of the project make subsequent, lower-level pieces of the project much harder to execute on time and within budget. The implementation is also in jeopardy if all participants do not clearly understand the importance and impact of their role in the project.

Although consistent and regular communication is important, so too is conveying the appropriate level of detail. Burdening people with more specifics than they need may cause them to tune out, get distracted from their actual responsibilities, or overlook some other piece of project-related information that really matters in their role. Generally, most employees want to know three things: where the implementation currently stands, what feedback project leaders want from them, and what the company plans to do next. Covering those bases helps ensure that end users feel valued and informed but not overwhelmed, which builds goodwill toward the solution they're expected to embrace.

In addition, organizations need to allocate appropriate time and resources to training users on the new system, while taking into consideration the business's specific needs and culture. This is another area in which tapping the expertise of the software vendor or implementation partner can be tremendously helpful.

For New Belgium Brewing Company Inc., based in Fort Collins, Colo., the adoption of budgeting and reporting software that gives all employees direct access to information about the company's financial performance was a natural move. "A large part of our company culture comes from our employee ownership philosophy," says Melisse Merrell, assistant controller and treasurer for New Belgium. "Open-book management is so important to us because it lets individuals become involved. Because everyone is an owner of the company, we are all interested in staying up to date on our financial standings and opportunities for growth. That gives New Belgium a unique advantage and attracts very devoted and inspired employees." When employees recognize that they're helping to implement a technology solution that will in turn deliver more knowledge and empowerment to them, strong buy-in is easier to achieve.

Input on the Project Breeds Confidence in the Results

As today's business environment becomes increasingly competitive, organizations must closely manage their different divisions, expenditures, and revenues. To accomplish this, corporate managers must relinquish a certain degree of control and involve more people in the process. They must also implement software solutions that facilitate collaboration and make those systems easy for individuals to embrace, especially people who aren't particularly savvy when it comes to technology or the company's financials.

By involving the right people and gaining the necessary level of commitment to the software early in the purchase and selection process, organizations boost their odds of success. "The budget is no longer something that gets pushed aside when it's complete," Rathbun says of Sabine Valley Center's software-supported financial performance management process. "Program managers have more control over their own money and can make changes fast, giving them a sense of ownership and letting them focus on delivering services to the community, which is always our main objective."

Chris Scherpenseel is a general manager within the MBS Group of Microsoft. You can reach him at chris.scherpenseel@microsoft.com