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Things to consider before a new budget year

Dec 20, 2017 10:00:00 AM / by Henrik Schøtt Kjærgaard

 House-of-Improvement-Consider-Before-New-Budget-Year

Every business’s financial year is different. For many companies 2018 might be focused on GDPR compliance and Masterdata. January somehow seems like a good month to talk about fine-tuning your investment budgets for the next year, and considering some new business cases, whether those are for new hires, or new systems such as HR, Payroll or other related systems.

There are many things that need to be kept in mind when it comes to the end of the year. Preparing budgets is not a trivial task. Most of us probably heave a sigh of relief when it is done. But although it may be tempting to move on swiftly, it may also be worth looking at your budgets again, to double check that you have included everything.

New year - new systems?

If this is the year in which you plan to change your business system(s), you may well already have allocated money for this purpose in the budget. But did you also remember to allocate money for internal and external resources to enable them to prepare for the new system?

Preparation takes both time and resources. It is also much more the rule than the exception that most companies overlook this, and therefore fail to include a budget line for this. Most remember about licenses and resources associated with the implementation itself, but for some reason, the preparation phase is often considered as something that you just do within existing resources. Anyone who has tried to change systems in a company knows that there is nothing simple about this process. It just takes a lot of time and effort and you cannot afford to cut corners, since it will affect all your work with the new system. 

Integration of systems also costs. If you have failed to allocated any money in the budget for the preparation phase, you have probably also overlooked the cost of integrating the new system(s) and the company's existing systems. Existing systems must be prepared so that the transition to and integration with the new system becomes as painless as possible. This too takes time and internal resources. 

It is never nice to find that there are one or more items that you have failed to include in the budget. You will, however, do yourself a favour—and save the company some frustration—by revising your budgeting to include preparation and integration of the new system. The best way to deal with this is to make a strategy and clearly define what you want from a new system in relation to your existing systems and processes. This will make the goal clearer to everyone and you can work together to achieve it. 

Turn the process on its head

 If you have already started your new budget year, you may be thinking that it is too late to start developing a new strategy and plans. We would argue, however, that it is a case of ‘better late than never’. If you are in the process of replacing a system in your company, we recommend stopping to check that you have put the strategy in place first, and then the budget. If necessary, you may have to reverse the process. Even if you have already committed significant resources, this could save you far more in the long term.

Topics: GDPR, Budget, HR Tech