Budgeting for Manufacturing & Distribution with Sage X3

This article is going to explore your budgeting and forecasting solution options that can expand your Manufacturing and Distribution planning processes with Sage X3.

Regardless of whether it is a budget, a forecast, or a what-if scenario you are putting together for your company, you will need actual historical numbers and projections, so you can plan effectively for managing your manufacturing or distribution company, meeting challenges and seizing opportunities in the coming period.  There are several software choices that can aid manufacturing and distribution companies using the Sage X3 ERP system in taking their budgeting to the next level, whether you choose to design your own process, rely on native Sage X3 functionality or select an independent software vendor (ISV) tool.  This article will discuss some of the premier options for today’s budgeting, forecasting, and modeling specifically to meet your manufacturing or distribution planning needs with Sage X3.

To start off, let’s pinpoint some key characteristics you should be seeking in a planning tool.  Maybe this seems like a no-brainer, but ease of use should be priority #1.  Business user friendliness should come in the form of accounting logic, reusable budget templates, and a streamlined process.  Budgeting isn’t a fun task for most people, so your software should be a solution, not added frustration, especially because budgeting is a team sport.  Speaking of which, collaboration should be a focus for any ISV selling a modern planning tool.  You should be able to avoid the back-and-forth of emails with spreadsheet attachments of separate budget information – and instead of patching all of this data together, you can facilitate a collaborative process through today’s premier technology.  And with collaboration, you have to have strong security for your sensitive information, like payroll details.  Quality security should allow access to your budgets without certain data getting in front of the wrong eyes.  And with this functionality, budgeting team members can achieve a sense of ownership, with department supervisors contributing to budgets that they have to manage throughout the year.  It all seems so simple, right?

Not every solution gets it right though.   We’re going to use ease of use, collaboration, and security to explore how the following planning tools measure up for manufacturing and distribution customers using Sage X3: manual Excel budgets, Microsoft Forecaster, IBM’s Cognos TM1, Oracle’s Hyperion, and Solver’s BI360.

Let’s start with the most globally trusted spreadsheet application, Microsoft Excel. Almost 90% of today’s companies still depend on Excel for homegrown budgeting processes.  The program is business user friendly due to its ubiquity for the past couple of decades, but Excel is not built with a database that allows for easy collaboration – or the security necessary for that teamwork.  Because Excel has static input templates, several problems can come up when you are manually linking spreadsheets for an aggregated budget.  As an alternative, Microsoft also produces a budgeting-specific tool, called Forecaster.

Over the years, 2,000+ companies, including manufacturing and distribution businesses, have deployed Forecaster for budgeting and forecasting tasks, likely due to the strength of the Microsoft brand.  However, the program is in maintenance mode in terms of development because it is definitely at the end of its life cycle.  Forecaster is its own proprietary interface, even though you might think that its Microsoft association would mean that Excel formatting would be employed.  Instead, users will have a potentially longer learning curve because they have to get used to a completely new set of features, formulas, and functionalities, which translates to more training dollars.  Additionally, Forecaster is arguably a little too simple for modern budgeting demands, especially when you compare it to ISV tools.  Finally, it is well known that plenty of Forecaster users are doing some of their budgeting in manual spreadsheets outside of Forecaster in order to accomplish the layout and calculations they require for processes like complex payroll or revenue budgets.

Two mainstays in the software marketplace include Oracle’s Hyperion and IBM’s Cognos TM1.  Both tools were pretty popular back when they emerged in the early 1990’s.  There’s a significant following for both IBM and Oracle technology offerings in the upper-market consumer base, and Hyperion and Cognos follow that trend.  Their age offers both power and on the flip side, technical complexity, so they usually require several internal resources allocated just for management of models.  Some Excel has been built into the tools, in addition to web front end functionality for larger manufacturing and distribution companies or those that don’t prefer Excel-powered software, but for everyone else, these tools will require you to learn proprietary formulas and codes, as well as OLAP cubes – all proprietary (i.e. Essbase and TM1) – for data storage, consolidations, budgeting, and rules.  Simply, the development of these products over decades account for the complexity.  However, both are part of wide-reaching Business Intelligence (BI) suites, albeit typically expensive and not as “fully integrated” as marketed due to acquisitions from diverse vendors over time.

A comprehensive suite of BI tools means that you are investing in organic ease of use due to the singular group of sales, consulting, and support professionals who can help with all of your analytical tools for Sage X3.  BI360 by Solver, Inc. delivers a fully integrated complete BI suite.  BI360 is a modern Excel add-in, but also offers hybridity in the form of Web budgeting.  With this flexibility, users can simply and securely collaborate on the design and use of parameter driven, dynamic input templates, whether in Excel or through a browser.  BI360 can alternatively be hosted in the Cloud by several Sage X3 providers.  Because Excel is powering both the add-in and the web-based interface, deployment and training are much more achievable for business end users.  BI360 hasn’t been around for a full decade yet, and accordingly, comes equipped with modern functionality, like multi-year budgeting and rolling forecasts, in addition to other features like a Web portal, responding directly to consumer demands for business user friendly, collaborative, and secure budgeting.  But let’s discuss budgeting for manufacturing and distribution specifically.

In terms of budgeting and forecasting forms, you need a tool that will develop your planning tasks for richer manufacturing and distribution analytics.  A payroll module can aid in organizing and planning with union/non-union pay scales and shift differentials.  A capex module allows you to plan and oversee the expenses you anticipate incurring for equipment purchases and maintenance.  A project module zooms in on design and production for a new product or product build.  An inventory manufacturing module provides demand production planning with focus on cost, pricing, and quantity.  An expenses module will allow you to order your projections for general and department expenses.  Lots to consider, but I’m hopeful that this article will help you in finding the solution for effective, collaborative, and secure financial plans that department heads can own.  Solver would be happy to answer questions and generally review BI360’s easy-to-use Planning solution for collaborative, streamlined decision-making capabilities for manufacturing and distribution organizations using Sage X3.

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