This article will tackle budgeting, forecasting, and modelling for projects, using Microsoft Dynamics NAV with third party budgeting solutions.

You can go ahead and nod your head in agreement when I say that financial planning is such an essential element of corporate performance management (CPM).  Sometimes, the caliber of your planning processes can mean life or death for enterprises, particularly in the context of the all too recent recession.  Company-wide planning processes are generally routine and almost always require multiple moving pieces to bring together actual transactional figures and projections for the upcoming planning period.  Alternatively, there are times when an organization or a consultant has to budget for a particular task or project.  Whether you are a project manager overseeing multiple projects, a consultant tracking your billable hours, or a freelance professional crafting a bid for a job, project budgeting then is an important Business Intelligence (BI) term in your role.

I recently had the opportunity to talk with a management consultant who had been hired by a corporation that wanted to overhaul their data management and analysis processes for richer business decision-making.  He was just starting the project, and he had not landed on a complete suite of BI solutions just yet, but he was hopeful to find a software that would solve the business “problems” they face.  My curiosity about project budgeting led into a thorough chat about how he financially plans and proposes projects in his career.  He stated that he thought most people thought of it as a series of inflated guesses, but in reality, especially with the right budgeting solution, it can and should be precise.
Now, you could budget for projects within the Dynamics NAV interface, but, like with most ERP solutions, you have few possibilities to create user-friendly data entry screens to capture the project budget, so most companies end up doing this manually in Excel.
Compared to traditional planning, which is based on a regular period of time (like a fiscal year), project budgeting is framed around a task.  As an example, the management consultant, who we’ll call Charlie, will analyze the corporation’s currently implemented BI tools, evaluate the current CPM, execute a search for an adequate software solution, and implement the newly acquired tools for 9-12 months. Charlie’s work for this company is perfect to illustrate project budgeting norms and also, an overview of a modern BI implementation.  In this article, I will discuss hypothetical project budgeting, using Charlie as an example, and I will discuss modern functionalities to look for in today’s budgeting tools.
We will call the company Charlie is doing consultant work with “123, Inc.”  123, Inc. would like to bring their analytics into the 21st century, especially regarding their BI tools.  They are still relying on FRx even though Microsoft has retired the report designer and any support for the tool.  123, Inc. is very happy with Microsoft Dynamics NAV, but the native project budgeting functionality has been underwhelming.  They’re currently performing homegrown Excel budgeting, which is too tedious for their company now.  When they wanted to contract a consultant to cost effectively upgrade their BI processes, someone recommended Charlie, and the project budgeting began.
First up when project budgeting: identification of project costs.  Project costs can be billable hours, fixed costs, or both, as with most times.  In our real world example, Charlie would draft a plan and maybe coordinate with 123, Inc. on the billable hours, but he might also include costs incurred along the way, such as technology, travel, training, development, and office supplies, among other things.  These are often referred to as soft costs and are sometimes allocated to subcategories, like direct and indirect costs.  Additional cost categories for other projects might be construction costs, contract work, equipment or furniture, moving and storage, and even planning for a contingency amount with the knowledge that projects involve risk that can be difficult to budget for accurately.  Risk is a major part of any budget.
In the realm of budgeting, risk points to the ebb and flow of the actual project experience, whether that has to do with money, time, or resources.  Depending on how complex and disparate the BI tools and processes of 123, Inc. are, Charlie might require significantly more time than he originally budgeted to assess their BI needs.  If final approval of a BI solution and scheduling of the implementation becomes a bureaucratic bottleneck situation, time allocated to finish this project can be at risk.  Regarding acquisition and deployment of a new product, 123, Inc. has to budget for Charlie’s fees, but they have to also decide where to add a line item for the solution they decide to implement, per Charlie’s recommendation.
123, Inc. can decide to wrap the costs of the solution in the project budget – or they can plan for the direct and indirect costs of Charlie, weaving the purchase and implementation costs of the new product into their own fiscal budget.  After talking to Charlie, I got the impression that this corporation is not very familiar with the current pricing of today’s BI software, but they are comfortable with a flexible range of how much they would like to spend.  Because BI software purchases typically include maintenance, support, and/or training as annual fees, 123, Inc. could include this purchase in their annual budget – or add the initial purchase into the project budget, but allocate the yearly feeds into their fiscal year plan.  Whatever characteristics Charlie has to find to meet their BI needs will dictate the length of the search process, which could be long, and the price tags could vary drastically.
Much like how most financial reporting tools do not produce sub ledger reports, plenty of budgeting tools do not have native Project Budgeting functionality because most companies only budget for a fixed period, like a fiscal year.  Today’s business world, however, is comprised of more consultants, freelancers, and project managers who rely on project budgeting.  In addition, there are entire industries that often are built around projects, such as construction companies, defense contractors, engineering companies, etc.  The truth is that you do not need to hire a management consultant, like Charlie, to overhaul your BI analytics.  You can do your own research – analyzing your needs and goals and figuring out modern offerings to help you achieve.  Solver, Inc. is happy to answer questions and generally review BI360’s easy-to-use Excel, web, and mobile BI tools with both real-time or data warehouse integrated analysis, comprehensive budgeting and collaboration as a way to accelerate company performance management for Microsoft Dynamics NAV users.

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