Whether you work for a government agency, a high-tech company or a service provider, your organization must plan its annual budget. While many members of your organization might be familiar with planning or budgeting software, the set of activities to create, control and update the budget is known as the budget process. Digitalization is tactical – automating activities, for example, while Digital Transformation is strategic – focusing on improving overall business processes and increasing business value.

Self-Check – Maturity level

Digital transformation is much more than a buzz word. I look at digital transformation as the maturity level of an organization that allows it to have modern and continuous capabilities to process improvement and optimizations. If we look at the planning processes of an organization, there are three maturity levels to consider:

  1. An organization in which the planning process relies on manual activities.
  2. An organization where some manual activities are automated as a tactical improvement (digitalization).
  3. An organization which observes its planning processes and identifies the steps to strategically enhance them through digital transformation.

It’s essential for executives to understand that digitalization may be a step toward digital transformation, but digital transformation requires its own process and a more holistic approach. Digitalization brings technological improvement but not a huge business value.  Planning processes require collaboration, business logic policy and data integration. The maturity level for digital transformation can be measured by examining the following areas:


The most significant indicators of process improvement are better collaboration and less “silos” within the organization. Modern enterprise technology should provide a platform to collaborate between different organizational levels (i.e. top-down and bottom up) and consolidate regional planning. Additionally, digital transformation should aim to bridge between strategic, financial and operational planning.

The lowest maturity level of collaboration is identified when most of the communication between functions (as branches and department managers) is an “offline” communication (emails). Digitalization usually allow to collaborate on a specific business function. For example, a system that allows modern sales planning but misses links between the sales, compensation and the cost of sales will not allow digital transformation for planning.

Business (planning) logic

Some planners feel “emotionally connected” to their spreadsheets especially since they spend a lot of time and knowledge building a variety of business logics in those spreadsheets. We simply cannot reap the benefits of digital transformation where significant logics resides on vulnerable spreadsheets.

Organizations who automate (or collect)  only the results from these spreadsheets are usually siloed and have many loose ends in their process integration and planning capabilities.

Managing the business logic as part of a planning repository is an important part of the digital transformation. “Business logic repository” should include business drivers and their impact on the business results. Drivers allow planning to be optimized and provide better analysis for variances between planning and actual.

Data integration should be considered for the following data types:

  • Baseline data for planning includes financial results, Customer and billing information etc.
  • Planning data from:
    • Different version scenarios
    • Different periods (Last forecast, last year budget)
  • Advanced forecast prediction tools (AI and machine learning)

Digital transformation should be achieved when all of the different data sets can be automatically synchronized and integrated together. Planning processes that requires users to “download actual files” or manually synchronized between automated tools and manual adjustments will not allow a full optimization of planning processes.

Technology matters for EPM

The EPM market is growing, and some software tools tend to bring “data entry” (or write back) capabilities to their customers. Many organizations who try to digitalize their activities may benefit from those solutions. However, looking at digital transformation as a continuous goal requires more than data entry capabilities. To fulfill a visionary mindset of digital transformation EPM technology must be a single platform that allows at least the following:

  • Start small and grow fast:
    • Scale to any number of users that may be part of planning processes.
    • Add models and “smart” capabilities (logics, control) over time.
    • Agilerapid development that enables fast results (days per model) and easy “tweaks”.
  • Business logic must be managed in a way that it is:
    • Dynamic and real time.
    • Transparent and understandable for both power and end users (using scripts for logics will not allow it).
  • May be used for a variety of planning processes while:
    • Executives, managers, users should all using the same data.
    • Workflow exists.
  • One step ahead – having advanced planning and analytics capabilities (Machine learning and AI)

Digital transformation creates value for any business process. The highlights above should bring insights for those who believe in the value of modern and improved planning processes. We’ll cover best practices for utilizing those concepts in my next post.

Author: Liran Edelist