Budgeting and forecasting application development : an evaluation
Passoja, Pekka (2015)
Passoja, Pekka
Tampereen ammattikorkeakoulu
2015
All rights reserved
Julkaisun pysyvä osoite on
https://urn.fi/URN:NBN:fi:amk-2015112718190
https://urn.fi/URN:NBN:fi:amk-2015112718190
Tiivistelmä
The aim of this research was to evaluate the ultimate benefits of what a Finnish stock listed company achieved as the result of a cost budgeting and cost forecasting application development project. Two separate development projects were carried out for the case company’s Finnish and Russian organizations. The starting point for the project was the case company’s initial need to start using rolling cost forecasting, so that the company could adjust its fixed and variable costs in accordance with the business environment. In addition, the case company wanted to replace its old annual cost budgeting application and implement an entirely new budgeting and forecasting application for the Russian organization, where they had used an Excel program for budgeting and forecasting.
An evaluation of the benefits consisted of the following main question: What were the ultimate benefits the organizations received as the results of this project? This was further elaborated upon with three sub-questions: 1) How well were the Finnish and the Russian organizations able to incorporate the new budgeting and forecasting processes? 2) How have the new budgeting and forecasting processes improved the work of the organizations and stakeholders in the cases of budgeting, forecasting and budget follow-up? 3) How has the use of the new software been adopted and how well does it support the new budgeting and forecasting processes?
This research was carried out as action research. The theoretical framework for action research provided the most suitable approach for this type of development project, where practice and theory are closely tied. The practical findings in this research were based on several meetings, dialogues and observations with the project stakeholders during the Finnish and Russian projects. Through the action research framework, collected practical information was evaluated and transformed into knowledge that was used for the benefit of the organization in the best possible way.
The main findings of this research prove that, from a technological point of view, the case company benefitted considerably due to the new budgeting and forecasting application. The use of the new application has improved work related to annual budgeting and forecasting everywhere within the company. Further findings prove that moving to rolling forecasting is a major change for the organization, which relies heavily on routines perceived to be safe, such as annual budgeting. In addition, it can be stated that nowadays it is technologically possible to implement very complex budgeting and forecasting applications. However, if the requirements are set too strictly, the usability of the application suffers and maintenance becomes difficult.
An evaluation of the benefits consisted of the following main question: What were the ultimate benefits the organizations received as the results of this project? This was further elaborated upon with three sub-questions: 1) How well were the Finnish and the Russian organizations able to incorporate the new budgeting and forecasting processes? 2) How have the new budgeting and forecasting processes improved the work of the organizations and stakeholders in the cases of budgeting, forecasting and budget follow-up? 3) How has the use of the new software been adopted and how well does it support the new budgeting and forecasting processes?
This research was carried out as action research. The theoretical framework for action research provided the most suitable approach for this type of development project, where practice and theory are closely tied. The practical findings in this research were based on several meetings, dialogues and observations with the project stakeholders during the Finnish and Russian projects. Through the action research framework, collected practical information was evaluated and transformed into knowledge that was used for the benefit of the organization in the best possible way.
The main findings of this research prove that, from a technological point of view, the case company benefitted considerably due to the new budgeting and forecasting application. The use of the new application has improved work related to annual budgeting and forecasting everywhere within the company. Further findings prove that moving to rolling forecasting is a major change for the organization, which relies heavily on routines perceived to be safe, such as annual budgeting. In addition, it can be stated that nowadays it is technologically possible to implement very complex budgeting and forecasting applications. However, if the requirements are set too strictly, the usability of the application suffers and maintenance becomes difficult.