By Mirko Holzer
Today's marketplace is fast-moving and fluid, shaped and reshaped by unforeseen events and global disruptions. Marketers can no longer create a static marketing plan at the end of each year and then expect to flawlessly execute on the plan without ever having to change course. The same holds true for marketing budgets. Marketing teams — and their budgets — need to be agile, able to turn on a dime, and adjust their spending weekly, daily, and sometimes hourly to address ever-evolving market conditions and opportunities.
However, according to a new Forrester research study commissioned by BrandMaker, a majority of marketing leaders are making do with older solutions and systems that require as much as a month or more to effect budget changes.
Most marketing organizations are settling for highly manual, labor-intensive budget management capabilities that are long on spreadsheets and short on automation. Shifting investments can take months or longer, which in turn prevents marketers from delivering full value to the business.
The reality, of course, is that "making do" and this lack of agility is nowhere near good enough for today's world.
According to the Forrester report, many marketing decision-makers say their organizations are effective at responding to internal and external factors that necessitate budget and resource adjustments. But are they really? The data suggests otherwise.
Only 30 percent of survey respondents say they are capable of adjusting or reallocating spending based on campaign performance within a week. The turnaround time is similarly disappointing for adjustments based on changes in customer needs, competitive landscape, and market conditions. In a perfect world, organizations should be able to make these budgetary changes in near-real time, but only 11 percent of respondents say they can make the necessary updates within a day.
The Problem with Budget Management Today
Budget management is a major part of the job for most marketing executives. But it's a job that few have mastered. In fact, Forrester found that seven in 10 marketers say they spend more time on budget management than they would like — time that could be better spent on strategies and programs that help them realize key marketing goals. Specifically, survey respondents cited manual processes, collaboration challenges, and a lack of visibility as the top reasons they are spending too much time on budget management.
One key problem is that most marketers are still bogged down by spreadsheets. They are enduring tedium, time loss, and headaches as they struggle to manage their budgets manually. But in the war between automation and Excel, automation wins hands down.
So how can marketing decision-makers increase their agility while at the same time reducing the amount of time and effort they spend on tracking spending day to day? The answer lies in technology that boosts automation for budget management, such as automating manual tasks for tactical issues like international exchange rates and split purchase orders.
Multiple Budgeting Tools Create Added Complexity
Effective marketing also requires real-time visibility and automation to speed up decision-making and maximize performance. But that remains a challenge for many organizations, with only 40 percent of Forrester's survey respondents saying their budget and spend management is mostly automated today. Even fewer report the clear visibility across marketing teams, lines of business, and key partners necessary to provide the insights needed to facilitate real-time decision-making.
Clearly, the goal is to increase budget agility through increased automation and improved visibility. But, somewhat paradoxically, current technology tools are preventing many organizations from increasing automation and improving performance.
The main culprit, as mentioned earlier, is the spreadsheet. Even though spreadsheets are notoriously labor-intensive and prone to human error, they are still the go-to tool in many marketing and budgeting arsenals. What's more, mistakes are common when using multiple spreadsheets with different currencies.
The second culprit is the number of tools that are being used. Indeed, just 14 percent of survey respondents said they are using a single solution for budgeting. Using multiple tools limits visibility and slows budget optimization processes, especially when spreadsheets are the primary tools involved.
The good news is that many of the top challenges that hinder efficient and effective budget management can be solved with the right technology solutions. An enterprise budget management solution for marketing, such as a centralized marketing resource management (MRM) software package, can resolve many of these top challenges by eliminating the knowledge silos that slow collaboration and by providing visibility across the entire business.
In fact, 40 percent of respondents cited the lack of such a solution as a reason they are spending too much time on budget management and not enough on realizing marketing goals and providing business value.
Not All MRM Tools Are Created Equal
However not all MRM tools are alike. Here are some critical enterprise MRM capabilities required to maximize marketing ROI, as noted by Forrester's survey respondents:
- Real-time insights. Real-time access to data on spending and performance is critical to make adjustments quickly and correctly. The agility gained by leveraging data and analytics to strategically execute changes in real time can be a significant competitive advantage.
- Transparency across all marketing budgets. Visibility is essential for timely understanding of potential budget risks, under-performing programs, and where budget should be shifted to drive greater success. Strong transparency should also include effective integration with other business systems, like enterprise resource planning.
- Automated budget processes. Automation goes hand-in-glove with real-time data, enabling marketers to greatly increase their operational agility, efficiency, and effectiveness, which saves time for higher-level strategic thinking, planning, and market execution.
The bottom line is that marketers require greater agility than ever before to keep pace with sky-high customer expectations and day-to-day business demands. They must be able to manage and reallocate budget where and when needed in real time — not next month or next quarter.
The right budget management capabilities can help ease this burden and give marketers the agility they need to maximize ROI and the freedom they crave to focus on bigger picture strategic issues. This starts with an enterprise MRM solution that can automate budget processes, improve collaboration, and enable visibility into all marketing programs — across teams, the business, and partners. This is critical for supercharging performance and ensuring that marketing organizations are quick and nimble enough to thrive in today's digital economy.
About Author: Mirko Holzer is the CEO of BrandMaker, a partner in the ANA Thought Leadership Program.