I couldn't believe it, I'd struck gold! The numbers were incredible! It was clear that all the hard work we'd done had paid off. And, how it had paid off! Business books would be written about the transformation. This was no ordinary rebudget, this was revolutionary.
Then that sick feeling in my stomach.
Excel, the bitch, had made a mistake. More accurately, it's mentally challenged user had made an incredibly simple mistake. It was more satisfying to blame Excel though. Why would I want to anchor the row AND the column? Excel should have known that right?
Wrong.
Millions of pounds lost in a matter of seconds. I was heartbroken. Excel should have a warning to not be used by optimists. A cynic would have spotted something was wrong immediately, but I wanted to believe this was true.
What could be wrong here?
Forecasting and budgeting absorb countless hours of every business and it is very important to have the yardstick and debate about how we achieve our goals. But judging the success of the business against these yardsticks depends on an oft overlooked assumption - that we are good at forecasting.
If a business misses its budget, is it a failure, or was the budget wrong? Ultimately, it is right that the leaders are punished either way, though a wrong budget seems a lesser crime than a business failure.
As with all data, I think budgets themselves shouldn't be taken in isolation and should be reviewed against a wider context. This sounds like excuse making, and it probably is, but it is wrong to assess any business against one metric only.
Then there is also the human behaviour to consider. If a business wildly exceeds its budget, then that is a sign of sandbagging with managers potentially under reporting to boost their own bonuses? A budget "should" be a faithful expectation of the performance, but this "should" also be led by people who are optimistic of the performance - if a manager doesn't believe in the business, who else will? - so by definition the budget should overstate expected performance. The political game of budgeting makes it impossible to work out whether the budget is likely to be above or below management's real expectation. (personally, I'm too dumb to "game" it)
Add to this the potential for calamitous Excel slips and you realise that if the budgeting process is an art rather than a science it is, at best, a crayon scrawl.
Alternatively, the rest of the world is much better at Excel and budgeting than me. This is quite possible.
Right, back to the job in hand. What's that? There's only 12 months in a year? Bugger.
Me versus Excel (Excel winning)
