How can you use big data to improve your budgeting process?

Using a big data required a classification, heading and subheading. All activities needed to be head and subhead Eg Recurrent expenses,salaries. Profit from sales of form Consultancies. Date of submission or month, Bill utilities,water or electricity

I agree that first of all organisation must have IDENTIFIED GOAL. One of the big challenge is that many organisations are not aware about the Goal, hence first of all need to identify the goal what you want to achieve like one of that major challenge is to choose between market share and profit. Industry and market data can be very helpful to identify the goal basis demand, challenge and competition in the market.

In today’s data-driven landscape, what has helped me big time is to understand that the key to effective goal identification and prioritization lies in recognizing the symbiotic relationship between internal resources and external market dynamics. Rather than favoring one over the other, it’s vital to understand that these elements are intrinsically linked. By assessing my team's expertise and skills in conjunction with staying attuned to market trends, I (and you!) can uncover invaluable insights. This holistic approach allows me to create strategies and projects that harmonize both sides, propelling your company toward success.

By incorporating big data into your budgeting process, you can make more informed decisions, reduce uncertainty, and adapt your financial planning to the dynamic business environment. It allows for a more agile and data-driven approach to budget management. Stay Informed, Competent Analysts, Recognized Software, Data Quality, Documentation, Internal Controls, Regular Audits, Engage with Experts, Peer Reviews, Consistency and Comparability, Transparent Reporting, Training and Development, Feedback Mechanism, Ethical Conduct, Compliance Checklists, External Validation , Risk Assessment. By following these steps, you can establish a robust framework for financial analysis that aligns with industry standards

Using big data to improve your budgeting process can lead to more accurate financial planning and decision-making. Here are some steps and strategies for leveraging big data in your budgeting process: Data Collection, Data Integration, Data Analysis, Predictive Modeling, Risk Assessment, Real-time Monitoring, Cost Optimization, Scenario Planning, Scenario Planning, Training and Skills Development, Data Security and Compliance, By integrating big data into your budgeting process, you can make more informed decisions, adapt to changing market conditions, and optimize your financial performance effectively.

The use of Big Data in the Budget Process makes it possible to identify trends that are not possible to be caught on regular data. The relationship between the volume of data and the accuracy of analysis is a crucial point in any discussion about Big Data, especially in the context of financial planning and analysis (FP&A). In statistical terms, a larger dataset generally provides a more accurate representation of a population, reducing sampling error and increasing the confidence level of the analysis. But it's not just the size; the variety and velocity of data also contribute to its utility.

Once goal is identified, then secondly we need to identify the resources. Basis available resources and required resources for your goal, we can make the best budget. Basis data, first we must prepare the budget basis available resources and then can be prepared scenario based resources.

Forecasting required building of your forecast from previous data. Decision is a collaborative effort each and every one in the team to bring his input and decide on the best. For school fees or hostel/hotel before you decide you have to consider existing situation or sister organization closer.

In an unpredictable economy, the "what-if" approach is invaluable. While setting goals is essential, big data elevates our foresight, allowing businesses to dive into various "what-if" scenarios. What if there's a market shift? Or a new competitor? By simulating these situations, big data offers a roadmap through uncertain terrains. It's not just about foreseeing changes but being equipped to navigate them. Beyond mere predictions, big data allows us to actively engage with potential futures, ensuring we're not just responding to change, but leading it.

In my opinion, it is important to create all possible scenarios, specially the pessimistic one. When we prepare a plan, we will need to analyze the business, the industry and the macroeconomic situation of the country. This will help us reducing risks of failures.

Your budgeting process with or without AI is primarily dependent on the quality of your data. Accuracy, timeliness, completeness and integrity are paramount to any type of analysis. Make sure the appropriate controls are established and properly working prior to deploying automated analysis. Curate carefully your data sources and make sure you understand data hierarchy and definitions. AI can save a lot of time but it is dependent on the depth of knowledge from the person creating the query.

Big data certainly gives or indicate benchmarks for KPIs but one should correlate these indicators. eg. if you are getting upward trend in revenue for product X in county Y then also analyse reason whether it price or demand or purely marketing. If it is marketing then can we get same ROI on in other countries or on other products.

Real-Time Monitoring: Implementation of real-time data monitoring to track budget's performance as conditions change. This allows for quick adjustments in response to unexpected events.

Data Visualization present the budgeting data in an easily understandable and visually appealing manner using charts and dashboards. This aids in communicating insights to stakeholders.

When Big Data is utilized to create interactive dashboards or real-time reports, stakeholders—from team members to investors—can engage with the financial metrics that matter most to them in an easily digestible format. This fosters not just understanding but also a sense of ownership among stakeholders, as they are better equipped to provide meaningful input or feedback. The transparency and real-time nature of data sharing enhance trust and accountability across the board, leading to more aligned and effective budgeting outcomes. This isn't just modernizing the process; it's revolutionizing the way we think about financial planning and stakeholder involvement.

Here are some specific examples of how businesses are using big data to improve their budgeting process: 1. Walmart uses big data to forecast sales and inventory levels. This helps Walmart avoid overstocking and stockouts, saving the company millions of dollars each year. 2. Amazon uses big data to forecast customer demand. This helps Amazon to allocate resources to the right departments and ensure that customers receive the products they need quickly and efficiently. 3. Netflix uses big data to forecast viewership and produce original content. This helps Netflix to attract and retain subscribers.

Big Data can help you identify trends and correlations. Authenticity of data source and accuracy of figures is vital. Not every time it's the same, go extra mile, look for external factors in past that could have an impact. Make sure to structure the data, get rid of the outliers, rectify error or missing values before diving into it. Clean, reliable and timely data can help in forecasting upcoming opportunities and threats.

Absolutely! Your insight into how big data can enhance the budgeting process is spot on. Leveraging large datasets allows for more accurate forecasts and insights, enabling businesses to make better-informed budget decisions. Identifying patterns and correlations hidden within the data can lead to more precise predictions of revenue, expenses, and market conditions. Moreover, big data analytics can optimize resource allocation and uncover opportunities for cost reduction or revenue generation. It's incredible to see how technology can revolutionize traditional processes like budgeting. Thank you for highlighting the potential of big data in this context!

Erstmal zu Big Data: Big Data zeichnet sich durch die drei V's aus: Volumen (große Datenmengen), Vielfalt (verschiedene Datentypen und -quellen) und Geschwindigkeit (schnelle Generierung und Verarbeitung von Daten). Für mich als Controller gäbe es daher folgende grundsätzliche Fragen: 1. Ist der Budgetprozess momentan so gestaltet, dass die genannten 3 Vs (Datenmenge, Datentypen und Geschwindigkeit) vorliegen und folglich die Nutzung von Big Data Anwendungen mir hier Vorteile verschaffen? 2. Wenn 1 = Ja: Was sind die Voraussetzungen, um Big Data Anwendungen überhaupt effizient und zielführend zu nutzen? Ich denke da z.B. an Datenqualität und -management: Gute Datenqualität und effektives Datenmanagement sind entscheidend.