Budgeting in the 21st Century: Automation in the Workplace

The readings for the past weeks have delved into the importance of keeping updated, exact accounts and an ambitious yet realistic budget. Keeping the numbers aligned and in check is, of course, imperative to keeping a business organized; but are there ways to make this process go more smoothly? One way is through the development of technologies that make budgeting more simple and accessible.

As John Orlando states in his Centage article, “automation allows organizations to improve the monitoring and reporting of the business budget and forecast in real time. This is key for the future health of the organization. Improved technology and data automation can create reports that can compare historical data, improve dashboards and generate what-if scenarios” (Orlando). Additionally, the program develops a system that constantly syncs with the organization’s general ledger, therefore minimizing risk for error in the long run.

Though this tech minimizes the risk of human error, however, it may be a difficult shift for arts organizations to make. According to the Pew Research Center, there is some resistance to using technology in the art world, in terms of both audience engagement and use of tech in the office: only “63% say digital technology is ‘very important’ for helping them use their organization’s resources more efficiently” (Thomson, Purcell, and Rainie). On one hand, it may be enticing for arts organizations to use this tech to move away from burdensome day-to-day number-crunching; on the other, it is important to stay realistic and note the field’s slowness and resistance to such advances. Certain organizations may not have the capability to teach staff how to use such programs, even though they may be beneficial to the entity in the long run.

In addition, though such technology can be a boon in the workplace, it is also essential to be able to plan and implement a budget without the use of these tools. Losing the skills needed to effectively plan an organization’s budget without reliance on tech could be disastrous, especially today when hacking and he release private information are so pervasive. Tools like this one should be used, but in moderation: an organization cannot become too dependent on them.

What do you think of the development of such technologies as automation? Do you think that arts organizations will adopt these quickly, or are arts organizations generally too behind to be able to implement them effectively and in a timely manner?

budget pic blog post

(Birks)

 

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Sources:

Birks, Amber. “Budgeting: Not an Easy Task But a Worthy Cause.” Chill Maadi. 7 October 2014. http://chillmaadi.com/budgeting-not-an-easy-task-but-a-worthy-cause/.

Orlando, John. “How Technology Can Improve the Business Budgeting Process.” Centage. 13 June 2017. https://www.centage.com/business-budgeting-planning/.

Thomson, Kristin, Kristen Purcell, and Lee Rainie. “Arts Organizations and Digital Technologies.” Pew Research Center. 4 January 2013. http://www.pewinternet.org/2013/01/04/arts-organizations-and-digital-technologies/.

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6 thoughts on “Budgeting in the 21st Century: Automation in the Workplace

  1. It is not very clear to me how automation would work for budgeting and financial planning. The idea of technology providing capacity for building “in systems that automatically sync with the general ledger” seems complicated considering the risks and investments at stake (Orlando, 2017). There is a significant investment needed to automate all the financial information that might be useful past years. The automation of all these information from excel to the new system could take a long time, slowing-down the process at the beginning. Once automation has started, the organization needs to invest money and time to train all staff members who deal with the company’s money transactions. In the case of arts organizations this might just not be possible financially, and if the organization is doing well already in terms of budgeting and finances, I don’t see a need for automation. Passing everything to a computer data base entails serious risks, like losing information due to cyber-attacks. The revelation of financial statements and budgets to the public without the company’s will could be devastating. Donors’ names could be made public and the company’s confidentiality hindered. Therefore, unless there is a way to rule out risks, automation is not the best idea.

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    1. Hi Lucy,

      Indeed! I see your point that the implementation of automation could be very expensive, and I agree. However, implementing anything into the workplace, automation or otherwise, always takes time and money anyway, so I think this is a moot point.

      Additionally, automation does not necessitate housing sensitive information on a server like the cloud (which, I agree, would facilitate hacking). This sort of accessibility of which you speak is determined by where the information is kept (internally or externally, etc.), as we covered in class. This means that an automation program would be at most equally accessible / hackable as Excel itself. In any case, many arts organizations are 501(c)3s that are required to make their financials known to the public through a 990, so I’m not too sure this is really an issue.

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  2. I agree that automation can inform the development, as well as simplify the implementation and tracking of a budget; also, staff productivity can be maximized when necessary tasks, such as generating invoices for donors or financial reports for meetings, are automated through accounting software. Demands for financial accountability from funders and other stakeholders have led arts organizations large and small to recognize the importance of accounting technologies for accurate reporting. However, I think the crux of using automation technologies comes down to “issues of staff capacity and training” (Thomson et al., “Arts Organizations and Digital Technologies”). Unfortunately, as the Wallace Foundation highlights in a 2012 report on nonprofit financial management, “the majority of organizations had appropriate software but were not using it to its full capacity—most likely because staff lacked the training needed to do so” (Kotloff, 10, http://www.wallacefoundation.org/knowledge-center/Documents/Building-Stronger-Nonprofits-Through-Better-Financial-Management.pdf). With this in mind, I think arts institutions must continuously seek resources and opportunities for employees’ professional development, focused on understanding evolving accounting technologies that contribute to organizational fiscal health and responsibility.

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  3. Hi! as a fan of new technology, I agreed that the development of technologies can make budgeting issues more simple and accessible, which is essential for the art managers to keep updated with monetary data. However, how to make full usage of automation in art organizations is still questionable
    First of all, I strongly insist that the trend of automation is irreversible. When we are dealing with daunting and mistake-irresistible budgeting issues, it is a good idea to implement automation. For the organization that wants their key decision makers to be agile and move quickly, technology and automation are an important part of the way forward(Orlando,2017). Talking about automation generally, our problem in recent years has been slow productivity growth, not growth that is too fast that automation is urgently needed, especially in art world. The automation technology is so fast-changing that people must be able to acquire new skills throughout their careers. When education fails to keep pace with technology, the result is inequality. The training of the employers is costly. AT&T spent $30 million a year on equipping its workforce with digital skills. Apparently, art organizations which are keep struggling with its balance between income and expenditure, are not willing to bother spending more on automation training. Technologies aren’t life raft, but a bridge to the next generation of art managers. In this generation, it’s better for them to notice the importance of realistic, detailed, updated budgeting first.

    Resources:
    The Economists 2017, accessed on Nov.17th 2017, https://www.economist.com/news/leaders/21714341-it-easy-say-people-need-keep-learning-throughout-their-careers-practicalities

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    1. Hi Luella,

      I agree that automation isn’t absolutely necessary, especially considering that organizations have been doing well without it for a long time. Automation could reduce mistakes in organizations that may not be as clear and organized with their financials, reducing the risk of sending an organization into debt or crisis because of avoidable mistakes. But I don’t think its implementation would be as expensive as AT&T’s $30 mil expenditures – AT&T is an enormous tech-driven company, so it makes sense that every single employee is well-versed in the tech they need to develop their products.

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  4. Generating reports and “what if scenarios”, is vital for strategy, budgeting, forecasting, or any other snynomous name for planning. Otherwise the planners are forecasting blindfolded relying on “experience” and “intuition.” John Cinage’s quote, “Improved technology and data automation can create reports that can compare historical data, improve dashboards and generate what-if scenarios,” furthers the point that organizations should be relying more on these advancements, which can streamline processes.

    It has already been discussed and so I offer another belief that introducing automation into the budgeting and accounting processes can have short term increases in learning curves, but once established and used appropriately, the organization should be able to reduce wastes hours, and perhaps redirect resources previously tied up in reconciliation, to assist the marketing team on analyzing survey data for example.

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