The Irony of Financial Planning & Budgeting…

…A Case of the Shoemaker’s Children

By Kristy Neckowicz

Each year, financial and capital program managers must strike a balance between rate increases and the requirement to modernize our water and wastewater utilities. As our sights are fixated on the nation’s aging and failing water infrastructure, we have neglected to look internally at the costly and manual processes that desperately need improvement also.

The typical budget planning process for a utility is akin to a leaky water pipe; the wasted productivity is expected and tolerated. And, just like a leaky pipe runs the risk of becoming a big break, there is a risk of adverse financial performance if we neglect to streamline the process. So, why do we turn a blind eye to the inefficiencies of the typical planning process? It’s because most of us have a status-quo bias called loss aversion. We have a hard time making decisions that are in our long-term interests if they require any sacrifice in the short term. It is also a common belief that fixing this inefficient process requires a huge investment in money and effort to overhaul our enterprise financial systems and business intelligence tools. Like the fabled shoemakers, planners allocate budget for everyone else, but rarely reserve any budget for their own needs. Luckily, with the right tools and a good partnership, there are some easy solutions for our typical planning challenges.