"The Budget Problem in a Crisis Climate"

Although budgets are always a problem this is even more in a crisis climate due to ongoing cuts and restrictions. Companies can nevertheless fast and easily learn how to to improve their budgets but their key people responsible for these budgets often are not interested. Why?

Five years now selling to big companies has not only give essential understanding how professionals deal with macroeconomic country intelligence data but also how they allocate funding. Well, they mostly don´t!

To understand this it is important to differentiate all what is related to core business and non core business. This hardly happens, so all is done with the same budget in any layer of the company.

Now mentioning for each sector, product or service these differences is too comprehensive for this posting and therefore this diligence can is focused on industrial sector specific intelligence and macroeconomic intelligence (our core business).

By referring to the challenging business climate we still live in, also makes it more simple explaining the budget differences for core business intelligence and macro. We all know what happened and we all know no one could avoid it or see it coming.

You can of course replace macro with your own product or service. The result is the same, as long as your proposal contributes to budget problems.

While avoiding the budget question is easy by not mentioning it, many potential buyers reply too soon their budgets are restricted, cut or funding is not available (till the next fiscal year).

Some do it better by replying their data bases or specific product needs are under revision or they are streamlining the business.

A logical commercial response would be "even better for this opportunity" but when you finally reached the right person this response is regrettably a dead end.

Only a few keep on listening because what you propose next is what they really should do; looking for smarter spending options or better tools for this climate.

By simply accepting "the budget is not available" nothing will change;

The internal problem will continue, involved personnel is frustrated, have to work harder, the labor costs increase, the productivity drops and worst of all, in the case of macro, the corporate risks of monitoring economic developments increase.

What are realistic short term options for any company dealing with budget problems?

1. Divide core and non core first.

Core is often the priority but in times no one can sell you reliable analyzes you do not have to spend the same on your core intelligence. Better is to use your own corporate network (all stakeholders) to help you understand your market developments and trends. It is less expensive and more efficient.

In the case of macro, which is non core, this opens the door for better tools. No longer relying on the same resource of industrial data but giving employees the chance to gain time, give the company the chance to reduce costs and give risks chances to be better monitored.

Advantages; the budget cut can be limited to what really is necessary for core market or business intelligence. When excluding macro every hour formerly used for macro search can now be spend on core. Labor costs will be justified for only core while better macro data helps professionals understand better external risks to their markets (no more out of date internet info).

Disadvantage; it requires corporate changes and people mostly do not like changes. Streamlining has its limitations. This is also seen at Six Sigma. Project leaders or other key people can disagree, cancel or delay new efficiency for personal reasons. On top, in regards to macro, many professionals are comfortable with wrong estimates from a single but well known source. They prefer to blame them then own colleagues.

Conclusion:

Many will claim not to be able to move in any direction which makes stimulating business decision makers in improving their budgets is a non-profit suggestion.

But when they do not cooperate, are open minded or willing to make an effort by forcing an opening there is only a loss. Not looking for improvements to help cutting spending is the opposite of the corporate strategy.

Even calculating their spending increases by 30, 60 or even 90% does not interest them. Despite affecting business, financial or strategic planning in the case of macro does not change their minds either.

A budget is a budget. In a crisis climate we cut it and if we are fortunate we have some left overs for your product or services. Is that all what is in their powers?

When that is the message after the worst downtrend the last hundred years in business, with all wrong analyzes and forecasts from research providers and economists, ongoing uncertainties in many sectors and more consequences like lay-offs, the following two steps are really necessary:

1. Decision makers / business leaders should consider better what affects their corporate results or well being during a recovery. Only looking at the past, what comes from above (higher management) or protecting the own interest (no changes, save zone mentality) will not make any difference in terms of cost savings.

2. When professionals deal with industrial and economic intelligence they should consider a budget split. Otherwise nothing will improve or change in their benefits.

When this is taken into account any supplier of a product or service should not have to worry about budget restrictions from the buyer but only be worried if a competitor can make a better offer in terms of quality, price and synergies.

When this is true the business leaders on the buy side have decided to adjust and adapt to a business climate that is less favorite but they are certainly better prepared for any upcoming turnaround.