The Question: How granular is too granular?
What's Going On: Our model accounts for tens of millions of dollars in IT spend and we're always asked to tie everything out to the literal penny. This takes weeks and weeks of man-hours to validate and make sure that we are always tied out to the GL and to forecast and to explain variances.
I feel our time would be better spent on more value-added tasks such as discussing trends and advising leaders on how to better use their budgets, but my team is constantly fighting fires over immaterial dollars.
What I'm Afraid Of: My team will get burnt out and we won't be able to sustain this for much longer.
To some, this may seem logical and to others it may sound ludicrous, but I’ve seen this many times. It really comes down to what your model is trying to do and the goals of your TBM program.
I’ll give two perspectives:
I’ve observed many TBM programs that have a “good enough” level of detail since the purpose of is to get to a level of cost transparency that helps drive decisions. As you noted, the tradeoff between materiality and effort has to be considered because hours spent chasing small dollars may not be the best use of time especially if the team is getting burnt out.
I’ve also worked in programs where the goal was to have a system that automates the cross charges from the TBM system directly to the general ledger. Given the role in the financial close process the system would be subject to regulatory controls, so accuracy was paramount. In this case the “down to the penny” level of detail was absolutely necessary.
Putting regulatory issues aside; stakeholders looking for that level of detail don’t trust the data. To break the cycle you will have to build a bridge that helps bring them along without that level of detail.
Compile a list of what decisions can “good enough” accuracy still make and a plan to test your hypothesis.
Where is the data good enough that doesn’t need to be touched by your team? What decisions can you make from just this data?
Are there tricky areas that are taking the most cycles? What happens if you deprioritize it?
If you tested a less rigorous process for quarter what would you do with the extra cycles?
Ultimately if there is no regulatory requirement driving the level of detail you should consider how you create trust with your stakeholders in a way that doesn’t cost hours of your teams time.
Hope that helps!
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