New Flexible Budget Allocation capability in SPM - Detailed how to guide

[Vinay3]

The August 2024 release of Strategic Planning and the Project Workspace applications introduces a powerful new feature that enables financial budget allocation for planning items within Strategic Planning or projects in the New Project Workspace. This enhancement allows for a more granular approach to managing budgets by supporting detailed breakdowns by expense type or cost type, facilitating improved budget planning and control.

Allocate budget by Expense type:

Allocate budget by cost type:

Note: The New Flexible Budget Allocation is not yet compatible with Investment Funding. Please consider this while making a decision to adopt this capability.

How to Configure the Flexible Budget Allocation:

1. Enable Budget Allocation Property
This property is enabled by default for new customers using the financial module in the Next Experience interface. Existing customers need to update the property to start using the new budget allocation capability.
Required Role: Admin
Steps To Enable:
- Navigate to All > System Properties > Properties.
- Use the filter on the Name column to find the ‘sn_invst_pln.enable_budget_allocation_v2’ property.
- Set the Value field to `True` and select Update.

2. Configure Budget Attribute at Instance Level
This setting allows you to define the budget by either expense type or cost type for planning purposes.
Required Role: Admin
Steps to Configure:
- Navigate to All > System Properties > Properties.
- Filter by Name to find the `sn_invest_pln.budget_allocation_attribute` property.
- Set the Value to one of the following:
- ‘cost_type’ – Groups financials by cost categories (e.g., Hardware Opex, External Labor Capex).
- ‘expense_type – Groups financials by types such as Capex and Opex.
- Click Update.

How to Use the Flexible Budget Allocation Feature

1. Approve Budgets Top Down or Bottom Up:
Portfolio managers can approve budgets for demands, projects and epics at various levels monthly, quarterly, or yearly. This helps users to approve budget traditionally by years or to do lean budgeting by a shorter time frame.

In the budget allocation view, managers can use the "Copy cost as budget" option from the cell context menu on the budget header to approve budget bottom-up based on the forecasted costs.

Short demos:

How to approved budget by Expense Type : https://youtu.be/fl5iJWTalKw

How to approved budget to a Demand: https://youtu.be/Uzx0kC421PY

How to approve budget by Cost Type: https://youtu.be/TMmMHU93KgU

2. Compare Latest Costs to Approved Budgets:
Project managers can enable the Budget vs Cost toggle to compare latest forecasted costs against the approved budget. This feature allows for real-time adjustments where actual expenses exceed the planned budget.
Managers can view comparisons by Capex/Opex or by Cost Types and at various timescales (monthly, quarterly, yearly).

Short demo:

How to compare latest costs to the approved budget: https://youtu.be/dBx32VKB1jc

3. Migrate Existing Budgets:
The feature allows migration of existing budgets from the Classic UI to the new Next Experience interface allowing customers to view the budget data from past or on-going projects in the new experience. The migration can be done using a scheduled job named ‘Migrate budget for active demands and projects’.

Note: This is a mandatory step for existing customers to move the budget data to new financials experience so that their users can leverage the new 'budget vs cost' or 'budget allocation' view on the project workspace and the Strategic planning workspace.

By following these steps, you can easily set up and use the new budget allocation feature to improve financial planning and control within your organization.

Options for existing customers to newly configure 'cost type' as their budget attribute:

If you are an organization who has been using SPM projects and allocating budget by expense type in the past and wants to newly shift to allocating budget by cost type, you could consider the following options:

1. Write a custom migration script to populate budget by cost type for existing projects by splitting the budget allocated on expense type proportional to the cost estimates by cost type. 

2. Use the new project workspace financials for new projects only from the next planning cycle. For viewing the budget data on past projects, continue using the classic experience.

Additional notes:

Checkout this playlist for short How-to videos to use the new Financial Planning capability: https://www.youtube.com/playlist?list=PLkGSnjw5y2U6-KDSrknFglF3iiu_WYKva

[Louis Savalli]

Thanks for this info, I'm not seeing the budget vs cost toggle.  Is there a property or step I need to take to turn it on?  I see the budget allocation toggle just fine.

[Vinay3]

@Louis Savalli Only users who do not have portfolio manager rights and has project manager rights see the 'budget vs cost' toggle as its a similar view without the editing access to budget.

If for a project you are not seeing either the 'budget allocation' or 'budget vs cost' toggles in spite of having the required roles, then it might be an existing project which is not migrated to the new budget allocation model. Please use the scheduled job - 'Migrate budget for active demands and projects' or 'Migrate budget' link on the classic project details page to migrate such projects to the new data model.

Please let me know if that answered your question or if you need any additional info.

[Louis Savalli]

Thanks @Vinay3 , I'm seeing "budget allocation", and I'm impersonating a project manager, and I've run the migration, but I can't seem to find the budget vs cost toggle.

[Vinay3]

@Louis Savalli Can you try with a new user with just it_project_manager role. You should be seeing a 'budget vs cost' instead of the 'budget allocation' like this -

[Louis Savalli]

Thanks @Vinay3, when the user has just it_project_manager, it works.  But a user with, say it_project_manager and it_portfolio_manager - it doesn't work.  

[Vinay3]

@Louis Savalli A user with it_portfolio_manager, has access to edit the budget and allocate the budget. Hence, the toggle will be named as 'budget allocation'. A user with it_project_manager only has read only access to compare the cost with budget. Hence, the toggle will be named as 'budget vs cost'

[Louis Savalli]

@Vinay3, yes, thanks, I didn't realize that both toggles showed the same information.  Makes sense now.

[danieltietze]

The budget attribute is not called "budget_allocation_attribute" - it is "sn_invest_pln.budget_allocation_attribute".

[DavidB-ADT]

@Vinay3  Thanks for the useful article and links!

I've looked through and seen how we now do budgeting at Project/Demand level in the Next Experience, but what's not clear is what role Investment Funding still plays, if any? From our testing, Investment Funding still cascades budgets down to a project in the Project Details screen (budget_cost), but not to the financials. If you then do the flexible budgeting above, it will double the budget number on the Project Details screen.

It appears that Investment Funding isn't compatible with Next Experience, so our question is: "How we can do Top-down/Bottom-up funding/budgets at the Portfolio and/or Business Unit levels in the Next Experience?"

Is this a forth-coming feature, or is there a way to do this in SPW that we haven't figured out yet?

Any info would be appreciated.

[Vinay3]

Hi @DavidB-ADT ,

Yes. The Investment Funding isn't compatible with Next Experience as of now. 

Top-down/Bottom-up funding from SPW is planned as a future enhancement enabling portfolio users to do bottom-up/top down budget allocation to planning items. It is currently being targeted to be released in 2025 H1 (safe harbor: subject to change based on circumstances).

[TJ23]

To be honest, with so many changes going on that do not seem to be in sync, it makes it incredibly challenging to demo this product to customers. 

Please SPM team, do better with your release planning for the product. It feels like us SPM implementers need to create an emotional support group with how this product is being developed. It is getting really ridiculous.

[Carina Hatfield]

Hi TJ23,

You are correct.  We do need to do better and are trying to figure it out.  While we have received positive feedback on the new experiences, like you, people are struggling to keep up and find what they need.  Our PM's are creating a ton of content but it doesn't seem to be enabling our customers the way we want.  Would you be willing to meet with us to talk through what kind of content you are looking for and how we can help?  If so, please send me a message at carina.hatfield@servicenow.com so that I or someone in the BU can learn more about your experience.  

Thank you

[Louis Savalli]

Hi @Carina Hatfield, I can provide some insight on this issue too.  I'm also struggling to demo and explain to clients what the tools are capable of given the recent sweeping change in SPM.  I spend a lot of my time researching "is new functionality X compatible with legacy functionality Y", like investment funding and next experience.  Or Resource Assignments and the legacy scenario planner (which I believe are not compatible).  Or Resource Assignments and the legacy resource reports (which are compatible).  Or Strategic Spend Tracking and the Goal Framework in SPW (same goals?  same strategic priorities?  Looks like no).  Every new piece of functionality requires this research.

Otherwise the new tools are a huge improvement and despite the challenges, I'm encouraging clients to use them asap.  

[DavidB-ADT]

@Carina Hatfield We did a big deployment of SPM last year (go-live July 2024), so I'm happy to provide some insight, too. One of the big things I wanted to use was Investment Funding to centrally manage/track our Capital Budgets, but we only figured out while trying to set up our 2025 budgets and cascade them down to projects that it wasn't compatible with New Experience. It would be useful to at least have a banner on the Docs pages to say that it's not compatible with PW, SPW yet. I've spent weeks planning and training my team on it only to find out it's moot.

I have the same concerns with Demand Management right now. My Demand team is just starting to use Classic experience, but we have no idea when to switch over to SPW instead for the end-to-end process. My biggest  head-scratcher right now is the relationship between Resource Plans/Allocations in Demands (used to plan resources and estimate costs), and converting it to a project and using Resource Assignments for specific assignments in Project Workspace. Will the demand resource plans screw up my project financials? Do we need to remove them before converting to a project? Can we do Resource Assignments in Demands yet, instead of Resource Plans/Allocations. There's little documentation/guidance to help with these questions right now - we have to try and figure it out ourselves.

Same applies to the scoring mechanisms - Classic has it's scoring mechanism, while SPW has the 4 others (Moscow, RICE, Value-Effort, WSJF). No idea on the compatibility/dependencies between these items right now.

[Carlo Gattino]

There is no documentation around the "Budget" widget showed in the financial tab, like where that number comes from? I have also tried to play around it in demo instance but I don't manage to see the logic behind it. 

[Vinay3]

@Carlo Gattino This article talks about how "budget" can be allocated to a project from the financials page by a portfolio manager. The budget widget shows the total budget allocated to the project from the financials screen. If you are looking for the table name in which the budget data is stored, it is 'sn_invst_pln_invst_budget'.

[Carlo Gattino]

@Vinay3 Thanks for your response, it was very helpful. However, I now have a doubt, I know there is another table for budget, what's the difference between fm_budget and sn_invst_pln_invst_budget table?

[TJ23]

@DavidB-ADT 

What release are you on? I can see in my PDI (Xanadu) that there is the Resource Assignments related list and not resource plans. If you are still seeing resource plans, you should configure the form to show Resource Assignments instead. 

To your other comment about the different scoring mechanisms between SPW and Demand. I have seriously struggled with that. What my last client ended up doing was ditch the SPW scoring. We added custom fields on the alignment demand table to bring in those scores and hid the OOTB ones in the SPW.. This is what they are using now as a natural continuation of the work they have done to arrive at the demand score. 

For my current client, I am recommending using the demand scoring as an initial way to select demands brought forward from each product line... after this, when they are being looked at by the Execs collectively (at a broader portfolio level), they can use the SPW scoring for that. 

Demand scoring = for demands only

SPW Scoring = unified scoring which looks at the bigger picture across multiple planning item types. 

I hope that makes sense. If you have more questions about this, feel free to connect with me on contact@tojusmith.com

[TJ23]

@Carina Hatfield I will definitely be in touch. Thanks

[VinothiniA]

@Vinay3  Thanks for this detailed info which is very useful to understand this new feature. One thing which I am not clear is what role does Investment funding plays in flexible budget allocation?

If Investment funding is not compatible in next experience , what are the impact if we enable the flexible budget allocation property?

I am mainly working on Project Workspace .So, if you have provide me the details based on this it would be really helpful.

Thanks,

[Vinay3]

@VinothiniA If you are using Investment Funding for allocating budget to projects and if its a hard requirement for your organization, the new budget allocation is not compatible with it yet.

In May 2025 store release, we are planning to release scenario planning with financials as part of the strategic planning workspace. This will enable users to do budget allocation to multiple demands, projects, epics similar to investment funding. If this satisfies your requirement, you can switch from using Investment Funding to the new Portfolio financials in SPW and use the new flexible budget allocation.

[Carina Hatfield]

@Louis Savalli  Thank you for the additional information.  

We are aware of some of these gaps.  Investment funding is targeted for SPW in May.  Their are some enhancements we are making to strategic plans and goals were goals are associated with strategic priorities.  We are targeting a new strategic planning experience November.  

@DavidB-ADT  -  You can do resource assignments in demands.  When you convert it to a project, the resource assignments should be there on the project.  Though, I am sharing your post with the product manager in this area to get a more detailed response as I don't want to state anything incorrectly.  I'll either return with another reply or have him come do it.  I want to ensure I understand it myself.  

We are aware of many problems with demands and SPW.  We are starting to prepare a plan and design for addressing the issues between SPW and Demands.  If you would like to speak more in depth with the product manager, I'm happy to connect you.  The more our product managers talk with customers and those implementing to numerous customers the better for the product.  

As we release functionality, we should think more deeply about the relationship our new experiences have on legacy experiences beyond the ones we are replacing.  I like your documentation idea!  I'm going to discuss all of this with our teams.

We are also in the process of creating lots of content around resource assignments.  I will have them add conversion of demands to the list if it isn't already.

[Carina Hatfield]

I've confirmed that demands create resource assignments at the project header level when converted.  If you want to discuss other use cases and possible improvements, we can connect you with the PM that is going to be planning our improvement of demands.  

@Chris Cannella 

[VinothiniA]

Hi,

Can anyone please advise how Total budget value is created in Project workspace Budget allocation ?

In PDI , I am able to see the count as 310(sum of Capex and Opex value) but in our instance it is showing as 9.7 as in screenshot. In Project record form, Budget cost is showing correctly as 310 , seeing difference only in Project Workspace.