Create lean, effective planning and budgeting processes
Solve the cultural challenges of developing an adaptive enterprise
Implement workable alternatives to the annual budget De-couple incentives from annual fixed targets
De-couple incentives from annual fixed targets
For the first time, this report provides a comprehensive guide to the practical options, a migration plan and benchmarks for improvements. It shows how to undertake goal-setting, planning, resource allocation and performance-linked compensation using more appropriate frameworks and tools. Alternative tools and techniques are only part of the requirement. Find out how to bring about the all-important cultural challenges in behaviour and working practices that make next-generation planning and budgeting possible.
Dissatisfaction with the annual budget is driving companies to a tipping point. It is not just the time, effort and cost eaten up by conventional budgeting. Once delivered, it undermines an organisation’s ability to adapt and respond to changing operating conditions and market forces. And when linked to rewards, the annual budget often distorts decision-making and management behaviour.
Designed for a business era that has long passed, the annual budget is now a constraint and liability.
Some organisations - private and public - have developed innovative solutions, even abandoning the budget altogether. Their objectives: to create more responsive and flexible forms of planning, forecasting and performance management. Their reward: better business control and greater responsiveness to a roller-coaster business environment. Plus dramatically improved business results.
The Report In Brief
Why next-generation planning and budgeting processes are key to the adaptive enterprise
Step-by-step advice on how to migrate from traditional budgeting
Inside advice from pioneers of new approaches to planning and budgeting
Detailed assessment of alternative models and techniques
A framework for re-engineering planning and budgeting
Armed with this report, you can be prepared for the journey ahead: discover how others have solved the problems of moving from the old to the new order. Business Intelligence’s research distils the experience of leading companies to provide you with the benefit of the insights they have gained. In addition, there’s advice from experts who have helped organisations to implement these new ways of working.
How the innovators tackled their projects, the lessons they learnt and the new processes and practices they adopted are all mapped out in detail here to provide you with a comprehensive guide to transforming planning and budgeting. The report gives you the inside stories of companies that have transformed planning and budgeting. Case studies illustrate the benefits to be gained:
Boston Scientific saw a dramatic 62 per cent rise in global sales with greater predictability in performance after the introduction of a 12-month rolling plan updated quarterly.
Herman Miller attributes its compound growth rate of 14.6 per cent since 1996 largely to its focus on Economic Value Added, EVA, which also involved a wholesale change to the role of the budget.
Henkel successfully cut its planning costs from €4.75 million to €2.9 million in 2005, and reduced its FTE requirement from 89 to 55 after re-engineering its processes.
UBS’s search for a superior way of implementing strategy led to the abandonment of its budget and the introduction of quarterly re-forecasting. Improved resource allocation, sharper decision making and reduced waste are three of the benefits the bank has chalked up.
These - and other companies covered in detail in this Report - have benefited from achieving a tighter grip on their businesses and better allocation of scarce resources. All claim bonuses from freeing up management time to concentrate on the business issues that really matter.
The dominant motivation for companies in changing their processes has been inspired by the ambition of raising their performance. It is not so much the desire to eradicate the inefficiencies of traditional budgeting that has driven them to change but the conviction that there are real opportunities to become more responsive and adaptive through innovative approaches to planning and budgeting.
Additional Information
Find the answers to questions such as:
What are the kinds of benefits that can realistically be expected from reengineering the budget?
Is it best to take an evolutionary or radical approach to improving planning and budgeting?
What is the benchmark for effective planning and budgeting?
Who should lead planning and budgeting projects?
What alternative models are there to replace the annual budget?
Does control go out of the window when you abandon the budget altogether?
How can rewards be better tied to performance to avoid distorting behaviour?
What does beyond budgeting really mean?
What is the best way to ensure that planning and budgeting is aligned to strategic goals?
What are the business goals that should frame nextgeneration planning and budgeting?
How do you ensure you balance long- and short-term goals?
What are the dangers of shifting from budget-based incentives to other reward models?
What are the cultural pitfalls? Are there reliable ways of avoiding them?
How long does it take to overhaul planning and budgeting?
Is there a trade off between faster, leaner planning cycles and decision quality?
What role should senior managers play in the reengineering process?
How do you gain company-wide buy-in to reengineered planning and budgeting?
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