Traditional calendar year budgeting has been the dominating management control system globally for decades. In recent years a process of change has started towards frameworks like forecasting, rolling forecasting or Beyond Budgeting.
Where as budgeting is retrospective in nature and typically considered obsolete a few months into the fiscal year the rolling forecasting is forward looking and focusing on optimization of the future business.
The optimization focuses on the operating model of the company and key drivers that defines the DNA of that business. Questions like “do we have right amount of resources to deliver the forecast” or “should we hire or fire?” etc. The rolling forecasting provides an ongoing prioritization of resources and thereby an optimization so that the company can have a continuous learning curve and integrate these improvements into the company. This should lead to better decisions and improve shareholder value. The traditional budgeting is typically a political process where gaming and power is implicitly on the agenda.
Face it - Rolling forecast cannot be supported by Excel
Acquire a software like Jedox and avoid the cumbersome manual processes in either Excel or the ERP system.
Think big but start small with success stories obtained within 2 months
Should the static budget be abolished after the implementation of rolling forecasting? Typically not because its such an incorporated management control process and incentives are normally build up on the yearly target (budgets)
For a recent article in the Wall Street Journal, “Companies’ Financial Planning Comes Up Short in the Coronavirus Era,” I was asked how FP&A professionals could have predicted both the pandemic occurring and the scope and scale of its impact.
Fill out our form and we will provide you with the information’s you ask for
Solutions that make sense
We have some of the most talented consultants in Europe, who have many years of experience in implementing budget and business intelligence solutions at both public and private companies.
Necessary cookies are absolutely essential for the website to function properly. This category only includes cookies that ensures basic functionalities and security features of the website. These cookies do not store any personal information.
Any cookies that may not be particularly necessary for the website to function and is used specifically to collect user personal data via analytics, ads, other embedded contents are termed as non-necessary cookies. It is mandatory to procure user consent prior to running these cookies on your website.