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Transcript of Malcolm ACCA
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8/14/2019 Malcolm ACCA
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Oracle Thought Leaders Series September 2008
Best Practices in Budgetingand Forecasting
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Oracle Thought Leaders Series September 2008
The planning process is regarded by many finance and operationalexecutives as not delivering value. Typical concerns include:
Time consuming and resource intensive. The annual budget is out of date before it is complete.
The relevance of fixed single value budgets.
Fragmented processes with a heavy reliance on spreadsheets, manual
intervention and e-mail . Insufficient time to analyse and understand the results.
Background
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Oracle Thought Leaders Series September 2008
Planning lags ERP in process improvements.
Impro
vemen
t
Time
ERP
Planning
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Oracle Thought Leaders Series September 2008
What are the contributing factors?
ERP Planning
Re-engineered business processes
Board/executive sponsorship.
Business driven
Substantial investment
IT supported and enabled
Single vendor not best of breed
Enterprise and scalable
Continuous improvement
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Oracle Thought Leaders Series September 2008
Import / Export
The planning landscape is fragmented.
ERP
Reporting
Planning
Consolidation
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Oracle Thought Leaders Series September 2008
Drivers for improvement.
Finance executives expect forecasts:
To have greater accuracy and be more evidenced based.
Be more timely.
The need for agility in responding to change in markets and the economicenvironment.
Headcount, talent and cost pressures
Technology improvements
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Oracle Thought Leaders Series September 2008
Practices which will improve the planning process.
Develop rolling forecasts extending beyond the current financial year.
Develop driver based planning methodologies which will allow linemanagers to plan around their key metrics and activities.
Allow for different scenarios to be modeled, stored and reported.
De-emphasise the annual budget as the main vehicle for planning andcontrol.
Drive collaboration and linkage between functional areas:
Sales & operations planning
Projects and new initiatives
Avoid false precision and too much detail.
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Oracle Thought Leaders Series September 2008
Technology which works with users is a key enabler.
Business users need technology with is..
Owned and managed by them with little IT dependence.
Familiar and easy to use interface using MS Office and WEB browsers.
Workflow during plan preparation, submission and review processes. Tracking status during the planning cycle.
Flexible and intuitive reporting.
Integrates with wider performance management initiatives.
But the enterprise and IT needs
A stable and scalable platform which complies with the overall technologystrategy.
Solutions to be well though out, architected and implemented.
Proper development and change controls in place.
Governance across stakeholders.
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Oracle Thought Leaders Series September 2008
Example of planning framework using BI tools
ERP
CRM
MES
ForecastConsolidateReport
Analyse
Financial Management
ScorecardsDashboards
EDW
Browser
Excel
Transactions Analysis BusinessProcess
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Oracle Thought Leaders Series September 2008
Driver based planning can be flexible and powerful.
Driver Usage RateX
Variable ConsumptionQuantity
+ Fixed ConsumptionQuantity
Total Quantity Unit PriceX X Inflation
Result
Input or stored values Calculated results
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Oracle Thought Leaders Series September 2008
Increase focus and commitment to improved the planningprocess.
ERP Planning
Re-engineered business processes Board/executive sponsorship. Business driven
Substantial investment IT supported and enabled Single vendor not best of breed Enterprise and scalable Continuous improvement
Stepped incremental approach
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Significant impovements should be realised.
Improvemen
t
Time
ERP
Planning
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Oracle Thought Leaders Series September 2008
References
Gartner Research Extend budgeting and planning projects beyondfinance to maximize benefits.
Gartner Research Best practices in implementing CPM budgeting,
planning and forecasting.
The Hackett Group Aligning forecasting practices with market dynamics
The Sonax Group Best practices in planning and performancemanagement: from data to decisions.
CFO Research Services Rolling forecasts begin to emerge as a newstandard.
CFO Research Service When do companies outgrow theirspreadsheets.