What does your forecasting cycle look like?
Rainer Ribback recently posted 5 reasons that BPM projects fail….
For years, the focus of business process management was to manage a collection of related, structured activities or tasks that produce a specific service or product. The focus was all internal.
The budgeting process for banks is quite different from most industries. The focus begins with the Balance Sheet, and the reflection of the instruments already generating revenue and cash flows, at various rates and maturity dates. This then serves as the basis of the budget going forward as new volumes are forecasted.
The Budgeting process for Banks is quite different from most industries. The focus begins with the Balance Sheet, and the reflection of the instruments already generating revenue and cash flows, at various rates and maturity dates. This then serves as the basis of the budget going forward as new volumes are forecasted.
Moving away from the annual budget process and into one that is more frequent is a core topic in the recent eBook from CFO.com. The rationale behind it - business changes so frequently that the annualized budget gets out of date pretty quickly. The fact that employees’ performance, and often compensation, is based on this annual plan makes things worse as the battle for the budget usually ends up with a much more conservative, thus achievable, plan. This pretty much makes it out of date out of the gate.
What to do?
Analytics gives us not just the ability but the imperative to separate our planning activities into two distinct segments – detailed planning that leads to budgets in support of execution, and high-level, analytic-enabled business/scenario planning.
The good news for CIOs — they still control about 60 percent of the average IT budget in a corporation.
The bad news — they think they control 80 percent, according to a survey of member-based advisory firm CEB, which surveyed 165 organizations representing more than £29 billion in IT spending in Europe and the US.
I’m always amazed at how tenuous the link is between strategic goals and budgets. Most senior managers will claim that the budget process is there to help the organisation implement strategy, and yet when you look at the submission sheets budget holders are asked to complete, there is no link. Sure, the revenues and costs when accumulated with other departments may equate to a strategic target, but budgeting is much more than this. After all we can get a monkey to fill in those sheets and even get them approved by ensuring they line up with targets set by senior managers. But we all know that the numbers themselves are meaningless unless they have been placed in context of organisational activities.
Starting your own business is both an exciting and nerve-racking adventure, I’ve been there. Just a few weeks ago I was fortunate to meet with a bunch of people at the cusp of starting their own businesses.
At the event I ran by PushStart, I was able to share my experiences and the virtues of accounting software with these young entrepreneurs.
It’s clear that not everyone who starts a business has the same level of accounting knowledge. For some the idea of managing numbers is overwhelming, while for others they may have studied accounting at university. But I truly don’t think it matters. New online accounting solutions are making managing your own finances simpler, but even traditional desktop type products are really quite easy once you’ve had some training. In this article I’ll cover off a few of the things I shared at the PushStart event.