On November 5th 2019 the sixth meeting of the Brussels FP&A Board, launched in November 2016, gathered 40 financial professionals from companies such as Anheuser-Busch InBev, Barco, Bekaert, Puratos, UCB, to name but a few.
The idea of a budget is so core to financial wisdom that it’s one of the first lessons we learnt from our parents for keeping our finances (and lives) on track. Annual Budgeting exercises have been the norm in almost all companies, big and small, across the world for decades. However, in recent years, there has been a lot of news about companies, some very prominent headline-grabbing ones, doing away with their annual budgets and moving to a monthly rolling forecast-based system.
Bjarte Bogsnes, Senior Advisor Performance Framework at Equinor (formerly Statoil) and Chairman Beyond Budgeting Roundtable, shares how Statoil has embraced the Beyond Budgeting principles to develop an “Ambition to Action Model”.
Although Beyond Budgeting is about so much more than just budgets, our name tends to draw people, at least initially, towards the budget word. Once there, cost management often pops up as the number one issue, for obvious reasons. How can we manage cost without a budget?
Increasingly, managers are now looking to change the corporate planning process and replace the traditional annual budget with rolling forecasts, 12, 13 or 15 months ahead. What is the reason for this development?
Traditional budgeting has for a long time been criticized for encouraging counterproductive behaviour, hindering growth and wasting time on useless exercises. In recent years, the Beyond Budgeting methodology has gained ground as an alternative.