The Copenhagen FP&A Board took place on the 29th of October to debate the key factors for successful Rolling Forecast implementation.
Businesses exist in order to improve the well-being of others. One approach businesses use for achieving this goal is the concept of people/process/technology. In businesses the element of people is the responsibility of human resources; human resources is responsible for the acquisition, compensation, and teaching of people. How can human resources improve its ability to acquire, compensate, and teach people? An answer is financial planning, thinking about how businesses can accumulate wealth.
Today’s FP&A practitioners are highly trained professionals with a greater ability to see the big picture, analyse and interpret data, and build predictive models. They are also experts in harnessing the power of information technology. They are able to create detailed cost and revenue data bases which unlock patterns and trends in business behaviour, and to build sophisticated and responsive forecasting models. We do rolling forecasts because we know they are better, and because we can.
On 15 October 2019, I attended the 7th Stockholm FP&A Board, which was sponsored by OneStream Software and Michael Page. The topic of the evening was rolling forecast.
When I first came across the term driver based planning and forecasting I was confused. As an ex-investment banker having joined a Finance team the concept of drivers when talking about a forecast or plan was simply assumptions. Why was it not called just that? Assumptions! Investment bankers have been building models with assumptions ever since the first model was built and a corporate transaction was negotiated.
The purpose of your company’s administrative function is to support what your company sells. Support consists of departments like finance, human resources, and information technology; future articles will describe these departments in greater detail. The focus of this article is on administration as a whole.