The traditional budgeting culture is one of the top FP&A challenges right now. We covered this subject at FP&A Board meetings around the globe and two weeks ago were in Frankfurt to continue the global discussion.
- Beyond Budgeting: key definitions and principles.
- A case study from a thought leader and author of the books Beyond Budgeting in Practice (in Swedish) and Dynamic Management Strategy (forthcoming in English)
- Almatis Case Study
- Small groups discussion on Beyond Budgeting Philosophy. "Are we ready to abandon the budget and what does it require?"
- Conclusions and recommendations.
During the meeting, we had two interesting presentations:
- Knut Fahlén, Swedish thought leader, consultant at Ekan Management and author, shared his insights and case studies on BB from his latest book;
- Paolo Dalo, Group Controller at Almatis, presented a case study on how his company restructured the budgeting process with the help of modern Rolling Forecast (RF).
At the meeting, the Board members came to a conclusion — companies are not ready to abandon the budget but they can transform it in different ways:
- concentrate on key business drivers;
- create RF that is translated from top to bottom;
- do not mix RF process with performance evaluation process;
- RF process should be mathematically and analytically exercised;
- experiment with analytics and automate all the data sources and involve as many key stakeholders as you can;
- remember that the role of FP&A is to enhance the company's decision-making process — the traditional budgeting process cannot help with this.