FP&A Trends Digest: Issue #74
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Issue #74 - 22 October 2022
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Dear colleagues,
"A budget is more than just a series of numbers on a page; it is an embodiment of our values", the ex-president of the USA, Barack Obama.
We are on the verge of a new budgeting season, so I would like to share crucial takeaways regarding going through this challenge with flying colours.
It is always a hot question for finance practitioners how they can replace a bit outdated traditional budgeting process with something more flexible and dynamic for the ever-changing environment.
Despite many outward challenges, there are many methods and techniques for your budgeting and planning to remain agile, such as Beyond Budgeting and even Rolling Forecasts, as well as more sophisticated Zero-Based Budgeting / Zero-Based FP&A.
In this issue, we are sharing an insightful CPM trend report to explore the state of people, processes, and tech priorities in FP&A. Also, you can check the article on adjusting targets for budgeting, the pros and cons of ageing rolling forecasts, my article about the ten steps for achieving ZB FP&A, and a popular topic of Beyond Budget implementation. You are welcome to explore the ETEX company's case study on how they abandon traditional budget in favour of Beyond Budgeting.
I hope this newsletter will help you understand and embody your values, so they aren't plain numbers on the page.
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Based on a survey of 1,320 finance and business leaders, this report explores the state of people, processes, and tech priorities in finance. Download the report to learn how your peers are preparing for the future.
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By Bjarte Bogsnes
Many will still argue that target setting works. “What gets measured gets done”. Yes, targets do work. That is the problem. Given the circumstances, managers striving to hit their targets cannot guarantee that this was their best possible performance. This article investigates how to adjust your targets during the budgeting process.
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By Lawrence Serven
When first introduced 20 years ago, the concept of Rolling Forecasts seemed very promising. But while some organisations have seen success, others have yielded little tangible benefit. So, where do we go from here? How do we take the best principles of Rolling Forecast to drive agility and performance? Find out the answers in this article.
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By Larysa Melnychuk
ZBB is not just a cost-cutting tool. It is a broader concept that can be applied to more than just cost bases. A blend of Driver-Based and Zero-Based techniques can help transform the entire FP&A process. That is why we call it Zero-Based FP&A (ZB FP&A). In this article, I share a framework of the top 10 practical steps to help you with a successful ZB FP&A implementation.
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By Steve Morlidge
Beyond Budgeting isn't a magic pill that cures all ills, nor is it a prescription for how you should run your business. It is a set of guiding principles that helps you build an effective and efficient control system tailored to the needs of your own business in place of the 'one size fits all' approach of traditional budgeting. Check this article to learn tips about introducing some Beyond Budgeting ideas into your business.
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By Guillaume Verbiest
Budgeting is no longer a necessary tool for successful running. ETEX, a leading industrial group in Europe, has shown how it can operate without budgets. They developed a new strategy and set adequate expectations, the two building blocks to achieve it. In this video, you can learn more about their Beyond Budgeting journey from Head of Finance Transformation and Performance Management of ETEX.
For more resources on Planning and Budgeting, please click here.
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FP&A Trends Digital Events
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FP&A Trends digital events are vendor-agnostic and complimentary. If you are not able to join the live session, you can register to receive the recording later.
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Everyone in FP&A agrees that agile planning and forecasting are essential in an environment of great uncertainty. FP&A agility is the ability to reforecast on demand. But how can we implement it? Join us for this webinar, where we will look at agility through the lens of the continuous planning and forecasting process. The panel of senior practitioners and thought leaders will share with us their experiences and practical insights.
Zero-Based Budgeting (ZBB) allows us to take a fresh look at routine budgeting processes and proves to be a valuable tool for the whole FP&A team. It enables us to understand key business drivers, encourages a culture of business partnering and value creation, and supports agile FP&A. Register for this webinar to learn the latest trends and developments to implement ZBB successfully.
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