O'Reilly logo

Stay ahead with the world's most comprehensive technology and business learning platform.

With Safari, you learn the way you learn best. Get unlimited access to videos, live online training, learning paths, books, tutorials, and more.

Start Free Trial

No credit card required

Budgeting, Forecasting and Planning In Uncertain Times

Book Description

Budgeting, planning and forecasting are critical management tasks that not only impact the future success of an organization, but can threaten its very survival if done badly.

Yet in spite of their importance, the speed and complexity of today’s business environment has caused a rapid decrease in the planning time horizon. As a consequence the traditional planning processes have become unsuitable for most organization’s needs.

In this book readers will find new, original insights, including:

  • 7 planning models that every organization needs to plan and manage performance
  • 6 ways in which performance can be viewed
  • A planning framework based on best management practices that can cope with an unpredictable business environment
  • The application of technology to planning and latest developments in systems
  • Results of the survey conducted for the book on the state of planning in organizations

Table of Contents

  1. Cover Page
  2. Title Page
  3. Copyright Page
  4. Acknowledgements
  5. Contents
  6. Introduction
  7. Section 1: Background to the Planning Framework
    1. Chapter 1: Planning Fundamentals
      1. What is Planning?
      2. Components of Planning
      3. Planning in Today's Business Environment
        1. The Increasing Speed of Business and Globalisation
        2. The Increasing Complexity of Business
        3. The Decreasing Planning Time Horizon
      4. Planning Challenges
        1. Dissatisfaction With the Planning Process
        2. Issues With the Planning Culture
        3. Need for a Holistic Approach
        4. Need for Better Planning Technologies
      5. Planning Principles
        1. Principle 1: Planning Connects Inputs and Outputs and is Therefore Directly Related to Organisational Activities
        2. Principle 2: Planning is About Maintaining a Shared Understanding of the Economics of a Business
        3. Principle 3: Planning is About Shifting Focus From the Past and Onto the Future
        4. Principle 4: Planning is About Aligning Budgets With Strategy to Achieve Corporate Objectives
        5. Principle 5: Planning is a Continuous Process
        6. Principle 6: Planning is a Learning Process
      6. Objectives of the Planning Framework
    2. Chapter 2: Planning Methods and Methodologies
      1. Planning: Who, What, When, and How
        1. Planning Within a Sole Trader
        2. Planning as a Small Manufacturer
        3. Planning as a Listed Company
        4. Planning as an International Group
      2. The Rise of Management Frameworks and Methodologies
      3. Popular Management Methodologies
        1. Budgetary Control
        2. Quality Management Movement
        3. Lean Management
        4. Balanced Scorecard
        5. Beyond Budgeting
      4. Planning and Success
      5. Planning Process Maturity
        1. Planning Objectives
        2. Planning and Forecasting Maturity Levels
        3. Basic Planning
        4. Financial Integration
        5. Partial Integration
        6. Matrix Planning
        7. Dynamic Planning
    3. Chapter 3: Planning Technologies
      1. Supporting the Decision-Making Process
      2. Planning Technologies: The Spread Sheet
        1. Two or Three Dimensional
        2. Cell Meaning
        3. Limited Business View
        4. Single User
        5. Lack of Workflow Capabilities
      3. Planning Technologies: Multi-Dimensional Databases
        1. Multi-Dimensional
        2. Business Hierarchies
        3. Name-Based Rules
        4. Multi-User, Role-Based Security
        5. Unlimited Size
        6. Financial Intelligence
        7. Spread Sheet Access
      4. Multi-Dimensional System Issues
        1. Comprehension
        2. Complexity
        3. Data Uniformity
        4. Effort and Price
      5. Modelling Tools
  8. Section 2: Business Planning Framework
    1. Chapter 4: Business Planning Framework
      1. Logical Overview of the Framework
      2. Framework Components
        1. Operating Activity Model (OAM)
        2. Cash Funding Model (CFM)
        3. Detailed History Models (DHM)
        4. Target Setting Model (TSM)
        5. Detailed Forecasting Model (DFM)
        6. Optimise Resources Model (ORM)
        7. Performance Measures Model (PMM)
        8. Strategy Improvement Model (SIM)
        9. Management Processes
        10. Knowledge
      3. Reporting From the Planning Framework
      4. Case Study Overview
        1. About the Case Study Organisation
        2. Company Structure
        3. Company Strategy
        4. Versions and Other Information
    2. Chapter 5: Operational Activity Model
      1. Overview
        1. Model Structure
        2. Measurement Types and Relationships
        3. Step 1: Define High-Level Objectives
        4. Step 2: Define Core Business Processes and Assumptions
        5. Step 3: Identify Core Business Process Activities
        6. Step 4: Identify Support Activity Measures
        7. Step 5: Define Profit and Loss and Other Financial Measures
      2. Putting the Model Together
        1. Measures and Attributes
        2. Model Dimensions
        3. Model Rules
      3. Reporting From the OAM
        1. Departmental Outcomes, Activity, and Resources
        2. Outcome Versus Activity
        3. Outcome Versus Assumptions and Resources
    3. Chapter 6: Cash Funding Model
      1. Model Purpose
      2. Defining the Model
        1. Model Content
        2. Additional Data Requirements Within the OAM
        3. Identifying Cash Payment Profiles Within the OAM
        4. Defining Payment Profiles Within the CFM
        5. Other Cash Measures and Rules
      3. Reporting From the CFM
        1. Displaying Cash Requirements by Department
        2. Evaluating Sources of Cash
        3. Scenario Analysis
    4. Chapter 7: Detailed History and Performance Measures Models
      1. Reporting Past and Future Performance
        1. Relevance
        2. Context
        3. Data Issues
      2. Reporting Performance From the Planning Framework
      3. Identifying DHMs
      4. Case Study—DHMs
        1. Sales Analysis
        2. HR
        3. General Expenses
      5. Defining the PMM
        1. PMM Content
        2. PMM Business Dimensions
        3. Case Study Measures for XYZ, Inc.
        4. Reporting From the PMM
    5. Chapter 8: Predict and Optimise Planning Models
      1. Predicting the Future
      2. Target Setting Model (TSM)
        1. Driver-Based Modelling
        2. TSM Content for XYZ, Inc.
        3. Using the TSM
      3. Detailed Forecast Model (DFM)
        1. Overview
        2. Developing the DFM
        3. Linking the DFM to the OAM
      4. Optimise Resources Model (ORM)
        1. Overview
        2. Case Study Example
    6. Chapter 9: Strategy Improvement Model
      1. Responding to Change
      2. Model Focus
      3. Link to the OAM and CFM
      4. Defining SIM Content
      5. Linking SIM Content to Management Methodologies
      6. Planning Capabilities
      7. Communicate Goals
      8. Propose and Validate Projects
      9. Select and Approve Projects
      10. Monitor and Forecast Projects
      11. Assess Alternatives
    7. Chapter 10: The Planning and Monitoring Process
      1. Defining Processes
        1. Components of a Process
        2. Performance Management Processes and Tasks
      2. Strategic Planning
        1. Purpose
        2. Tasks: Inputs, Outputs, and Sequence
        3. People and Planning Models
      3. Tactical Planning
        1. Purpose
        2. Tasks: Inputs, Outputs, and Sequence
        3. People and Planning Models
      4. Financial Planning
        1. Purpose
        2. Tasks: Inputs, Outputs, and Sequence
      5. Forecasting
        1. Purpose
        2. Tasks: Inputs, Outputs, and Sequence
      6. Management Reporting
        1. Purpose
        2. Tasks: Inputs, Outputs, and Sequence
      7. Moving Toward Continuous Planning
  9. Section 3: Implementing a Planning Framework
    1. Chapter 11: Latest Developments in Planning and Analytics Technologies
      1. Corporate Performance Management (CPM) Applications
      2. The Rise of Business Analytics
        1. The Next Competitive Edge
        2. BI Versus Analytics Versus Decisions
        3. Business Analytics, Big Data, and Decision Management
        4. Predictive Business Analytics: The Next New Wave
        5. Game-Changer Wave: Automated Decision-Based Management
      3. Application Integration
      4. Cloud-Based Applications
      5. In-Memory Chip Technology
    2. Chapter 12: Implementing the Planning Framework
      1. Planning and the Role of the Chief Executive
        1. Entrenched Beliefs Concerning Performance
        2. Organisational Culture
        3. The Unwritten Rules of Budgeting
        4. Rewarding Bad Behaviour
        5. Failure to Execute
      2. Implementing Change
        1. Agree on the Role of Planning
        2. Model Existing Processes
        3. Establish Improvement Themes
        4. Plan-and Resource-Specific Change Programmes
        5. Monitor Implementation
        6. Use Technology to Support Change
        7. Continually Develop the Planning Models Within the Framework
  10. Appendix I: Cgma Budget and Planning Survey Results
  11. Appendix II: Requirements of a Planning System