Budgeting, Forecasting and Planning In Uncertain Times

5

OPERATIONAL ACTIVITY MODEL

This chapter is concerned with the creation of an operational activity model that was described in Chapter 4 ‘Business Planning Framework’. Its purpose is to monitor departmental workload, resources, and outcomes. To illustrate how this is done, examples have been based on the XYZ, Inc. case study outlined at the end of the last chapter.

OVERVIEW

Model Structure

The operational activ ity model (OAM) is central to the planning framework that, as its name suggests, has a departmental activ ity focus. Its purpose is to monitor business processes with regard to departmental workload, resources, and outcomes. This is achieved through a range of measures that allows management to evaluate the following:

• What activities are carried out by each department

• How departmental activities contribute to organisational objectives

• What resources are consumed

The model holds different versions of data, much of which flows from other models in the planning framework (figure 5-1). For example, the target version holds values that represent targets to be achieved as supplied by the target setting model (TSM). When monitoring performance, the actual version represents what was actually achieved, much of which is supplied via the detailed history models (DHM). The forecast version contains values that represent what is most likely to happen should the current plan continue within the predicted business environment, which comes from the detailed forecast model (DFM). ...