Escolar Documentos
Profissional Documentos
Cultura Documentos
Budgeting Techniques
Rolling Budget (typ. 12-18 mo. out) Zero-based Activity Based SALY (Same As Last Year) Fixed Incremental (last yr + %) Flex Bracket (best/worst case scenario)
Budget Reporting
Analysis
Results of Operations
Operating Plan
Problem
If compensation is based on company performance or meeting certain target levels, it undermines any strategic plan
Beyond Budgeting
Book by Jeremy Hope, Robin Fraser Examined mostly non-US companies Conclusion: Working with budgets, as practiced in most corporations, should be abolished.
Beyond Budgeting
Organizations of any size and industry can use Beyond Budgeting Examples
Toyota Svenska Handelsbanken (Swedish bank) Aldi (German retailer) Southwest Airlines Ahlsell (Swedish building materials wholesaler) ISS (Danish facilities service group) World Bank Sightsavers International (UK charity)
clear principles and boundaries Create high-performance climate on relative success Give people freedom to make local decisions that are consistent with governance principles and the organizations goals
decisions at front line teams Make people accountable for customer outcomes Support open and ethical information systems that provide one truth throughout the organization
Adaptive Processes
performance potential Base evaluation and rewards on relative improvement contracts with hindsight Make action planning a continuous and inclusive process
according to prevailing customer demand Base controls on effective governance and on a range of relative performance indicators
Beyond Budgeting
Commonality: All successful companies examined in Beyond Budgeting adopted the balanced score card Focused on four broad categories (FCIL)
Financial Customers
Internal
Learning
Beyond Budgeting
Customers
DSO sales per customer receivables time to delivery/completion shipping costs customer satisfaction regulatory
Internal
quality safety yield, waste, scrap rework overtime hours inventory levels back orders
Learning
turnover employee satisfaction head count vs. sales ratio training education performance compensation, benefits
Beyond Budgeting
Planning
Company Analysts
More
Forecasting Trumpet
Next 12 months
Strategic Plan
Harvard: Cone of Uncertainty Larger the cone, greater the uncertainty and precision Cone of Uncertainty is inevitable
Forecasting
Intel model
Budgets in 90 day increments
90 100 90 Forecast a year out
Final Thought
Motorola
Identified 10,000 defects in closing process
10 day close Finance & Accounting costs: $140 million or
10 Tools for More Effective Close Cause & Effect fish bone
Man Machine
Defect # 1
Method
Material
and constraints
Support A B C
Constraints A B C
Motorola
End result at end of six year study and
(U.S. benchmark)