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Integrated performance management

Findings from Deloitte’s global planning, budgeting and forecasting survey

Intergrated performance managementDeloitte’s research into planning, budgeting and forecasting has analysed the survey responses of over 500 senior Finance professionals. Culture was identified by the research as the key to unlocking the potential of planning and forecasting. In addition to culture five areas emerged from the analysis as challenges to achieving improved PBF effectiveness:

  1. Integrating planning, budgeting and forecasting Thirty-seven per cent of respondents admitted to a failure to align their planning, budgeting and forecasting effectively with corporate strategy. In these circumstances there is a risk that the activities of the organisation will be misdirected, lack focus, alignment and cohesion because expectations have not been properly set

  2. Using forecasting properly Sixty-one per cent of survey respondents recognised the importance of forecasting as a way of compensating for the static nature of budgeting. However, there is a failure to appreciate how forecasting can enhance corporate agility and specifically a lack of understanding of how it fundamentally differs from planning, budgeting and target-setting

  3. Applying process discipline Nearly a third of respondents have no formal mechanism for monitoring and managing forecast quality, while less than half of respondents are able to forecast either revenue or costs to within a five per cent variance. Too often PBF processes are poorly defined or they are changed in an ad hoc manner

  4. Clarifying decision-making responsibilities A clear decision-making framework, reinforced by culture, helps organisations strike the right balance between an inclusive process that engages executives and managers and one where clear decisions can be made swiftly and decisively

  5. Exploiting technology Collecting, aggregating and analysing data via the ubiquitous spreadsheet still constrains most businesses, making the process of dynamic forecasting and planning slow, opaque and prone to error. Where purpose built software is employed its modelling and analytical capabilities are often not properly exploited.

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  • Donal Graham
    Lead Partner
    Finance and Performance management
    Tel: +61 2 9322 7279
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