Driver Performance-Based Budgeting and Rolling Financial Forecasts

Why Should You Attend:

The annual budget is often perceived as a fiscal exercise done by the accountants that is: (1) disconnected from the executive team’s strategy and risk management mitigation actions, and (2) it does not adequately reflect future volume drivers. The budget exercise is often scorned as being obsolete soon after it is produced, and biased toward politically muscled managers who know how to overstate and pad their budget request. To complicate matters, traditional budgets are typically incremented or decremented by a small percent change from each cost center’s prior year’s spending level. This “use it or lose it” behavior by managers in the last few months of the fiscal year unnecessarily increases their prior year’s costs and serves and consequently confuses analysis of who really needs what. This presentation will address how to resolve these issues.

Learning Objectives:

• To understand the deficiencies with the traditional annual budget.
• How to apply unit-level consumption rates with forecasts to project operational expenses.
• How to include strategic projects in expense projections.
• How to include risk mitigation projects in expense projections.
• How to apply predictive accounting for driver- rolling financial forecasts, what-if analysis, and outsourcing decisions.
• How to shift from bottom-up cost center consolidations to top down modeling.

Areas Covered in the Webinar:

• How strategy maps and their companion balanced scorecards communicate strategic objectives with target-setting to help cross-functional employee teams align their behavior to the strategy and better collaborate.
• Why measures of channel and customer profitability and customer value are now superseding profit and service-line measures – and shifting from product to customer-focused organizations including future potential value – customer lifetime value.
• How activity-based cost management (ABC/M) provides not only accurately traced calculated costs (relative to arbitrary broad-averaged cost allocations), but more importantly provides cost transparency back to the work processes and consumed resources, and to what drivers cause work activities.
• Reforming the broken annual budgeting process with performance based budgeting that links strategy to operations and is process volume sensitive rather than simply incremental at each cost center.
• Why business analytics, with emphasis on predictive analytics and pro-active decision making, is becoming a competitive advantage differentiator and an enabler for trade-off analysis.
• How to overcome barriers and obstacles to implement these progressive planning and budgeting methods.

Who Will Benefit:

• Board of directors
• CxOs
• CFOs
• Accountants
• Business analysts
• Strategic planners
• Budget analysts
• Marketing analysts

Instructor Profile:

Gary Cokins is an internationally recognized expert, speaker, and author in enterprise and corporate performance management improvement methods and business analytics. He is the founder of Analytics-Based Performance Management, an advisory firm located in Cary, North Carolina. Mr. Cokins received a BS degree with honors in industrial engineering/operations research from Cornell University in 1971. He received his MBA with honors from Northwestern University’s Kellogg School of Management in 1974.

Mr. Cokins began his career as a strategic planner with FMC’s Link-Belt Division and then served as financial controller and operations manager. In 1981 he began his management consulting career first with Deloitte consulting, and then in 1988 with KPMG consulting. In 1992 he headed the National Cost Management Consulting Services for Electronic Data Systems (EDS) now part of HP. From 1997 until 2013, he was a principal consultant with SAS, a leading provider of business analytics software.

His two most recent books are Performance Management: Integrating Strategy Execution, Methodologies, Risk, and Analytics, and Predictive Business Analytics. Mr. Cokins regularly presents at conferences for the AICPA and state CPA societies. He is a certified CPIM with The American Production and Inventory Control Society (APICS). He is currently the part time executive in residence for the Institute for Management Accountants (IMA).

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