Overview
Budgets are the vehicle for allocating resources, measuring activities, and identifying needed changes and improvements. An organization’s strategy is the primary driver of costs. To be effective, the budget must be linked to strategy and long-term plans. Numerous organizations have achieved a series of short-term targets (budgets) but failed longer term, demonstrating the lack of this necessary linkage. Forecasting, a critical part of any successful budgeting process, can be flawed by technical errors, organizational structure, or emotional forces. The establishment of a system to collect, process, and analyze big data can provide significant insights into the budgeting and forecasting process. An efficient system of incorporating big data and analytics into normal activities will improve management’s decision-making. This brief program offers specific actions to improve your forecasting and budgeting activities. In addition, more advanced techniques are identified for the participant’s further review, which can be applied throughout an organization. Good budgets effectively allocate resources, provide information for decision-making and serve as an early warning system for unforeseen events. A poor budgeting process fosters a false sense of security, provides inappropriate or inaccurate data, and reinforces the status quo. Budgets are about the organization’s story, not just the raw numbers!
Major Topics:
- Why forecasts and budgets are frequently wrong: behavioral finance; improper goal setting, games, continuing the status quo, traditional budgeting techniques
- Incorporating strategy into budgets: improving measurement systems; common errors, developing strategies and appropriate measurements
- Expanding the budgeting framework: rolling forecasts; mission-based budgeting, zero-based budgeting, post-completion evaluations, contingency planning, black swan events, identifying improvements
- Big data: definition, challenges, goals, current uses/examples, sources of information
- Analytical tools: ration analysis, benchmarking, Pareto analysis, trend analysis, regression, simulation, dashboards
Learning Objectives
- Understand all facets of the budgeting process
- Provide techniques to improve forecasting
- Demonstrate how a budget can be a vital tool for overall long-term improvement
- Identify immediate actions that can result in measurable benefits to an organization
- Understand management, uses, and potential benefits of big data
- Employ techniques for further research
Designed for:
Public, private and non-profit organizations and their members – CFOs, CEOs, controllers, auditors, and managers
Prerequisite:
Experience and/or exposure to financial management
Advanced Preparation:
None