09.30
Registration and informal introductions
Session 1: An Agenda for Change
The opening session provides the context for change. It shows how the budget is no longer adequate for meeting the needs of the knowledge era characterized by rapid market/ sector changes that provide both strategic threats and opportunities to organizations. Why organizations need to create a better budgeting process to take advantage of strategic opportunities and deal with threats.
Session 2: Conventional Budget Alternatives
This session considers the favoured alternatives being deployed to improve or replace the annual budget. Step-by-step guidance will be provided. Alternatives include:
• Better Budgeting
• Reducing line items, shortening the time to create the budget and reducing iterations.
• Rolling quarterly forecasts
• Setting financial forecasts 4, 6 or 8 quarters ahead and reviewing and updating quarterly. This is proving a better tool for financial control, planning and resource allocation in many organizations.
• Top down target setting/bottom up planning Setting ‘non-negotiable’ targets from the centre but then allowing units freedom to plan how to meet those targets.
• Relative performance targets Basing targets not against a budget, but against the competition. ‘Beat the competition, not the budget’.
Session 3: The Annual Budget and The Balanced Scorecard
The Balanced scorecard is the world’s most popular tool for strategy implementation. This session explains how the balanced scorecard can be used to set strategic direction. The budget is then used to fund the strategic initiatives than will deliver the strategy.
• How the balanced scorecard strategic management system works
• How to implement dynamic initiative management and funding
• How to create a fully integrated strategic management and budgeting process through the balanced scorecard. Step-by-step guidance will be provided.
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Session 4: Overcoming the Cultural Challenges
The greatest barriers to abandoning, or re-engineering, the budgeting process in order to create and adaptive organization where strategy and financial management are fully aligned are typically not structural, but cultural. This session describes the major cultural challenges faced when transforming the budgeting process, and how these barriers can be planned for and overcome. Areas covered include:
• Selling the message to senior management
• Selling the message to the finance function
• Selling the message to line managers
• Overcoming resistance from those managers who are ‘good’ at working the budgeting process.
Session 5: Decoupling the Bonus from Annual Fixed Targets
The greatest obstacle to transforming the budget is arguably its link to the annual incentive compensation process. In this session we explain how leading organizations recast their bonus systems so that they are no longer linked to annually negotiated performance targets. We look at how bonuses can be linked to other frameworks including the Balanced Scorecard or metrics, such as relative targets. Group, team and individual-based alternatives will be explained.
16.30 Concluding remarks and Masterclass close |
