Drive long-term strategy and analyze alternative value creation scenarios. Quickly develop baseline plans for organic growth strategies and potential M&A initiatives.
Intelligently support top-down, bottom-up, driver-based planning, rolling forecasting and scenario analysis.
Extend planning and analysis across the organization, collaborate with business partners and align granular operational plans with financial goals.
Download Predictive Analytics 123 from the OneStream Marketplace, configure and deploy predictive models across planning processes.
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Planning, Budgeting and Forecasting helps establish goals, objectives and resource allocations for the enterprise. Accordingly, conquering the process is critical to ensuring a strong partnership and alignment between Finance and Operations regarding plans for hiring, for making capital investments and for meeting revenue, expense and profit objectives.
The process is about more than just creating an annual budget or annual operating plan (AOP), though. To be effective, the process must align strategic planning with financial and operational planning and granular business drivers. Moreover, in today’s volatile and often disruptive economic environment, leveraging agile planning techniques — such as driver-based rolling forecasts on a quarterly, monthly or more frequent basis — is quickly becoming the norm.
As with the financial close and consolidation process, the processes involved in planning, budgeting and forecasting can be straightforward in a small business. But in a mid-sized to larger enterprise with multiple divisions, locations and operations around the globe, the process can become daunting. It’s not uncommon for the annual budgeting process in a large enterprise to consume 3–5 months of the year when setting targets, collecting budget submissions from managers, consolidating and reviewing the results, and then iterating the process until alignment is achieved and the final budget is approved.
Most annual budgets are obsolete shortly after they’re created. Thus, most organizations have implemented some form of a rolling forecast to revisit and update budget assumptions on a quarterly, monthly or more frequent basis depending on the nature of the business.
Some forecasting processes extend to the end of the current fiscal year, for example 3 months of actuals and 9 months of forecast. But a true rolling forecast extends for 4 quarters or more, beyond the end of the fiscal year. This approach helps organizations see further into the future and, in many cases, has reduced reliance on the annual budget or even completely eliminated it.
Comparatively, using spreadsheets and email to support the budgeting process in a small enterprise can be viable. But in a larger enterprise with hundreds or thousands of departments, cost centers and managers participating in the process, the spreadsheet approach becomes unwieldy. Leading organizations have thus adopted purpose-built planning, budgeting and forecasting software applications designed to manage the complexity of these processes. These applications include built-in workflow, process management, data entry forms and spreading functions. Some software vendors also offer specialized applications for specific tasks, such as headcount planning, capital planning, project planning and sales planning.
There’s one caveat here, though. The use of fragmented software products for strategic, financial and operational planning still often introduce complexity due to the need to move and reconcile data between applications. This fragmented approach also creates the need to maintain and upgrade multiple planning software products. Leading organizations are instead adopting unified platforms that support and align planning processes across the enterprise. Also known as “unified business planning” solutions, these platforms streamline and simplify the planning process, reduce complexity and increase agility — empowering CFOs and Finance teams to lead at speed.