From budget marathon
to rolling forecasting

Traditional budgeting is “planning against the wall”

Morten Jonassen, Financial Planning specialist

Morten Jonassen

Planning Specialist Finance / Connected Planning
+47 73 421 27 82

morten@bluesprint.no

Morten-Jonassen

Morten has 25+ years experience as advisor and consultant in enterprise performance management. This includes financial consolidation and reporting, rolling forecasting, financial and operational planning and strategy management.

Morten started his career in banking where he worked with analysis. An inspiring meeting with a Financial Planning IT-supplier made him change industry. Since then he has worked with Connected Planning. He builds, implements and extends planning solutions in the Anaplan Connected Planning Cloud Platform, together with the customer. His main focus is on helping companies with the transition from traditional budgeting to dynamic budgeting.

How was working with Financial Planning and Analysis before Anaplan?

Before the year 2000, Financial Planning and Analysis was the same as budget. It still is for many. People used to think that planning was the annual budget.

— Budgeting was like a marathon exercise once a year.

Starting in July and finished December 31st this marathon contained:

  • Preparing the budget process
  • Distributing budget letters
  • In September/October making everyone work long nights to enter their data
  • Then get it processed by the board in December.

After that the world stopped. January 1st next year we were absolutely sure that this budget and data we had was completely wrong. And then you start over again.

What separates rolling forecasting from traditional budgeting?

We see that society changes faster and faster. Suddenly came Corona, which made all plans completely wrong. Imagine when the banks went bankrupt! Should you measure against budget or should you measure against market?

All the preconditions were destroyed. In such times you have to do things differently, but with traditional budgeting you still have your set budget and start measuring deviations from the budget.

With Anaplan you can predict the future performance of a business plan continuously over a predetermined time horizon, based on historical data. By doing this you can adapt quickly and save unnecessary time and costs.

Working closely with and helping clients create value, is a rewarding job. I know that we all in Bluesprint take great pride in it. What is amazing is the agility of the platform. Its fun building, implementing and extending the planning processes in Anaplan working closely together with the customer. It can be tailored to the clients needs.

Breaking up the organizational silos

A lot of planning processes are isolated. You have the human resources department working with the personnel system and people. Then you have accounting department working with accounts. And then you have the production department, that does not work with accounts at all. When these processes are isolated it can be completely incomprehensible.

I have worked with companies operating in organizational silos with the lack of a modelling and organizational tool. Just introducing small, simple modifications took an awful long time. It was mostly to sum up departments and accounts, aggregate products.

From data batch to realtime data

When Excel came it suddenly gave the possibility to actually process data. We found that as long as you had few data, it went pretty fast. But when you got bigger datasets you had to run batch. Our brain is not very batch. It runs a continuous thought process. And the brain is not very patient either.

— From experience working like this, I can say: You do not want to use a slow tool for analytical things because your brain is impatient and in real time — thank God!

You cannot solve the challenges of today or tomorrow by using old tools. And it’s so self-evident for all of us because it’s one of the things we experience every single day. When we get a little more into the abstract things, as technology actually is for many people, then there are completely different processes going on. Who the heck goes to the second-hand market and buys a 25-year-old diesel car? No one!

Keeping up with competitors

Making a budget is just typing numbers. It’s easy. The challenge is implementing it. And that’s where the planning comes in.

— “Here you have your goal, but how do you intend to do this?”

Having a tool such as Anaplan, where everyone communicates with each other and share information and the latest knowledge across the organization, gives you a powerful tool to become competitive and to really utilize the information as fast as you can.

When the competitor runs a campaign and eats from your market shares, you cannot sit and wait until you get this into the accounts, then get it summed up through an Excel report that two months later ends up on the management table and say, “now we are losing market shares”. You must act now and at the same time be able to say, “where should I implement measures and what is the dosage?” Make informed decisions.

Working with updated data, instead of being tied down to data from the past, enables you to plan better, make changes quickly and adapt to changes in the market.

Implementation

Every new Anaplan implementation starts out with not even graphics in the beginning, just tables, and that is what makes it so attractive and fun! Because you see how fast you can build, implement and extend solutions.

A total of 90 percent of Anaplan users apply the tool every day. You see that planning is actually something continuous. The implementation process reflects this. By connecting business domains, you create the opportunity to get a more comprehensive result picture through a constant planning process, within Financial Planning or other business areas.

Competition and changes in the market happens all the time. And that's why Anaplan is so well suited to be able to run better management. You cannot make better leaders with Anaplan, but at least you have a solution that is easy to adapt.

We see that there have been big changes happening very fast in the last five years.

— In a market that is totally dominated by the big ones, Anaplan is actually in the lead.

It’s a market leader driving technological opportunities going forward, and even these $ 100 trillion companies are struggling to keep up, and that’s pretty amazing!

 

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Categories: Anaplan, Bluesprint, Bluesprint and Anaplan, budget, connected planning Anaplan, dynamic budget, forecasting and rolling forecasting.