Planning, Budgeting & Forecasting Process
FinanceFebruary 02, 2018

How Can CFOs Make their Planning, Budgeting & Forecasting Process Perform Better?

Discover how the FSN’s research "The Future of Planning, Budgeting & Forecasting Survey 2017" does not simply highlights the main trends of budgeting, forecasting & planning but also stresses the main expectations of CFOs and the way they envisage to fullfill them.

Despite the huge effort organisations expend in the PBF cycle, very few can claim that their process lives up to the expectations of the business. According to FSN’s research "The Future of Planning, Budgeting & Forecasting Survey 2017" around 70% of CFOs say that their forecasting process is “respected”, “inclusive” and “strategically aligned”, but only 40% say that the outcome is “insightful”, i.e. reveals unexpected insights and pathways to better performance.

Furthermore, when it comes to the performance of the forecasting process itself (speed, accuracy and ability to look out further), most finance functions are struggling to keep up with the demands of the business. For example, only 41% are able to reforecast the entire enterprise in under a week, only 42% organizations are able to forecast revenue accurately within +/- 5% and only 50% of finance organizations are able to forecast with any confidence beyond 6 months.

But in the face of uncertainty many organizations are becoming more deeply entrenched in outmoded practices, for example reforecasting more frequently, without changing their approach. It is what the research calls the ‘hamster wheel’ effect, i.e. spinning the wheel faster and faster but not moving anywhere.


Thankfully the research shines a light on the characteristics of modern finance functions that drive a more efficient and insightful PBF process. And unsurprisingly, the solution is a combination of technology enablers and accounting technique. There are four stand-out characteristics of leading finance functions:

  • They are more likely to use specialist planning software, such as CCH Tagetik for forecasting and are therefore less dependent on spreadsheets: 15% of organizations that say their forecasts are insightful use specialist cloud software vs 10% who say their process is not insightful. And 35% of insightful organizations use specialist on-premise software vs 21% who say their process is not insightful.
  • They make more use of “cutting-edge” technology for analytics: 59% of those with insightful processes described their approach to analytics as ‘cutting edge’ compared to 26% of organizations who say their forecasting process is not insightful. Reassuringly, “Cutting-Edge” technology is not as advanced as the description might at first seem – it is within the reach of most organizations. In the survey we define “basic technology” as the use of spreadsheets, “advanced technology” as using pivot tables and BI tools, “cutting edge” as the use of advanced data visualization, charting and graphing and finally, “Experimental” as using machine learning and Artificial Intelligence to drive analytics.
  • They have a higher propensity to use rolling forecasts: 43% of organizations that say their forecasts are insightful use rolling forecasts compared to just 29% who say their process is not insightful.
  • They leverage non-financial data: 65% of insightful organizations say that management appreciate the value that non-financial data brings to forecasting

In broad terms, the technology and non-technology factors contribute differently to the overall picture. Specialist planning software enables a more collaborative approach and larger, more granular models. Collaboration builds trust, but larger models also assist accuracy.

Cutting-edge technology, especially data visualization, supports deeper insights, and rolling forecasts contribute to accuracy and looking out further over the time-horizon. Finally, non-financial data is most potent in assisting a longer-term view.

But none of these approaches on their own is sufficient to transform the predictive capabilities of the PBF process. However, the research shows unequivocally that using all of these techniques and technologies in concert will have a profound effect on the fortunes of the modern finance function and the organizations they support.

Do you want to discover more?

Gary Simon
Chief Executive of FSN & Leader of the Modern Finance Forum for CFOs - FSN Publishing Limited

Gary Simon is a highly sought after lecturer and trusted provider of 'thought leadership' and analysis about finance and business systems for CFO's around the world.
The bulk of Gary Simon’s professional experience has been as a senior consulting partner with Deloitte, one of the largest professional services organisations in the world.

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