Greetings, I'm Doug Llewellyn. I'm on business planning andfinancial planning here at ZDNET. Today over the next few minutes, I'm going totalk to you about the pain-free annual budgeting process. Hopefully, you're allclapping right now because you realize how bad it is to come to the office andthink about those six-hour meetings, where you're sitting there andnegotiating, struggling to find one set of numbers that you're going to livewith for an entire year. It scares me. It scares everybody. But guess what? Itdoesn't have to be that way. You can take this 'set in stone' budget thatyou've been dealing with year over year and its entire process with the CFO andthe central planning committee and you can throw it into the recycle binbecause I'm going to entrust you in new concept today called the 'rollingforecast.'
What does a 'rolling forecast' do? It allows you to actuallythink about your numbers with today's business needs in mind. In the old way,you got completely strangleholded when you got a delay in a new businessconcept. So the 'rolling forecast' institutes several key things that I'm goingto call the three C's that you'll work on with other budget owners, the CFO andthe central planning committee. Communication, we all like it. We're all toldwe need to be better at it. We all tell our managers they need to be better atit. No one does it enough. Collaboration, what does this mean? It means youactually talk to people and think about the way to improve the business. Ican't imagine anybody not wanting to do this. But guess what? There's a lot ofprocesses out there that sort of hint at collaboration and finally these twolead in the control. We all want it. We feel important, I feel important, youfeel important when we have control.
So let's give a real-world example of this. So you have runa company that has two key departments: a logistics department and a channeldepartment. Logistics has been run the same way for many years. Channel alwayschanges. They get a lot more money. Logistics starts out the year with a million-dollarannual budget. Channel starts with two million. Well guess what? Logistics mayget to delay. Communicate upward to the CFO and everybody else that they founda revolutionary way to improve the company's bottom line through a new process.In the old way, they'd say, "Well, let's think about it next year before Ican't afford it now because I need $250,000." In the new way, the twobudget owners work together. They work upwards with the CFO and other people onthe central planning committee and they think about the fact that Channeldoesn't need to use all this money. They can take $250,000. They can transferto Logistics. Logistics is happier. These guys are still hitting the goals theyneed to hit and the CFO has just added incremental value to the bottom line ofthe company.
So how can technology help you do this? Well, everybody hasthe Excel spreadsheets, but they're not always the most efficient way. Let'slook outside and see what's out there from a software perspective. I happenedto have found three that maybe helpful for you and your company. Lawson Budgetand Planning is one, Hyperion Software, which many of you have probably heardoff and the new one I just found, little bit of a corky name, Budget Maestro.Now, I doubt you guys are all going to be there like a maestro conducting theprocess. But it may be very helpful for you to learn how to throw the old oneaway, pick up the new one and increase the revenue production of your company.
