Introduction of Rolling Forecast Drives Forward Looking Behavior and Improved Accountability for Results

 
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Context and Challenge

  • A leading producer of petrochemicals with over 2,000 employees set its sights on aggressive growth and needed to improve certain foundational processes

  • The new CFO was not satisfied with the forecasting and budgeting processes which did not reinforce accountability, a long term outlook and created massive organizational burden during the annual budgeting cycle

  • The forecasting & budgeting process was ineffective:

    • The forecast looked only 3-6 months a

    • head which drove short-term mindset

    • The forecast was developed exclusively by the finance group which reinforced lack of understanding and ownership among the business units

    • The annual budgeting process was painful and resource intensive

    • Unclear roles did not encourage accountability


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Approach

  • We worked with the team to discover pain points in the forecasting and budgeting processes and created an improvement plan to increase accountability, increase visibility, and reduce organizational burden

  • The forecast was lengthened from 1 to 6 quarters to reinforce longer-term thinking.

  • The process was updated to include several review and approval cycles by owners of business units to reinforce accountability.

  • The new process enabled a meaningful reduction in annual budgeting time by pre-populating the budget for the following year. It also pushed the start of the budgeting from June to September, reducing the cycle from six months to three.

Working with a team of dynamic people toward a set goal leads to success. I have learned that change brings fear, but not changing can be more scary.
— Communications Team Leader
 
ChemicalsCorey Wills