Budgeting Presentation


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How to get your budgeting right in the corporate industry

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Budgeting Presentation

  1. 1. BUDGETING:Case Study, Concepts and Debatable Ideas by Ambassador Tal Edgars
  2. 2. Summary: Today’s presentation 1.  Done Business Model 2. D Done  Strategy 3. Done  3 Alignment 4. 4 Budgeting
  3. 3. BudgetingThe art and science of allocating and aligning Resources to g g strategic plans
  4. 4. Budgeting: Some thoughts…Two major roles of Budgeting:1.1 Provide real life CONSTRAINTS to strategic planning real-life2. Provide RESOURCES to realize strategic plansWhy Constraints?1. Over aggressive unrealistic planning, usually by Marketing/Sales need to be grounded to real life2. Creative entrepreneurial thinking when resources are limited3. Enforce the need f A3 E f th d for Accountability i.e. ‘ROI’ thinking t bilit i thi ki for all Managers
  5. 5. Alignment: 4-Wheels Model M d l Business PersonStructure Model Strategic Planning Culture Leadership Resources
  6. 6. Alignment: Framework • Focus pointCultureC lt • Alignment • Quality • Innovation & Differentiation • Risk taking Ri k t ki g • Performance Management • Corporate obsession • Decision making
  7. 7. Alignment: Framework • Org Structure • Job DesignStructure • C&B • Policies & procedures p • Decision making • Job fit • Management Systems • BSC and KPIs • Decentralized & Empower
  8. 8. Strategy: Framework • Role modeling • V s o M ss o Vision/Mission/Philosophy losop yLeadership • Leadership Style • Delegation & Empowerment • C&B, Promotions • Sense of Urgency • Speak regularly about p g y Performance
  9. 9. Strategy: Framework • Recognition • RecruitmentPerson • Training • Profit sharing • Values • Motivation • Self Efficacy • Awareness • Useful Competencies • Career aspirations • Attribution (control)
  10. 10. Strategy: Framework Enablers • TechnologyResources • Equipment Funding • M t i l Materials • CAPEX • OPEX • Human • Intellectual p y Property • Partners • Property
  11. 11. Alignment: 4-Wheels Model M d l Business PersonStructure Model Strategic Planning Culture Leadership Resources
  12. 12. Each Discipline Requires Different Priorities & ResourcesOrganization, jobs,skillsCulture, values,norms Operational Product CustomerInformation and Excellence Intimacysystems LeadershipManagementsystems
  13. 13. Each Discipline Requires Different Priorities & Resources Operational ExcellenceOrganization,Organization •Central authority, low level of empowerment authorityjobs, skills •High skills at the core of the organizationCulture, values, , , •Disciplined Teamwork Disciplinednorms •Process, product- driven •Conformance, one size fits all mindsetInformation andsystems •Integrated, low cost transaction systems •The system is the processManagement •Command and controlsystems •Quality management y g
  14. 14. Each Discipline Requires Different Priorities & Resources Product LeadershipOrganization, jobs, •Ad hoc, organic and cellularskills kill •High skills abound in loose-knit structuresCulture, values,C lt l •Concept future driven Concept, future-drivennorms •Experimentation and out of the box mindsetInformation and •Person-to-person communications systems P t i ti tsystems •Technologies enabling cooperationManagement •Rewarding individuals innovative capacitysystems •Risk and exposure management •Product Life Cycle profitability
  15. 15. Each Discipline Requires Different Priorities & Resources Customer IntimacyOrganization jobs, •Empowerment close to point of customer contactOrganization, jobsskills •High skills in the field and front-lineCulture, values, Customer driven •Customer-drivennorms •Variation and have it your way mindsetInformation andI f ti d •Strong customer databases, linking internal andsystems external information •Strong analytical toolsManagement •Customer equity measures like life time valuesystems •Satisfaction and share management •Focus on ‘Share of Wallet’
  16. 16. Managing Gaps between actual and planned budgets1. Budgeting vs. Priorities2. Basic Budgeting policies3. Activity Grid to determine budget priorities4.4 Budgeting for Investments based on the ‘BCG Matrix’ principles
  17. 17. Budgeting vs. PrioritiesPriority = Time + Money
  18. 18. Budgeting vs. Priorities Example: Business Situation vs. R&D P i i i E l B i Si i Priorities Upturn Flat DownturnFight Complacency Innovation SalesSharpen Edge Acquire Cash FlowKeep Momentum ProfitsConquer Build momentumNPD Cycle Time Focused on F d Improve Top 15% ‘Breakthrough’Improve Edge revenue-generating JV, In-source, Out- , , p productsExtensions sourceCounter Competitor Eliminate bottom 20% ↓ R&D, ↑Sales
  19. 19. Basic Budgeting policies• Flexibility to switch between line items• Reserve Funds• Loans/External Funding
  20. 20. Activity Grid to determine budget i iti b d t prioritiesIncrease (↑) Create (+)What are features/ What are features/ activities/services to activities/services to increase? introduce?Reduce (↓) Eliminate (-)What are features/ What are features/ activities/services to activities/services to reduce? eliminate?1. Manage conflicts where limited resources should go2. Solve problem of compounding activities & resources
  21. 21. Budgeting for Investments based on the ‘BCG Matrix’ principles p p MarketPotential Business Performance
  22. 22. How to maximize Budget?1. Align budget to priorities2.2 Integration of businesses and functions for teamwork3. Do practical, implementable stuff that bring real results (hard work) g ( )
  23. 23. Budgeting in a Downturn
  24. 24. Budgeting in a Downturn
  25. 25. Budgeting in a Downturn
  26. 26. Budgeting in a Downturn