Planning And Budgeting for real Strategy Execution

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Strategic Planning and strategic execution must be performed. this is a guide for both.

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Planning And Budgeting for real Strategy Execution

  1. 1. Strategic Planning and Budgeting For Media V.Moulakakis
  2. 2. <ul><li>The Objective: </li></ul><ul><li>Given that a media organization has developed or updated its strategy, how does it ensure that the necessary financial, human and other resources are committed to the strategy? How is accountability clearly established? </li></ul>
  3. 3. The gap
  4. 4. Proposed Media Strategy Planning <ul><li>Architecture –Decompose the strategy into media strategic themes. e.g. improve antenna’s international presence, optimize antenna group’s convergence and digitalization business architecture. </li></ul><ul><li>Targets –Develop stretch targets through cause and effect scenarios, e.g. optimize group’s targets through antenna’s corporate and international portfolio. </li></ul><ul><li>Initiatives –Define a portfolio of cross-functional initiatives for each theme, e.g develop a multi dimensional CRM strategy through out the group not only TVs, this can be optimized and intertwined with targets </li></ul><ul><li>Accountability –Assign accountability by strategic theme, every theme that is strategic focus should have an owner and someone accountable </li></ul><ul><li>Functions –Align functional plans with enterprise strategy, Antenna’s functional plans on how sales management conducted or marketing campaigns should be linked to strategy </li></ul><ul><li>Funding –Link the strategy to the budget, very important issue budget will change solely from ground up, which means that strategy will drive Antenna not budget. </li></ul><ul><li>Purchasing- Theoritical cost model identified and consolidated to planning processes. E.g. production cost management through activities and contract alignment to cost model. </li></ul>The toolset
  5. 5. Two important issues need to be taken into account when designing a strategically aligned media organization planning and budgeting process a) Strategy Planning –generally deals with the two to five year window, focused on long term direction and programs b) Operational Planning & Budgeting –focused on the one to two year horizon
  6. 6. Develop convergence & Digitalization services Proposed Strategic Theme Antenna’s Operational efficiency whilst Digitalization PROFIT MAXIMIZE SHAREHOLDER VALUE Cost consolidation & containment ABC Grow revenue Attract viewers, users, readers Power our relationships and Optimize risk mgmt with advertisers Partner strategy optimization Develop Six sigma for Technical Quality Optimize Back office Processes e.g. purchasing IT alignment and convergence HR alignment and strategic focus training Organizational change towards full digitalization Learning Internal Customer Financial
  7. 7. The perspective strategic planning and budgeting mechanism in more detail for a Media group
  8. 8. A perspective Media group mechanisms to align strategy and budget
  9. 9. Proposed Media Operational Planning & Budgeting <ul><li>Information –Enable the Operational Planning & Budgeting process through robust information architecture and enabling technology. </li></ul><ul><li>Driver Models –Use driver-based models representing the business value chain as the foundation for operational and financial planning. </li></ul><ul><li>Investments –Rationalize investments through a multi-criteria approach and dynamically manage resource allocation. </li></ul><ul><li>Service Agreements –Align operational activities and strategic initiatives through service agreements. </li></ul><ul><li>Initiatives –Estimate the financial impact of strategic initiatives (“STRATEX”) and track it separately to facilitate trade off decisions on expenditures. </li></ul><ul><li>Forecasts –Use rolling forecasts to estimate expected near and mid-term future performance. </li></ul><ul><li>Performance Analysis & Review –Take corrective action to address performance gaps based on causal analysis and review. </li></ul>
  10. 10. Investments appraisal
  11. 11. Rolling forecast as a prime budgeting practice for Media Organizations
  12. 12. Driver based models for Budgeting derived from Strategy
  13. 13. Our performance GAP and how Performance management handles our Performance ???? The airline service paradigm
  14. 14. My Media View Strategic themes should be the basis for planning and execution of strategy. They provide a convenient framework for cross-business integration. Targets should reflect the cause-effect nature of strategy, rather than focusing on single factors Initiatives should be bundled by theme, prioritized, funded and managed as a portfolio prior to the beginning of the budgeting process Accountability should be assigned by strategic theme at the executive level of the organization Each function should identify a portfolio of strategic initiatives, derived from the themes of the integrated strategic plan, as the input to their functional plans. Strategic investments should be grouped as a common budget category / account, (similar to G&A, R&D, etc.) so they can be managed appropriately . Driver based models, built on a deep understanding of the activities and core processes supporting the economic business model, are essential for successful rolling forecasts as they provide the bridge between operational activities and financial outcomes Operational investments should be prioritized and funded using a multi-criteria approach. Investment management should then be integrated in to the rolling forecast to dynamically re-evaluate and re-allocate resources. Rolling forecast, based on driver models, support dynamic, continuous planning in everything from strategy refreshes and target setting to the development of the annual plan.

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