1) The document discusses best practices in planning and forecasting based on Aberdeen's research. It identifies pressures like market volatility that companies face and best practices used by top performers. 2) The top performers (best-in-class) are defined as having over 102% budget accuracy, 99% forecast accuracy, and finalizing budgets before the next fiscal year starts. They strategize first before setting budgets. 3) Best practices for top performers include developing formal planning processes, automating workflows, involving decision-makers, and improving data quality. They re-forecast more frequently than average companies.

1. WHAT SETS THE BEST-IN-
CLASS APART?
5 BEST PRACTICES IN PLANNING
AND FORECASTING

2. Aberdeen’s Research
o Aberdeen PACE Model
Methodology
 Pressures
 Actions
 Capabilities
Financial Planning,
Budgeting, and
Forecasting
 Enablers
Will the Economy
Emerge? Will You?
o Strategies and Tactics
Planning, budgeting and forecasting lay the
KPIs – Usage and Specifics
foundation for any effective business plan,
but economic uncertainty can make it
difficult to set clear goals and objectives.
During volatile economic times, this is more
o
critical than ever for success and survival.
Follow-up Surveys
Are you able to adapt financial plans and
budgets as conditions change? Are your
finances accurate? o
Each respondent who answers the survey
will receive a complimentary full copy of the
report containing this study's results (a
$399 value). Individual responses will be
kept strictly confidential and data will only
be used in aggregate.
interviews
2

3. Top Pressures Year over Year
Market volatility creates the need to 47%
39%
dynamically account for change ('agility') 37%
Need to better align Planning / 41%
Budgeting with corporate goals 29%
34% 2010
Corporate mandates for cost control 32% 2009
34%
2008
Current / past accuracy of the budget 22%
25%
negatively impacts corporate performance 42%
Current processes are too long & 21%
24%
resource intensive 34%
0% 10% 20% 30% 40% 50%
Percentage of Respondents
3

4. Best-in-Class Criteria
Definition of
Mean Class Performance
Maturity Class
Best-in-Class:  102% overall budget accuracy*
Top 20%  99% forecast accuracy
of aggregate  20% improvement in profitability year over year
performance scorers  66% “always” finalize budget prior to the next fiscal year
Industry Average:  92% overall budget accuracy*
Middle 50%  89% forecast accuracy
of aggregate  6% improvement in profitability year over year
performance scorers  37% “always” finalize budget prior to the next fiscal year
Laggard:  66% overall budget accuracy*
Bottom 30%  73% forecast accuracy
of aggregate  8% decline in profitability year over year
performance scorers  27% “always” finalize budget prior to the next fiscal year
*Ratio of actual to budget
4

5. How Do Companies Approach Financial Budgeting?
Best-in-Class Industry Average Laggard
80% 71%
Percent of Respondents n=171
70%
60%
50%
50% 44%
40%
30% 26%
22%
20% 14%
10%
0%
Strategy drives budget Budget drives strategy
For top performing companies, strategy drives budget
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6. Strategic Actions of Best-in-Class – Planning for the Year
2010 2009
Develop a formal planning / budgeting / 47%
forecasting workflow process 40%
Automate the process flows associated 41%
with the budget process 20%
Involve more decision-makers in the 38%
planning / budgeting / forecasting process 40%
19%
Improve data quality
52%
Develop a consolidated view of the process 19%
and the results, to be available on demand 28%
0% 10% 20% 30% 40% 50% 60%
Percentage of Respondents
6

7. Re-forecast Frequency
Current Frequency Desired Frequency
45%
40% 40%
Percentage of Respondents, n = 171
35% 32%
30%
25% 26%
21%
20%
18%
17%
15%
13%
10%
9%
5%
5%
4% 2%
1% 1%
1% 2% 0%
0%
Never On Daily Weekly Monthly Quarterly Semi- Annually
Demand Annually
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8. What Budgeting Methodology are Companies Using?
Best-in-Class Industry Average Laggard
Percentage of Respondents, n = 171
75%
59%63%
50% 38%
28%
22% 20%22%
25% 14% 13%
6% 7% 8%
0%
Budgets prepared Zero-based Performance Based Driver-based
based on historical budgeting (start Budgeting (PBB) budgets (for
data (Previous with a clean slate / (Result oriented example: net new
Year’s Actuals) no historical data) planning and customers drives
budgeting) customer service
budget)
Laggard companies are predominantly focused on historical data only
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9. Enhanced Collaboration in Financial Planning,
Budgeting, and Forecasting Process
Percentage of Respondents, n = 171
Best-in-Class Industry Average Laggard
75%
50% 48%
50% 39%
34% 35%
22% 25%
25% 14% 18%
0%
Bottom-up Top-Down Combination Top-down,
Bottom-up
Leading companies use a combination of top-down and bottom-up approach
9

10. Dynamic Planning Capabilities
Best-in-Class Industry Average Laggard
Percentage of Respondents, n = 171
80%
66%
59% 61%
60%
52%
38% 40%
40%
32%
27%
20%
20%
0%
Ability to reforecast Ability to perform Ability to incorporate
as market conditions “what if” scenarios business drivers into
change and change analysis the on-going forecasting
process
10

11. Ability to Conduct “What if” Scenario Analysis
with Forecasting / Re-forecasting…
100%
Yes , but selectively because it’s
entirely manual
Yes, some portion of the
75% process is automated
30%
Yes , it’s automated
50% 41%
33% 45%
25%
22%
20%
9% 14%
0%
Best-in-Class Industry Average Laggard
More Best-in-Class companies have fully automated or semi-automated “what if” scenario
analysis capability with forecasts / re-forecasts 11

12. Visibility Leads to Alignment of Goals
Best-In-Class Industry Average Laggard
Percent of Respondents n=171
80% 68%
58%
60%
45% 45%
38%
40% 30% 33%
22%
20% 14%
0%
Ability to integrate and Able to drill down to Able to perform multi-
align sales forecasts with successive levels of detail dimensional reporting with
overall business revenue from summaries roll-ups
and cost forecasts
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13. Specialty Applications - Technologies Supporting the
Process
Financial reporting and consolidation 71%
(standalone) application 48%
26%
Planning / budgeting / forecasting 45%
(standalone) application 43%
15%
Financial reporting and consolidation features 37%
38%
of an ERP or other financial application 27%
Corporate / Enterprise Performance 32%
26%
Management application 12%
Best-in-Class
27% Industry Average
Budgeting and forecasting features of an
28% Laggard
ERP or other financial application 14%
0% 20% 40% 60% 80%
Percentage of Respondents, n = 171
13