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
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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
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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
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