Challenges for Planning, Budgeting & Forecasting

What are the most common criticisms of the top management with regard to the processes of planning, budgeting and forecasting?

• Lack of integration of corporate strategy and operational planning which makes monitoring of corporate performance
• Complex cash flow and balance sheet
• Manage missing flexibility, cooperation and communication to the process between the different business areas
• Difficulties in the preparation of analytical models for data analysis
• No "what if" capabilities
• Difficulties in managing different versions plan during the planning process
• Lack of "Audit Trail"
• For too long planning cycles and excessive manual effort
• No central planning model: sluggishness in the adjustment of the planning model based on changes in the planning process
  
  

Personnel and HR

• Very detailed data must be processed in order to plan the information on level employees (position, date of hire, bonus plan, pension, insurance, etc.)
• Large gap between human resource planning process and the comprehensive planning process for the material costs
• Integrated Management of recruitment and release regulations with immediate effect on earnings per cost center
• Staff transfers between cost centers
• Data security for sensitive data
  
  

Sales

• Difficulties, multidimensional planning models to deal with complex dimensions (customers, products, sales) and not being able to collect data on an aggregated level
• Lack of cooperation and not valid for all central data source ("single point of truth")
• High complexity in the management of the planning process with planners and many different tools
• Complex planning models that with changes without relying on IT or external consultants can not be customized.
• No linkage of the sales planning with other plans (production, personnel, procurement, income statement and balance sheet forecasts)
  
  

Production Costs

• The typical decentralized production process leads to very complex organizational structures that need to be organized homogeneously
• Complex planning processes that are carried out with different tools and are only partially integrated (Sales Budget, HR, not synchronized with the production budget)
• Mismatch of data from the finance department and the data of production units
• Difficulties in matching and re-classification of GUV after sales costs and total cost method
• Investment costs (CAPEX)
• Massive delay in the analysis of actual data (usually only after the recording of incoming invoices) with corresponding disadvantages for monitoring costs.
• Lack of integrated purchasing system (investment proposal - Order - invoice)
• Difficult to determine whether the invoices are for suppliers within the budget
• Scattered over many communication process across departments in terms of CAPEX to paper documentation with enormous effort
• Use of individual tools (mostly Excel spreadsheets) do not guarantee data security
• Very high personnel costs necessary to keep the individual investment initiatives transparent and comprehensible