the art of budgeting

Tim Schojohann

The Art of Budgeting

The Goal: Improving ROCE through Accurate Budgeting

The Traditional Approach to Budgeting

Individual Budgets in Excel

Clarifications/Updates


Business decisions must be made on basis of high level information• High degree of ad-hoc requests needed to drill down• Late identification of required tactical/strategic adjustments• Generic cost saving programs rather than targeted

Strategic Impact of the Traditional Approach

Rejecting projects due to perceived budget limitations• Actual project spend lower than forecasted so that funds remain blocked• No time to plan how to spend surplus on revenue generating activities

Manual Forecasting Impacting Senior Management

Difficulty explaining deviations from budget plansHard to justify required budget for the following year

Lack of insight to answer executive questions leads to ad-hoc requests- Data to answer ad-hoc requests generally spread across systems and individual

Excel files- Ad-hoc requests take long time to answer and data can be out-dated once

communicated (e.g. “What do we currently spend on licenses?”)

Finance View Mgt

. Vie

w

Controller manage Data instead of Costs

Budget deviations hard to identify timely as only visibility into accumulated costs- Shadow bookkeeping deluding real numbers- Project scope adjustments not reflected in budget allocations - Financial view in data warehouse differs to project view, e.g. due to depreciation

Double accounting due to lack of visibility into movement of budget allocations- Limited to consolidated view on budgets and spending, inability to move cost items

between individual projects and/or budgets- Constantly clarifications required from Project Management

Slow and manual process to move data from Excel into the data warehouse- Team of controllers consolidating Excel sheets- Translating forecasts into data warehouse formats- Error prone process due to manual interaction

Project Managers Work in Projects AND Corporate

Administrative burden on project managers• Manual tracking and updates of budget plans• Involvement in answering ad-hoc requests is imperative• Additional decentralized PMO needed to cope with workload

Numbers and reports from Finance make no sense and lack granularity• Finance seems to speak a different language as numbers don’t match• Impossible to have meaningful discussions on budget allocations

• Integrate data from best-of-breed tools

• Enable common language on spending

• Proactive re-allocation of budgets

• Minimized reporting – Real time management insight

Xeraphic fills the Gaps between Departments and Systems

Overcome the Challenges of Excel

Human Error

File Version?

No History of Adjustments

Correlations?

Before

No comments

Historic View

CollaborationCorrelations

Enter data once Reminders

Single Source of Truth for Reliable Data

Integrity

Xeraphic

Automate the Consolidation of Budget Forecasts“A lot of time and effort involved to consolidate information as well as to keep it updated”



Fully automated consolidation and aggregation

Clarifications via drill down into cost items

Before Xeraphic

Drilling down for Clarifications?

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Before Xeraphic

Centralized view on initiatives down to line items

• Cost Projections / Rolling Forecast

• Fast, accurate and fully automated data processing

• Tracking Actuals vs. Plans

• Identifying and managing deviations

• On-going optimisation of Budget Allocation

Real Time Information on Plans, Costs and Forecasts

Understand Cost-Item-Dependencies when Cutting Costs

Before Xeraphic

Cutting costs might impact the organizations performance

Understand dependencies of cost items such as contractsUnderstand dependencies of cost items (e.g. contracts)

Customer Case: Deutsche Telekom

Soft savings

• Additional revenue through timely and proactive re-allocation of unused funds into revenue generating projects

• Massive reduction of effort to manage monthly cost projections, enabling rolling forecasts

• Improved cost transparency and confidence in numbers and planning

Hard savings (ROI > 300%)

• Less than 1/2 of unexpected deviations from budget plans

• Reduction of back-office effort by 60% (ROI)

• Reduction of decentralized PMO support requirements by 30% (ROI)

Improved process efficiency in Financial Planning and Budgeting by 400%

Answer the „Easy“ Questions Quickly, Finally

Built by experienced business leaders to remove the challenges and artificial complexity they experienced themselves during transformations

Next Generation Platform Technology Developed in alignment with Fraunhofer Institute Based on Gartner Requirements for Integrated Business Planning

Traditional systems are purpose-built for silos and think in different logicsCMO – Projects, HR – Cost Centers, SAP – GL etc.Integrating data from best-of-breed tools, enabling various use cases

Low Risk with Great Flexibility

Flexible delivery: SaaS, On Premise, HybridBuild with international data protection complexity in mind, encryption down to attribute level

Fast on-boarding: Initial Implementation during product validationFocus on customer success and enablement instead of professional services

Multi-tenancy / -hierarchical, -organisational, -lingual,...Multiple dependencies of same data enable further use cases (e.g. service costing, vendor management)

Everything we do is focused on customer successthat is also how we measure our outputs

NPS

How is this relevant to you?

Call me: +48 604 694 159Write me: [email protected]

Tim SchojohannRegional Sales Manager - Central Europe & Middle East

CRS | Managing Dynamic Businesses

mailto:[email protected]