Beyond Budget

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Panel discussion: Beyond Budgeting – breaking free from the annual fixed budget News categories: Enterprise and business strategy, Finance and accounting, Performance management and controlling
Panel discussion at the 5. SAP Leader’s Club meeting of Chief Financial Officers on “Beyond Budgeting” on June 24, 2003, at SAP Switzerland in Zurich, Switzerland, with representatives from Nestlé, Unilever and Borealis - organized and moderated by Juergen H. Daum The Beyond Budgeting management model is a new emerging concept for adaptive performance management that has been developed by the Beyond Budgeting Round Table (BBRT). It is gaining growing awareness and has raised interest worldwide. The mission and intention of the BBRT and of the Beyond Budgeting model is to help companies to become more productive and more nimble and adaptive organizations. But the camps are divided: some companies and their managers think budgets should be totally abandoned (that is actually what Borealis did in 1995), others think traditional budgetary control systems should be just reengineered. But nevertheless, a fast majority of companies expect that they will change their traditional budgeting system within the next 2 years.
One of them is Nestlé. Nestlé is actually on the way to reengineer its enterprise performance management concept and processes. The objective is to make the performance management process within Nestle more flexible. A key enabler for this is what is called within Nestlé “Dynamic Forecasting”. Another company is Unilever. Unilever has started last year a project for introducing what they call “Dynamic Performance Management”, which is not only looking on the performance management process itself, but also on other important elements surrounding it, such as the incentive system. In the following discussion we want to share some more detailed insights into Beyond Budgeting from a practical perspective with representatives from these two companies and from...
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