Beyond Budgeting: Driver-Based Forecasting and Performance Management

Dynamic Growth Management&

Driver-based Forecasting

1 November 2011

The Driver-based Philosophy

Rolling forecasts - evidence-based and provable

One Real-time group forecasting database

Management collaboration towards one common strategy

What do we want to achieve?

Manage Future Growth – control future outcomes

Plot Sales Trajectory

Measure Drivers/Limiters

Dynamic Performance Management

Track Competition and Competitiveness

Rolling Forecast Dynamics

£53,249$86,578€72,894$98,617

Timeline

Today ►FØ F/cast

SALES VALUE CHAIN

OPERATIONAL MANAGEMENT

Sales Value Chain

SALE

5%30%

55%75% 95%

ULTIMATE CONVERSION

RATE

ATTRITION

SALES PIPELINE

Forecasting Sales Trajectory

Zero Subjectivity 100% Dependable Prospects Matched to Risk Appetite Accurately Sensitised

X > Filter Sales Tail by

Conv. Rate

Sensitise by Actual

Conv. Rate

Meeting ForecastsTARGET

100%

150%50%

DRIVERSLIMITERS

Drivers / Limiters Service Levels Lifecycle/Obsolescence Competitor Activity Replenishment Capability Causal Analysis Impact & Trends

Process Performance Delinquency Value of Sales Inputs Competitive Advantage Causal Analysis Impact & Trends

New Business Activity Scenario Data Source Analytics

Process Performance

Landmark Process

Lead Attrition

SUCCESSSALES LEADS

Competitor Analysis Causal Analysis

Success rates Customer Service level

Activity/Throughput Process Duration

WIN

FAIL

EXCEPTIONAL SALES [e.g. Promotions, Intra-Group]

Ultimate Conversion rates Impact & Trends

G-Index

12 monthsToday

Actual sales

Actual wins

Actual churn

Actual conversion time

Actual sales pipeline

Actual conversion rate

Actual spot FX rate

Actual impact previous sales

Actual impact previous churn

Actual conversion performance

Future pipeline potential

12 months

next 12 months forecast previous 12 months actual

Lean Enterprise Cornerstones

PlatformCloud or IntranetVendor-side InvestmentVendor-side InfrastructureAdvanced Security

MethodologyNon-prescriptiveSkinny ‘Input’ vs. ‘FAT’ outputLocalisationInternationalisation

DesignWay-you-Work ValuesAdvanced web optimisationUser CollaborationIntuitive

FunctionInterface to personal systemsData Portal to personal filesData Exchange to core appsDocument sharing

BUSINESS FIT FUNCTIONAL FIT HIGH ROI LOW RISK LOW MAINTENANCE HIGH ADOPTION

Taking the ‘if’ out of ‘What if?’