Driver Based Planning and Forecasting in the Context of FP&A
This article is written by financial modelling specialist, Lance Rubin. You can find more of Lance's work at https://www.modelcitizn.com/
Background
When I first came across the term driver based planning and forecasting I was confused.
As an ex-investment banker having joined a Finance team the concept of drivers when talking about a forecast or plan was simply assumptions.
Why was it not called just that? Assumptions! Investment bankers have been building models with assumptions ever since the first model was built and a corporate transaction was negotiated.
So what’s all the excitement about driver based planning. It’s simply a financial model with assumptions to drive decisions..no?
Driver Based vs Assumption Based
Why give assumptions a different name i.e. a driver, why not just call it assumption based planning?
Ultimately a plan or a forecast is a collection of assumptions both in the numbers that are input into the model but also assumptions around...
The Purpose-Driven CFO Part 3: Purpose-Driven Strategy
By Andy Burrows
[First published 21 February 2018]
[This article is also on LinkedIn - why not "Follow+" Andy and give the article a "like"?]
This is part of a series of articles looking at Finance activities, and basically asking 'why?' The premise is that understanding why we do things helps us to do them better. It may even fundamentally change the way that we do them. If you haven't seen it already, take a look at the introductory article that explains the approach I'm taking: The Purpose-Driven CFO Part 1: Introduction
Why Does Strategy Come Under the CFO?
I guess the first question that might spring to mind is why consideration of strategy falls into a series about Finance. To some, Finance is still the bean counting, number crunching, function. And to them, the CFO is still the chief beancounter. These people don’t see Finance as having anything to do with business strategy. They see Finance as the people who count the pennies spent and pennies received,...
The Purpose-Driven CFO Part 2: Is it Time to Bin the Budget?
By Andy Burrows
[First published 9 February 2017]
[This article is also on LinkedIn - why not "Follow+" Andy and give the article a "like"?]
This is part of a series of articles looking at Finance activities, and basically asking 'why?' The premise is that understanding why we do things helps us to do them better. It may even fundamentally change the way that we do them. If you haven't seen it already, take a look at the introductory article that explains the approach I'm taking: The Purpose-Driven CFO Part 1: Introduction
The Budget – What’s it for?
In this second article in my series on Purpose-Driven Finance, I want to focus on one of the most widespread headaches that the CFO has to manage – the budget.
Of all the energy-sapping, life-draining, activities in Finance, the annual budget process seems to be the most hated. In almost every big business I’ve worked with, anyone involved in the annual budget process has had complaints about it. And the...
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