1. Europäische Hackett Budgeting Studie

Executive Summary Acceleration of the budgeting process in European companies – more than a trend Increasing volatility and uncertainty in business and the accompanying internal reorganisation have left many to wonder whether the traditional annual budgeting process – with tedious negotiations and rigid targets – is an exercise of questionable value. Traditional budgeting approaches have been widely criticized, but how is the criticism being parlayed into a more effective approach at European companies? Until now, reliable information about plans to reengineer or even abandon traditional budgeting in European companies has been difficult to come by. In order to establish an empirical baseline on current budgeting processes and planned changes in European companies, Answerthink and The Hackett Group surveyed more than 70 large, complex Europe-based companies. Below are some of the study’s main findings: The majority (69%) of study participants currently use a traditional or a slightly improved traditional budgeting approach. Just over one-quarter (28%) use a reengineered approach and 3% have abandoned budgeting. Half of the companies surveyed need at least 80 working days to complete the budget, most of them require 100 or even more days. Long cycle times are the primary complaint (71%) of management at companies surveyed. By the time budgets are approved, they are largely out of date. Only 15% of study participants know how much their budgeting process costs. This should be a source of concern to management, since the bud- geting process is among the most costly Finance processes and among the most fertile potential sources of cost savings when the process is optimized. Improving the accuracy and timeliness of budgets is high on the agenda of European CFO’s. A clear majority (78%) of the participants plan to change their budgeting approach within the next 12 to 24 months. The biggest group (66%) plans to reengineer the budgeting approach while 12 % of the participants plan to eliminate budgeting completely. One of the key findings of the study is that budgeting methodologies and practices in place have not kept up with the developments in most market- places and organizational structures. Unfortunately, these developments will continue, so the gap will widen in case companies do not address the current issues with budgeting. There is no single, one-size-fits-all solution to fixing the problems that plague budgeting at European companies. Instead, the key is to identify the best practices and solutions that are appropriate to each company’s particular situation. To implement these solutions successfully requires a commitment to making improvements holistically, across processes, technology, people and, importantly, corporate culture. In other words: A best fitting budgeting methodology will only work when treated with the proper emphasis. © 2003 All material contained herein is the sole property of Answerthink Europe GmbH. All rights reserved. Unauthorised duplication or dissemination strictly prohibited.