On today’s Whiteboard Wednesday, Andy explains the Budgeting & Forecasting process, and the differences between and explanatory and exploratory budgeting and forecasting.
Andy: Hi, and welcome to another edition of Whiteboard Wednesday. My name is Andy Welkley and today we’re going to talk about budgeting and forecasting. If there’s a chill in the air and the leaves are starting to change color, you know it’s time for that painful process of budgeting and forecasting. But here at MRI, we think about it year-round and we’re going to join a panel to talk about transformational budgeting and forecasting.
Today we’re going to give you a little sneak peek about what we’re going to talk about. First of all, we want to talk about transforming the way you think about it. Most budgeting and forecasting processes start with a group of smart people who come up with a hypothesis about what will happen. Then they go and gather a bunch of data, crunch some numbers, get back in that room and talk about how that data winds up with their hypothesis.
This is an explanatory method. Why we arrived at that hypothesis and we use the data to explain our reasoning for what we think will happen. That has a very short lifespan. It doesn’t look too far in the future and it only gives us a little bit of a view about what might happen. We want to change the thinking there and move more to an exploratory method.
This is really about how we arrived at that hypothesis. What numbers do we want to look at? What trends do we want to evaluate to really give us a look, not just in that short window of time in the future but use that data, use things in the market that we see, to look out beyond that and arrive at that hypothesis with the data that we see and the trends that we have.
Join me. Use this link to join the webinar and learn more about transformational budgeting and forecasting.
Thanks, and we’ll see you next time on Whiteboard Wednesday.