With a business environment evolving at a rapid pace with digitalization, the weaknesses of traditional budgeting are becoming increasingly apparent. Here you can read about how rolling forecasts – or continuous planning – can make it easier for your business to keep pace with developments.
Stig Roar Sandvik is Director of Product and Business Development at Profitbase. He explains that the companies who contact Profitbase are those who have understood the value of continuous planning.
– Our customers have understood something very basic about the time we live in, namely that it is complex and often presents great challenges for those who follow the old way of thinking about budgeting.
According to Stig Roar, the so-called “static model”, where one meets once or twice a year to plan the budget, can in the worst case create more headaches than predictability.
– We are seeing it right now, that some companies are better equipped to cope with the big changes that have happened only in the last weeks during the corona situation, he says.
Continuous planning – what is it all about?
Continuous planning is often referred to as “active planning”. And the essence is that – in a reality characterized by frequent changes, you need to take greater account of different scenarios, such as in these times now with corona. How will it affect us if the employer’s contribution is reduced by 4%? How are we affected by potential layoffs?
– It is a difficult situation, which of course is also difficult to calculate the outcome of, and this is what we help simplify. The calculations must be compiled in a way that takes into account everything that will or can happen in the coming weeks and months, says Stig Roar. It’s not a coincidence that the chance of a successful restructure is four times as high in companies that use continuous planning procedures, he adds.