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Thank you for your interest in BBRT. This newsletter contains the latest news on BBRT events and research
Table of contents
Welcome to the BBRT global newsletter, which is designed to keep you informed of developments in Beyond Budgeting and the BBRT. For further information visit our web site at www.bbrt.org.
Members Updates
The BBRT would like to welcome our newest members:
What is BBRT?
The Beyond Budgeting Round Table (BBRT) is an international network of member organizations with a common interest in improving their overall performance. The BBRT helps organizations learn from world-wide best practice studies and encourages them to share information, past successes and implementation experiences to develop dramatically improved solutions to traditional budgeting constraints.
The BBRT promotes a management model for the innovation age based on a set of principles leadership and process principles that enable organizations to achieve superior sustained success relative to their peers. Organizations following this approach rely on twelve key principles outlined in the book Beyond Budgeting: How Managers Can Break Free from the Annual Performance Trap, published by Harvard Business School Press.
BBRT membership is available globally and regionally and has had great success in both the European and the North American regions. BBRT produces two major members’ meetings each year in both Europe and North America, web seminars and industry group meetings. These events combined with the extensive, continuous research keep BBRT members up-to-date on the most innovative techniques in financial planning. The BBRT also publishes case studies, and routinely conducts CFO interviews nationwide in order to stay abreast of trends and innovations in finance.
The BBRT also offers industry-specific membership that allows for more tailored workshops, education, and collaboration among each industry group. The BBRT currently has interest groups in the following industries: financial services, healthcare, consumer products, insurance, and public/government. In 2008 the Round Table will launch an energy & utilities group, professional services group, retail, and hospitality. In addition, membership is also available by topic with the most extensive being Shared Services, and Lean Performance Management.
March 2008
April 2008
BBRT INSIGHTS research series
The next set BBRT INSIGHTS papers are examining the Finance and Planning perspective. One papers have been circulated to BBRT members in December:
How to turn shared services into customer-focused responsive service providers
Abstract: Most large organizations are moving their central services functions to shared services centres. However, while the economies of scale can look compelling there are many hidden traps lying in wait. Unless these changes are accompanied by a real service culture then internal customers (i.e., business units) are likely to resist them and the full potential of these shared services centres (e.g., higher quality processes and lower costs) will be lost. This paper examines these issues and how some organizations have moved from top-down allocations to internal markets that enable operating teams to draw down central services when they need them.
How to control fixed costs without budgets
Abstract: Ask any CFO whether they manage costs with or without a budget and they are likely to question your sanity. Budgeting is so ingrained in corporate life that it is seldom challenged. But the behavioural dynamics of budgeting often destroy value and the ‘organization chart’ perspective is not ideal for seeing the cost reduction opportunities. That’s why some leaders are questioning the value of cost budgeting and seeking alternative ways forward. This paper looks at these alternative approaches and how they can help organizations to make deep (and permanent) cost reductions.
How to improve the quality of investment decisions
Abstract: Most organizations have a poor batting average in terms of successful investment decisions. Their performance can be improved significantly by using a number of techniques that tackle how the decision-making process works rather than just focusing on improving the accuracy of the forecast numbers. This paper examines these process improvements and how firms can benefit from them.
The BBRT INSIGHTS research papers are delivered to BBRT members on a regular basis. BBRT members can download the full paper from the BBRT Private Forum.
Forthcoming research papers
Join the BBRT to get access to the full papers and all the past BBRT research material.
During the past year, Steve Player, BBRT North America Director has conducted interviews with finance leaders in eight leading organizations. The full reports of these interviews have now been made available to BBRT Members. They are:
Join the BBRT to get access to the full papers and all the past BBRT research material.
Park Nicollet Health Services (a BBRT Member) is a non-profit serving the Minneapolis-St. Paul area, covering 96 zip codes and a population
having the highest average income and the highest insured percentage of any health institution in the United
States. Recently Dr Robert W. Hall published an article in the fifth issue 2007 edition of the AME's Target Magazine about Park Nicollet's journey to Lean Thinking and Beyond Budgeting
"Park Nicollet entered its modern era in 2003. CEO David Wessner began to investigate the Toyota Production System for ideas that would boost perational improvements beyond the quality initiatives that the hospital already had in place.CFO David Cooke attended a seminar on "Beyond Budgeting," by Steve Player, and began to investigate how the budget process could be exorcised from the institution. Wessner and Cooke decided that the two initiatives together might be exactly what they needed to increase the quality of health care delivery while keeping a little money to reinvest in the institution from the sums that that third party payers were willing to pay.
With so large an organization, ramping up momentum took some time. Both the lean initiative and "Beyond Budgeting" center on the CFO office. Lean began first. Before cutting loose from the budget, they wanted process improvement in place with a track record of operational measurements. Key performance indicators had to replace the detailed budget reports. They set targets for improvement, and track actual performance to them, but there is no comparison with a forecasted performance, as with budgets and variances. With that change, responsibility shifted toward the operating units; no more micro-managing or second guessing with a budget.
During 2004, the lean measurement system was put in place and data began to collect. From January 2005-January 2006, they ran dual systems. The budget still existed, but the CFO office test ran the new system twice, tweaking it after each trial. For 2006, they didn't prepare an annual budget. Late in 2005 a few managers asked if they had missed a deadline — budget planning requests were overdue. a few others never realized that the budget was gone until 2006 and reports against budget were no longer issued."
Download the full article from AME's web site. It is also available via BBRT On-line
The Association for Manufacturing Excellence (AME), is a not-for-profit organization founded in 1985 dedicated to helping companies with continuous improvement and their pursuit of excellence.
BBRT is an independent international shared learning network for all organizations that seek to improve their performance management through sharing information, past successes and implementation experiences. Our purpose is to help organizations introduce a new management model for the innovation age.
For more information, please visit www.bbrt.org, email Peter Bunce, or call +44 1590 679803
BBRT, 1st Floor 745 Ampress Lane, Lymington, Hampshire SO41 8LW, UK Tel: +44 1590 679803 Fax: +44 870 705 8799 Email: info@bbrt.org
(c) BBRT 2008 - All rights reserved
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