The 14 Foundation stones of a quarterly rolling forecast process

By David Parmenter

Quarterly rolling forecasting is a process that will revolutionize any organization, whether public or private sector. It removes the major problems that are associated with annual planning including:

  • An annual funding regime where budget holders are encouraged to be dysfunctional building silos and barriers to success
  • The monthly budgets set in the annual plan bearing no relation to reality
  • Takes too long – often a three-month period where management is not particularly productive
  • Using the annual plan as part of a bonus system.
  • Costs too much – annual planning costs in time alone runs into the millions each year for larger organizations
  • Often needs to be updated during the year to reflect the dynamic and a rapidly changing environment we work in see Exhibit 1.1.
  • Is an “anti-lean” process

There are a number of QRF foundation stones that need to be laid down and never undermined.  You need to ensure all the construction of the QRF model is undertaken upon the following foundation stones:

1. Abandoning processes that do not work
2. The QRF model should be built by in-house resources
3. Separation of targets from realistic forecasts
4. A quarterly process using the wisdom of the crowd
5. Forecast beyond year-end (e.g., six quarters ahead)
6. The monthly targets are set, a quarter ahead, from the QRF
7. A quarter-by-quarter funding mechanism
8. The annual plan becomes a byproduct of the QRF
9. Forecasting at category level rather than account code level
10. The QRF should be based around the key drivers
11. A fast light touch (completed in an elapsed week)
12. Built in a planning tool—not in a spreadsheet
13. Design the planning tool with four and five week months
14. Invest in a comprehensive blueprint

For more details access my toolkit that currently is on sale:

These 14 foundation stones are discussed in great length in my Toolkit How to Implement Quarterly Rolling Forecasting and Quarterly Rolling Planning – and get it right first time // Toolkit (Whitepaper + e-templates)

You can have a look inside the toolkit

Also read:

8 steps to implementing rolling forecasts

https://fpa-trends.com/article/best-practices-implementing-rolling-forecast/