6 . ASSUMPTIONS DRIVE THE NUMBERS
PEOPLE & SKILLS
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This misguided focus on meeting the annual budget , creates ‘ end-of-year-myopia ’. It is impossible to plan effectively for the future if you ’ re not looking beyond the end of the financial year . In fact , successfully implemented IBP will naturally negate the annual budgeting exercise , replacing it with a continuously updated two , or three-year financial plan . Allocating resources to satisfy just the short-term is not only detrimental to long-term growth and profit , but also ultimately compromises the strategic ambitions of the business .
6 . ASSUMPTIONS DRIVE THE NUMBERS
There is a golden rule in a successful IBP process : “ There is only one set of numbers .” Without belief and agreement in the numbers across departments and up through the organisation , businesses can ’ t start to make informed decisions .
There is a simple three-step process in creating one set of numbers :
1 . Agree on the basic assumptions behind the numbers e . g . disposable income growth , shopper habit trends ,
NOVEMBER 2019