A Field Study of the Emerging Practice of Beyond Budgeting in Industrial Companies: An Institutional Perspective

How Czech firms deal with operational budgets? – Survey results

“…A simple explanation of this is fact that most transformations of budgeting practices or systems are both continuous and incremental, and take place over relatively long periods of time (Henttu-Aho & Järvinen 2013). In a study published in 2015, we observe very few firms which plan to abandon the traditional use of budgets for control but a relatively modest number of firms which plan some changes in budgeting process (Popesko et al 2015).…”

“…Their impact is based on focus and accuracy of budget outputs (Activity-Based Budgeting), improvement of forecast accuracy (Rolling Budgets) and the radical abandonment of old practices and ideas (Beyond Budgeting, Zero-Based Budgeting). Description of these methods and their impacts for theory and practice are objects of works by many appropriate authors (Cardos, 2014;Henttu-Aho & Järvinen, 2013). Cardos (2014) thinks that budgeting stands at a crossroads.…”

The role of a predictive analytics project initiator in the integration of financial and operational forecasts

“…For their use as forward-looking information in accounting, these financial forecasts can be updated and consolidated for division and corporate reporting purposes, depending on company policy, every month or quarterly (a rolling forecast company), or even only annually in connection with the budgeting process (a traditional annual budgeting company) (see e.g., Horngren et al, 2015). In some instances, the distinction between an annual budget and rolling forecasts may not be obvious, as one of the sales forecasts of a company may be "frozen" and serve as the budget for the entire year (Henttu-Aho and Järvinen, 2013). Typically, the accounting function is in charge of coordinating financial forecasting, including sales forecasting.…”

“…In congruence with this view Elbashir et al (2011) maintain that only BI systems that are effectively integrated with the data warehouses of organisations can create value for the business. The opponents refer to inherent challenges related to the different purposes of different forecasts, i.e., the problems related to a simultaneous use of forecasts for challenging targets (financial forecasts) and realistic estimates (operational forecasts) (see Henttu-Aho and Järvinen, 2013). Furthermore, it has been suggested that data integration-of which accounting information is a prime example-does not automatically yield benefits (Goodhue et al, 1992) …”

“…They suggest that the advantages of data integration may outweigh costs only in certain situations (when the business environment is not turbulent or uncertain), and not necessarily for all the data that the organisation uses. The opponents of data integration also refer to inherent challenges that are related to the different purposes of different forecasts, i.e., problems related to a simultaneous use of forecasts for challenging targets (financial forecasts) and realistic estimates (operational forecasts) (see e.g., Bourmistrov and Kaarbøe, 2013;Henttu-Aho and Järvinen, 2013).…”