Beyond budgeting: rolling forecast model development

FLSmidth

Company description

FLSmidth is a leading supplier of equipment and services to the global cement and minerals industries. FLSmidth supplies everything from single machinery to complete cement plants and minerals processing facilities including services before, during and after the construction.



With more than 135 years of experience and with activities in more than 50 countries, FLSmidth is productivity provider no. 1 to its customers. Sharing our customers’ ambitions, we bring better solutions to light by improving their safety standards and enhancing their performance.

FLSmidth’s 12,000 employees use their unique process knowledge about projects, products and services to meet our customers’ needs for technical innovations, digitalisation and sustainable life-cycle management. Together with our customers, we challenge conventions, explore opportunities and drive success through sustainable productivity enhancement.

Project description

FLSmidth is using static budgets and quarterly estimates for budgeting/forecasting. We take a bottom-up approach to get estimates from each line manager up to the top. In theory, this should be an accurate way to make a forecast since each person contributes to it. However, in reality, it takes a significant amount of time to get through all the layers and, by the time forecast reaches the top, the estimates become inaccurate, which defies the whole purpose of forecasting.

Some industries have been adopting a rolling forecast or "beyond budgeting". A rolling forecast is a type of financial model that predicts the future performance of a business over a continuous period. It relies on an add/drop approach to forecasting that drops a month/period as it passes and adds a new month/period automatically. Rolling forecasts allow you to make quick tweaks along the way rather than letting mistakes mount up or giving yourself only one shot to make those changes annually/quarterly.

However, preparing to start using rolling forecasts usually requires significant investment of time, money and change management. Therefore, we would like you to:
• Asses our current forecasting maturity level and evaluate viability of Rolling Forecast to be implemented at FLSmidth
• Identify main KPIs (Market & Industry factors, Management inputs, etc.) and develop a simple rolling forecast model prototype
• Provide managerial recommendations how to make a gradual transition to rolling forecast.

Student description

For this project we seek for talented group of Master Thesis students (or a single student) pursuing relevant education in Finance, Accounting or other relevant Business studies. You should be experienced in doing financial reporting, good with numbers and conceptualising new ideas.

This project is a new initiative and we do not have prior experience working with rolling forecast so you will get decision power to shape the project. We expect you to be capable of working independently, be proactive, professional and take full responsibility for leading the project.

You will work directly with head of Internal and External Reporting who will provide you with an access to required data and will help you to get in contact with other relevant stakeholders within organisation. We are flexible on the working terms. That being said using the office for every day work is also an option.

The applications will be reviewed on an ongoing basis and we will close once the right candidate is found.