Integrated Budgeting, The Most Powerful Tool for Business Steering

Modern business issues cannot be resolved without having a plan for future. One important aspect of prosperity plan, is financial planning and intelligence. Keeping this in mind, at Dana Energy, we believe accurate, integrated and measurable budgeting is vital to business success. A precise budget is the most important tool to implement a long-term business strategy and guide our business units towards their objectives.

In order to establish an innovative approach to budgeting in Dana Energy, we have established the “Strategy, Plan and Information” office within our company. The main responsibilities of this division are defining the business objectives of different units, ensuring a timely and accurate budgeting for different parts of the company which are aligned with their business objectives and ultimately, control the performance of the units based on pre-defined KPIs.  

By integrating strategy, budgeting and a high-level business control, we are able to assess the status of our all projects and business units in real time

In order to ensure the integrated functionality of this system, the budgeting system is implemented in our ERP software (IFS). The budget for all operational and support units of the company is prepared in this system. Having everything in IFS and linking them to company’s financial system, enables us to control the actual values versus plan for all aspects of company revenue, cost and cash transactions thorough different reports and dashboard. Due to the inherent differences between our business units, having a single system capable of managing all differences has been the most important success factor in our journey.

Defining standard high-level project management reports based on an integrated budget system has allowed us to unify the understanding of all project status by all stakeholders. Moreover, getting the details of budget data helps us to evaluate and analyze monthly project transaction against initial budget, in order to inform top managers whether they have reached the set objectives.

Additionally, this system enables us to provide a monthly income statement, balance sheet and cash flow of our business units that can be compared to their actual performance. These reports are prepared in accordance with financial standards, allowing them to be distributed to external parties outside the organization.

Finally, setting operational goals for business units based on the organization’s long-term goals is the final part of our integrated Business Steering. Target definition is an interactive process. As part of this process, the organization’s long-term goal will be compiled based on short-term numeric goals. Targets would be discussed between the corporation and business units until a mutual agreement is reached. The functional strategy for the achievement of objectives will be defined within the business units.

We believe in the diversification of our business units to cover the entire energy value chain, but we also believe in a unique and unified Dana Energy!

Therefore, in order to ensure our integrity, we defined our strategic planning, budgeting, and business performance monitoring system as the integrated backbone of all activities.

Our budgeting system is the main compass of our executive management team to ensure that all parts of Dana Energy are moving toward a single goal; being an energy company that powers prosperity, and to Power Nations, EnergyWise.

Neda Valadkhani & Elham Daneshkhah
Information & Budget Department