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| Conferences & Events |
Next Steelwedge Webcast -- Using S&OP to Reduce Complexity and Create Value July 29, 2005, 1pm Eastern, 10am Pacific Principal Speaker - Seema Phull, Director, Process and Technology, Enterasys Networks Register here for this webcast Sales and Forecasting Management Forum Executive Roundtable , September 7-9, 2005, University of Tennessee Click here for more info Previous Webcasts — Forecasting and Consensus Planning in a Rapidly Changing Environment June 15, 2005, 1pm Eastern, 10am Pacific Principal Speaker - Christine Pfefferle, Director of Global Demand & Order Management, Tellabs Click here to view recording New Product Forecasting: Consideration and Issues , April 20,2005 Professor Kenneth Khan, University of Tennessee Click here to view recording Seven Keys to Better Forecasting , March 16,2005 Dr. John T. (Tom) Mentzer, University of Tennessee Click here to view recording |
| Related Articles |
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Predicting Future Demand in a Rapidly Changing Environment |
| Your Thoughts |
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If you have ideas for future articles or how we can improve this newsletter, please send us your feedback
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By Seema Phull, Director, Process and Technology, Enterasys Networks |
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Enterasys is a $360 million builder of secure enterprise networks, serving 25,000 customers globally in financial services , manufacturing, healthcare, education and government. When the economy turned south in 2000, Enterasys was affected like other technology companies before staging a comeback during FY2004 with a new Secure Networks Strategy and a totally updated product portfolio. Along with the new strategy and refresh of the product portfolio, the company also recognized the need for aligning business processes and information technology components that would help deliver cost control solutions necessary for achieving the goal of profitability. Under the guidance of a new president and now CEO, Mark Aslett, the company recruited a team of experts that brought thought leadership and experience in streamlining business processes and achieving operational excellence.
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| Enterprise Planning - Beyond Operations |
Margin Planning 101 - the Margin Calculation
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| By Anil Gupta, The Applications Marketing Group | By Anders Gjerde, Senior Manager at Steelwedge Software, Inc. | |
In almost every organization, the Finance team is responsible for creating and managing two plans - the detailed annual budget and a financial plan with a pro-forma income statement used for internal planning and external communication purposes.
These plans are typically created iteratively between Finance, other department heads and the President/CEO of the company. They are also commonly developed in spreadsheets and take weeks of effort. Over the course of the year, as the revenue picture for the year becomes clear and budgets get tweaked, Finance manually tries to keep budgets and the financial plan in sync.
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Margin Planning is an integral part of many companies planning process. The objective of Margin Planning is to get a clear picture of future margins with a view to predict and improve profitability as plans turn into action. This article discusses what is at the core of Margin Planning – the margin calculation and how it fits into a decision making process. In so doing, calculating margins correctly can yield great benefits, and – if done incorrectly – can be devastating. To start out, let's begin with a margin calculation that most people are familiar with: Margin = Price - Cost Simple though it seems, this margin calculation can the source of much confusion. The controversy is not in the formula itself – the problem is typically what costs to include in the margin calculation: Total (allocated) costs? Variable costs? What are variable costs, anyway? |
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