Context
In classic budgeting, a branch target is usually last year's number plus a growth rate. The flaw is this: a high-performing branch receives a harder target every year, while a branch in a low-potential area works against an unreachable one. The target rewards or punishes history rather than actual potential. The budget stops being a planning tool and becomes a negotiation.
Approach
- Branches were grouped into comparable cohorts by age, size of operation and customer profile.
- Regional growth rates prepared by strategic planning were fed into the target-setting system.
- Field potential was calculated per branch, with market share derived from FİNTÜRK data on the retail side and Central Bank Risk Centre data on the SME side.
- Branch growth potential was modelled together with customer growth targets by business line.
- Performance measurement was tied to achievement against potential rather than absolute numbers.
Outcome
- Targets were based on measurable field potential rather than past performance.
- Branches of differing size and profile came to be judged within comparable cohorts.
- Market share data became a direct input to target setting.
- The budget process moved from a negotiating basis to a data basis.
This case study describes the project through its scope and approach. Client name, commercial figures and performance metrics are withheld under confidentiality obligations.
What This Project Left Behind
A target whose achievability is up for debate is not a target. A budget's function is not to motivate but to direct the allocation of resources — and for that, the assumption behind the target has to be visible. This is the first question asked when setting up budget-versus-actual analysis in a company: what data produced this target?
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