Although Beyond Budgeting is about so much more than just budgets, our name tends to draw people, at least initially, towards the budget word. Once there, cost management often pops up as the number one issue, for obvious reasons. How can we manage cost without a budget?
Increasingly, managers are now looking to change the corporate planning process and replace the traditional annual budget with rolling forecasts, 12, 13 or 15 months ahead. What is the reason for this development?
Traditional budgeting has for a long time been criticized for encouraging counterproductive behaviour, hindering growth and wasting time on useless exercises. In recent years, the Beyond Budgeting methodology has gained ground as an alternative.
Over the twenty years that I have worked with Beyond Budgeting, I have asked tens of thousands of managers and Finance people all over the world about how satisfied they are with the budgeting process.
Welcome to this blog series, where I look forward to share with you some of my reflections on what I believe are very important issues for most organisations today.
In this article we will look at the different methods an organization can use to set direction. Planning involves many kinds of methods that help managers make decisions.