- Cost Transformation
What is it?
Beyond budgeting is the principle whereby companies need to move beyond budgeting because of the inherent flaws in budgeting, especially when used to set contracts. It proposes that a range of techniques, such as rolling forecasts and market-related targets, can take the place of traditional budgeting.
What benefits does the framework provide?
- It's a faster and more adaptive process than traditional budgeting.
- It's a decentralised process, unlike traditional budgeting where leaders plan and control organisations centrally.
Implementing beyond budgeting? Questions to consider
- Is there a clear case for change, with the benefits fully explained?
- Have managers carefully considered the degree of decentralisation possible within their organisation?
- Is there a governance framework with clear priorities and boundaries?
- Is there a high-performance ethos based on visible and relative success at all levels?
- Do front line teams have the freedom to take decisions within agreed parameters?
- Is there trust and openness at all levels of the organisation?
|Actions to take / Dos|