What does it bring to the table?
Benjamin Franklin famously coined the phrase “If you fail to plan, you are planning to fail”.
As a founding father of the United States of America, Franklin was a remarkable individual whose achievements range from being a successful author, politician, diplomat, entrepreneur, inventor, scientist, and of course, a statesman.
Planning and acting was a cornerstone of Franklin’s industrious output.
How does Franklin’s famous phrase relate to the budgeting process?
The budgeting process is a plan for resource consumption. The consumption of resources is directly related to your organisation’s plan of actions.
The budgeting process in many organisations suffers from a perception problem. It is often viewed as serving a management control purpose first and foremost, specifically in the control of spending.
The 21st Century Budget Process
The role of the budgeting process has evolved from the late 20th to the early 21st century.
The acceleration of computing technology and software applications has enabled a change in the role of the budgeting process.
The budgeting process today, coupled with the latest planning technology and Business Intelligence tools, serves a wider practical influence on the day-to-day decisions and actions of an organisation.
Today, the budgeting process reflects the forward plan of actions of effective resource consumption.
The prevailing output from the actions can be measured daily and presented in graphically rich dashboards anywhere, anytime.
There is no question on the benefits of action planning. The key is to ensure the budgeting and forecasting process is in situ with the weekly decisions on the organisational actions. That is having KPIs aligned to strategy, cascaded to staff that have the decision-making authority to act; that is underpinned by a budgeting and forecasting process that actively measures the progress of decisions with KPI management reporting.
What does the budgeting process bring to the table: your competitive advantage.
In the context of 21st century planning systems, Franklin’s famous phrase can be translated as “If you fail at budgeting, you are budgeting to fail”.
Is budgeting a waste of time? Only in the respect that it can be done more efficiently within an organisation’s budgeting process cycle. Processes can always be improved; engagement with stakeholders can always be invigorated, and more advanced systems can always be incorporated.
However, what the 21st century budgeting process also brings to the table is your competitive advantage.
That is a plan of actions linked to strategic goals, resource consumption, and output that is measurable, insightful, and critical to ongoing decision making. The 21st century budgeting process is central to your organisation’s success!
To close with another Benjamin Franklin quote from his book The Way to Wealth, “have you somewhat to do tomorrow, do it today”. The time to act on advancing your 21st century budgeting process is today.