Budgeting Must Be Integrated in Strategic Process
Budgeting is not an independent process. It has to be integrated and follows from strategic planning process.
Every corporate should have a vision and long term goals. Strategies are to be developed to achieve such goals. Intermediate goals have to be set to achieve long term goals.
This entire strategic planning process has to be reviewed periodically and changes if required have to be incorporated.
Entire entity have to be mapped to an influence diagram and develop what if scenarios with strategies reviewed/developed with alternative to achieve goals if faced with new scenarios in view of changing environment, organizations strengths and weaknesses.
If need be rolling budgets may be developed.
Business Consultant, Australia
How to Integrate Budgeting in the Strategy Process
We need to establish initial traditional budgets at the outset of any new major projects or organisational start-ups, large or small. This is a baseline only. From then on, the strategy and intended value proposition must rule.
So the budget becomes a working tool, revised frequently for each division, project or entity, to serve guide and support the process, not to limit it.
As a continual discipline to make sure the costs are contained, but not to limit the goal achievement.