Sebastian Stange, Bjarte Bogsnes, Hardik Sheth

Traditional budgeting is like trying to square a circle, because the process tries to meet three ultimately incompatible objectives. First, budgeting sets targets to motivate and promote performance. These targets require directional and stretch goals. Second, budgeting provides forecasts of what lies ahead, but the forecasts only work if they are realistic, unbiased predictions. Production, for example, has to know what the expected sales are, … [ Read more ]

Going Beyond Budgeting

Among CFOs, alternative approaches to budgeting are getting a lot of attention. In particular, Beyond Budgeting, a concrete alternative to traditional budgeting, is gaining mainstream traction. The approach is producing impressive results at a growing number of global companies. Moreover, a BCG study confirmed that Beyond Budgeting has significant benefits: 59% of 174 finance executives surveyed reported increased sales, 56% saved significant costs in the … [ Read more ]