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The process used to execute the Plan and Budget for an organization is often very complex and must be dynamic enough to serve management not vice-versa. Isolating process issues through better understanding, definitions, measurements, and communication will help focus the organization on the root causes of the planning and budgeting complaints..

Viewpoint A

One of the most difficult parts of the planning and budgeting arena is the area of process mechanics. Identifying those issues that are purely process related and addressing them can make the logistics run smoother, but may not touch on the root cause of the many complaints or concerns. Correcting the process issues will at least bring more focus on and reveal the other factors within the organization responsible for generating the most pain. More...

Viewpoint B

The Planning and Budgeting process is an essential management process since “Those who fail to plan – Plan to fail”. The P&B process must be much more dynamic than a calendar of events as it is a tool for management to wield in ever changing circumstances. A calendar may imply that P&B is complete. However, the process is to serve management not vice-versa.

You Can't Manage What You Don't Communicate
You Can't Communicate What you Don't Measure
You Can't Measure What You Don't Define
You Can't Define What You Don't Understand

Benchmarks, Resources, Recommendations, Implications

Viewpoint A

Some of the many complaints on planning and budgeting process involve, such concerns as:

  • Takes too long
  • Involves too many players
  • Confusing -- Never know what I ‘m supposed to do
  • Doesn’t make a difference in my final outcome
  • Don’t have adequate tools to do all the work
  • Repeated too many times
  • Out of date by the time final decisions are made
  • Too political to deal with my situation
  • Not much collaboration on my needs
  • Does not reflect real business environment
  • Doesn’t match the objectives to which I’m held accountable

The planning and budgeting processes for organization, whether they be private or public sector are inherently “political,” as they surface and elevate the many choices on the resource use and allocation. And many times, our frustration with this inherent natures leads to attempts to solve it and “make it go away.” However, streamlining budgeting will not, however, be the answer to the vexing resource trade-offs involving political choice. Yet it does have the promise to smooth out the logistical frustrations that take away time and energy away from effective management of needed decision-making.

This viewpoint does not solve political problems, (and cannot in its brevity address overly complex concerns identified by many), but attempts to shift the focus of discussion to those areas of improvement that we have control over, while not trying to erase inherently political features that drive effects on decision-making and resources. One of the most difficult parts of the planning and budgeting arena is the area of process mechanics – what does it take to keep things working well, while also being important to the real life work of my organization. Delving into such concerns yields reveals such issues as:

  • Data Access and Standardization: There is no single data source accessible by all people and staff for data input, management and analysis. Because each unit maintains a unique data set for its organization, reconciliation among and between unit information sources is difficult and time-consuming.
  • Process Standardization on Guidelines and Formats: There is often a general lack of standardization in many processes across organization. In many cases, standard procedures are available, but may not be known or followed. Non-standardization results in multiple requests for same information in differing formats, creating significant frustration throughout organizations that really do what to comply with requests.
  • Review and Approval Process: The review and approval steps in most organizations and process – many of which are in budget and planning – can be extensive, with much back and forth between different levels of the organization. Because these are many times done manually, a lot of time is spent on the low-value components of these steps.


Viewpoint B

A familiar management axiom states:
You Can't Manage What You Don't Communicate
You Can't Communicate What you Don't Measure
You Can't Measure What You Don't Define
You Can't Define What You Don't Understand

The Planning and Budgeting process is an essential management process since “Those who fail to plan – Plan to fail”. As P&B processes are compared to this management axiom, we begin to see the roots of many issues. We want to manage the P&B process; however, we find it difficult to communicate effectively about the process and within the process. In attempting to communicate, we find that we cannot measure the process. As we attempt to measure, we find that we cannot define the P&B process and its boundaries. As we try to define it, we find that we don’t understand it.

The planning and budgeting attempts to make decisions, analyze alternatives, and communicate before the actual need to do so. Some may question why these should be done before the actual need. However, doing so before the need gives time to exercise alternatives without the pressure of real time events so that an appropriate amount of analysis can select better alternatives and significantly reduce the cost of bad decisions. Planning and Budgeting before the need, gives time to ensure that communication is complete and effective; feedback can be received and evaluated; and decisions adjusted before resources are actually committed.

Contributing to the lack of understanding and definition of Planning & budgeting is the fact that there is no prescriptive science on this process. As part of the management process, planning and budgeting processes are unique to each business environment and management team.

A calendar of P&B deadlines is not the process but only a possible component of the process. The P&B process must be much more dynamic than a calendar of events as it is a tool for management to wield in ever changing circumstances. A calendar may imply that P&B is complete. However, the process is to serve management not vice-versa. A series of updates may be more important than one master document. With this in mind, the activities within the process are more important than the results of the process. Finishing may not be important as the process should be continuous and ever adapting to changing circumstances. The communication and decisions made during the P&B process are more important than the final document. In fact, a measure of success may be that the final document can rest comfortably on a shelf while all of the decisions contained therein are implemented.

The boundaries of P&B are not clear as other processes overlap, contribute to, require input from, or feedback to the P&B process. What are the boundaries between P&B and compensation? P&B and performance management? P&B and employee motivation? P&B and strategic planning? Compounding this problem is the fact that different decisions require different participants and different data sets. One size cannot fit all. Also, as different processes interact, different terminology and measures apply. Seemingly, there are different languages spoken between financial personnel with management and operating personnel with management. These require recognition and translation. If not in proper context, all of these differences may contribute to confusion.

Participants in the P&B process assume many different roles: stakeholder, reviewer, decision-maker, analyst, feedback provider, advocate, communicator, resource rationer, informed sideline, critic, competitor, and team-mate. An interesting twist is that as a budget review proceeds up the management hierarchy, a management may have to assume opposite roles such as a manager who critics then approves subordinate plans but who must then be the advocate as the process move to the next levels of management.

Few other processes require the interaction of more divergent people and roles. Thus the process is difficult to organize and coordinate. It is difficult to retain flexibility. A lot of people care about the process or at least the result. Often the inclusion of more people lowers the perceived materiality threshold as more questions could be raised for which responses must be already ready. This divergency may also contribute to a lack of enfranchisement by some people in the process. At times, this lack of enfranchisement is real as certain people may need only to be informed and not be participants.

As a complex process, P&B has ample opportunities for politics and gamesmanship. As the P&B process encourages analysis and communications, it reveals situations that may have been unknown previously or just held secret. Exposure of these situations may be uncomfortable to some. In turn, this discomfort or the potential for discomfort may encourage hiding or camouflaging facts or situations to avoid the pain of disclosure. Those who understand these are often able to leverage them to their personal advantage but to the detriment of the overall organization. There is no “silver bullet” to counter the negative aspects of politics and gamesmanship. Rather, this requires constant vigilance on management’s part to communicate, educate, train, and discipline the organization. Unfortunately, few people are promoted due to a good P&B process.

Also as a complex process, P&B also has ample opportunities for waste elimination and process improvement. Form must not triumph over the substance. P&B does require management time and attention, a precious commodity. Time pressures may prompt management over-rides rather than communication and dialog. Non-value added steps or activities should be eliminated. In a world of uncertainty, false precision is an ineffective mask. Relatively less time should be spent on baseline operations while more time should be spent on discretionary items and risk assessment. (ajs)


  • Your input is welcome here.


  • Your input is welcome here.


  • Establish a single data source accessible by all appropriate stakeholders for data input, management and analysis.
  • Standardize and maintain up to date processes, procedures, guidelines, and formats.
  • Establish review and approval levels and steps that are relevant and eliminate all others.


(1) Hiding is a pain avoidance strategy (2) More people lowers materiality level (3) Viewed as “Fun” by some and a “Pain” by others (4) Budgets should have meaning to multiple audiences (5) Those who understand the politics are able to leverage (6) People get disillusioned with the process (7) No prescriptive science on budgeting (8) The process is dynamic (9) The process is important (10) Given changes in planning have less impact than similar in Budget (11) Process serves the people (12) Process trumps substance (13) Requires more coordination across stakeholders (14) Budget Process is agnostic to strategy (15) Finishing may not be important (16) Non-value added steps should be eliminated (17) Triumph of FORM over SUBSTANCE (18) Difficult to organize and coordinate (19) Process not flexible enough (20) Some participants make budgets and others review. (21) Base budget requires less scrutiny. Discretionary requires more (22) What is the role of precision in a world of uncertainty (23) Reveals secrets (24) Budgets should reflect changing business conditions (25) Requires a constant update capacity (26) Communication does not require participation in the process (27) Budget is a slave to process (28) The process is more important than the result (29) It costs too much (30) Out of date is in the mind of the beholder (31) It takes too many people (32) Process needs ability to translate to level goals to operational teams (33) Participants need to feel enfranchised in the process (34) Implies a need for flexibility (35) Need to align data and terms across processes (36) Suggests a lack of progress reviews or communication (37) Process owner should be transparent when changing numbers (38) How do budgets accommodate special events? (39) Lots of people care about the process and result (40) It takes too long (41) Dome analysis adds value to budgeting (42) Poor assignment of tasks for budgeting (43) People get in the way of the process (44) It is continuous and does not stop (45) No one gets promoted due to a good budget process (46) Budget office cannot get resources to improve (47) Individuals experience downtime (48) Downtime from budgets is bad (49) May require more resources than present (50) Implies the budget is “done” (51) Boundaries not clear on “budgeting” (52) The process is different for different decisions

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