Despite the constantly churning mechanisms of business, the traditional budgeting process has changed little since the 1920s. An organization can spend months creating a blueprint for the next year and then expend even more effort to stay on that defined path—regardless of whether the initial assumptions were correct. This inefficient process creates static numbers that quickly become obsolete. They also do little to support strategic decision-making.
This article discusses alternate approaches to traditional budgeting, including rolling forecasts, driver-based forecasts, and beyond budgeting, supported by case study examples.