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Planning, Budgeting, and Performance Measurement Template
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Planning and Budgeting
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Planning and budgeting are essential for management control. Effective planning and
budgeting require looking at the organization as a system and
understanding the relationship among its components.
Planning consists of developing the
objectives (the work required to achieve the organization's
goals), timetables, and performance standards needed to implement the organization's
strategy and assigning individual accountability for results.
Budgeting
involves
identifying, prioritizing, acquiring, and allocating the resources needed to carry out the
plan.
Strategic
thinking and planning are different activities and
require different mental processes and insights. Strategic
thinking is a creative activity whereas planning is an
analytical one. This difference in thinking can make it difficult to
accomplish both of these processes at the same time.
The products of strategic thinking are
goals and strategy. The products of planning are
objectives, budgets, schedules, performance standards, and a baseline to measure and
evaluate performance.
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Symptoms
of incomplete or inadequate planning and budgeting
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Management
activity is largely reactive, stressful , and disorganized.
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Authority and
accountability for results are unclear or highly centralized.
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Funding and other
resource priorities are unclear or non-existent.
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Cash flow problems
are common.
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Persons
responsible for activities have difficulty obtaining the
necessary resources.
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Objectives,
schedules, and budgets are not established or are not
communicated to persons responsible for action.
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Performance expectations are not
specified or achieved.
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Unexpected
workforce reductions or excessive overtime are common.
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Untrained or
inadequately trained employees are assigned important tasks.
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The organization
has recurring difficulty meeting
customer delivery and service requirements.
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Three Sigma's services
We assist executives
establish a formal planning, budgeting, and performance
measurement process and create a time
phased performance measurement baseline integrating
operating, financial, and investment activities.
We build
customized, interactive organizational models that integrate planning,
budgeting, and performance measurement and instruct and coach clients how to
use these models.
For
executives who choose to improve their planning, budgeting and
performance measurement systems using
their own resources, we provide a roadmap to
guide them through the process of goal setting, strategy formulation,
setting objectives, developing budgets, and establishing a
performance measurement baseline. The following models are available on this website and can be copied or downloaded free of
charge.
We provide coaching on-site, by
phone or e-mail to help or facilitate using these models.
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Expected results
Planning enables the organization to
anticipate and prepare for the future. Cleary
defined objectives provide the means to delegate responsibility and
accountability to those who will do the work. This spreads the
workload across the organization and frees top management to focus
on strategic issues. A strong management
control and information system provides the information needed for
timely corrective action.
An effective planning, budgeting, and
performance measurement system should produce the
following results:
- Proactive management activity
and time for strategic thinking and planning.
- A focused, disciplined
organization with good coordination among functions and
activities.
- Higher productivity and
greater operational efficiency because of
better work planning and coordination.
- Crises and unanticipated
events are contained and managed effectively.
- A stable, well trained
workforce performing key tasks.
- Planned goals and objectives
are regularly achieved.
- Customized
organizational models significantly reduce the time required for
planning, budgeting, and performance measurement.
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Copyright 2002 Three Sigma, Inc.
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