Washington D.C. (PRWEB) February 4, 2006
Annual budgets have been a feature of public sector internal planning and control processes for as long as anyone can remember. They enable organizations to prioritize operating programs and plan spending. In recent times, however, planning and budgeting processes have been severely criticized in both the private and public sectors.
“Traditional budgeting takes too long, costs too much, adds too little value and, most importantly, encourages dysfunctional behavior. These problems have been magnified by the current ‘tightening of the target-setting’ mentality which has become prevalent in many Fortune 500 companies,” said Jeremy Hope, Research Director for the Beyond Budgeting Round Table and co-author of Beyond Budgeting published by the Harvard Business School Press.
Many experts feel there has to be a better alternative by which to manage an organization. The Beyond Budgeting Round Table has identified some of the current problems with traditional budgets and is now introducing a new interest group that will focus on improvement alternatives for public sector organizations.
“While many leaders are dissatisfied with the performance of governmental agencies, their efforts to address these problems through detailed targets and micro-management have failed to produce expected results,” said Steve Player, Managing Director for the Beyond Budgeting North America Region and The Player Group, a Dallas, TX based financial consulting firm. “However, just rewinding the tape and erasing the target-setting approach without a better alternative is unlikely to significantly improve things.”
For the past eight years the Beyond Budgeting Round Table (BBRT) has been working with a wide-range of organizations to understand these problems and find practical solutions. The “Beyond Budgeting Model” has been derived from the ‘best of best practices’ of leading-edge organizations. The Model consists of twelve principles divided into two groups which redefine performance management. The first six principles support a more adaptive set of management processes that enable organizations to be more responsive to the environment and to customer needs. The second six support greater devolution of responsibility to teams accountable for improving (internal and external) customer outcomes and relative performance.
These principles represent a holistic model (not a menu of options) but different organizations will shift the emphasis to different elements at different times.
“We believe that by applying Beyond Budgeting principles, Public Sector organizations can break free from the annual budgeting cycle by, for example, moving to three-year rolling plans,” said Player. “They can also better prioritize and utilize their resources, devolve more responsibility to front-line teams, and be in a better position to answer the question, ‘How well are we doing?’”
The BBRT has organized a Special Interest Group to address these (and other related) issues. The Inaugural Meeting for Public Sector organizations will be hosted on April 3-5 by The World Bank at its Washington D.C. headquarters.
This conference will feature speakers from various United States Federal, State, and local governmental agencies including Scottish Enterprises, a leading public sector organization in the United Kingdom; and members of the World Bank. Featured speakers include the United States Coast Guard; the United States Department of Labor; The Federal Office of Budget and Management; and representatives of The World Bank.
Julian Taylor, Director of Scottish Enterprises’ Network of Learning and Performance, believes strongly in the BBRT principles.
“Together, I believe we can really make some progress and find better ways of measuring success, managing resources, and providing more stimulating and challenging work for all those involved,” Taylor said.
About the Beyond Budgeting Round Table
The Beyond Budgeting Round Table (BBRT) is a supported network of member organizations with a common interest in improving planning, forecasting and control, thereby improving overall performance. BBRT is helping organizations look at world-wide best practice and showing them how to develop dramatically improved solutions to some of the constraints of the traditional approaches to budgeting. The BBRT has activities in Europe, North America and Australia. For further information go to http://www.bbrt.org
About The Player Group
The Player Group operates unique communities of practice such as the Activity-Based Management Advanced Interest Group, and the Beyond Budgeting Round Table. Each of these organizations features a number of Fortune 500 companies among its membership. Each member company has numerous years of experience in either advanced cost management or adaptive planning and control. The Beyond Budgeting Round Table promotes methods to manage your organization which are more productive than traditional budgeting.