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NEU Infographic: Key Reasons to Improve Budgeting and Performance Management

Posted by Yana McConaty

Inforgraphic   Key Reasons to Improve Budgeting and Performance Management resized 600


Key Drivers to Improve Budget & Performance Management Processes

Compliance & Accountability
Regulations, commitments to citizens and constituents are forcing organizations to be more open and timely in their external reporting. This requires an unprecedented ability to access current and detailed information from within the organization.

Need for Better Performance Management Tools
Recent analysis indicates that many organizations have lost the ability to manage themselves, because organizational size and digital complexity now often mask the linkage between a business decision and its operational consequences. Against this backdrop, Budgeting & Performance Management promises to deliver the perceptiveness and agility managers require for effective decision-making.

Need for Better Internal Controls & Procedures
The weak economy has required organizations to strengthen their financial controls and minimize their room for error in spending.

Need for Financial and Analytical Applications
Many organizations turned to ERP systems to improve processes. However, despite improvements in back office operations, managerial processes were left largely untouched. These processes, such as annual budgeting, financial planning, and analysis have now started to break down - taking longer, costing more and becoming less connected to the business.

Competitive Pressures (“Real-Time Enterprise”)
Removing delays and introducing flexibility in internal planning processes enables organizations to dynamically introduce programs, evaluate opportunities, and manage relationships with stakeholders. By achieving, through increased process speed, key strategies such as operational excellence, performance-based budgeting, etc., organizations start becoming "Real-Time Enterprises".


Costs of Not Improving Budgeting and Performance Management

Compliance Hurdles
Given the potentially complex impact on internal systems, the government regulations and compliance deadlines may be difficult to meet unless a solid capability foundation is already in place.

Lack of Transparency, Control & Credibility
Diminished credibility and confidence with various stakeholders including citizens, constituents, partners, customers, and employees.

Inability to Fulfill Long- Term Vision
Inability to track, measure, and report on vital performance statistics may have implications on long-term strategy and goals.

Inefficient Management Processes
Instead of focusing on the factors that are driving the organizational performance, management and executives spend significant time obtaining, verifying and organizing information in order to generate reports.

Missed Opportunities
Inability to quickly seize opportunities as they emerge gives the competition sufficient time to react, thus eroding the competitive advantage.

Topics: budgeting, performance management, tools


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