Companies in Asia, Europe, America and some in New Zealand are recognising that the existing budget process cannot continue. It has been with us, some say, since the Roman calendar was adopted by the western world. It is now seen by many that the budget process is a hindrance to management rather than a help. An international survey found that nearly 90% of chief financial officers (CFOs) were dissatisfied with their budget process and that there was often no link from the annual budget to strategy.
Jeremy Hope and Robin Fraser, the management gurus behind the “Beyond budgeting movement” have stated that not only is the budget process a time consuming, costly exercise generating little value, but also, and more importantly, a major limiting factor on how your organisation can perform. They have many examples of companies, following the philosophies they have expounded, which have broken free and achieved success well beyond their expectations.