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Peter Horvath and Ralf Sauter. "Why Budgeting Fails: One Management System Is Not Enough." Balanced Scorecard Report, September 2004.

It's inefficient, ages too quickly, and is out of sync with the strategic plan. No wonder so many executives hate toiling over the annual budget. But, says Peter Horvath (Europe's leading authority on management accounting, controlling, and budgeting), don't look to the budget as the sole management system. Horvath and his associate Ralf Sauter describe six ways to fix budgeting, including integrating it with such systems as the Balanced Scorecard, so that it supports strategy execution in today's fast-changing environment.

David P. Norton and Philip W. Peck. "Linking Operations to Strategy and Budgeting." Balanced Scorecard Report, September 2006.

In Part One of this two-part series, Linking Strategy and Planning to Budgets, David P. Norton made the case for a new expense category, STRATEX, dedicated to funding strategic initiatives—the means by which the enterprise carries out strategy. In Part Two, Norton and Philip W. Peck argue that successful strategy execution requires more than just a separate strategy budget: The organization must link both strategy and operations to the budget—and do so in a way that is transparent (thus easy to analyze and revise) and future focused. Causal models, driver-based planning, and adaptive tools such as rolling forecasts together constitute just such an integrating mechanism that can also give organizations more information (the whys, not just the whats), flexibility, and agility—vsital capabilities in a competitive, fast-changing world.

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