Too much time spent on budget issues, says research

KPMG reports that inefficient budgeting systems and processes are consuming about 20% of senior managers' time. In the worst cases, managers regularly devote 30% of their time to this one area of responsibility.

"Companies must start to radically re-assess the role of the budget and its usefulness as a management technique," says consultant John Fanning. "Organisations must begin to integrate their key management processes far more effectively into their structure."

Traditional budget processes are typically very inefficient, Fanning adds. He argues that the tasks, from strategy formulation and planning, through monitoring and reporting, tend to be handled in isolation. The result is extra work in the form of data gathering and analysis.

"Outdated systems are one of the main factors slowing companies down," Fanning notes, "and serious consideration should be given to updating technologies."

He advocates data warehousing and web-based tools as a means of giving managers rapid access to the information they need in the format they want.

Elliott Chase