Driver-Based Budgeting

Driver based budgeting is an approach for simplifying, expediting, and improving the budgeting process. The concept is to derive budgets based on expected volumes of activity. For labor, required resources are determined from expected work volumes for specific activities. For expenses (eg. Travel), the number of trips and an average cost per trip are used to establish budgets. We assist organizations with the following aspects of this approach:

• Developing planning models
• Developing unit output costs
• Developing planning processes
• Defining system requirements
• Establishing the enabling tools and technology

Our integrated management services address common challenges that often limit the value of this approach such as:

• Planning models aren't always maintained by operations, thereby undermining the process
• Planning models can't always identify operational capacity issues
• Capacity planning doesn't incorporate projects and new products
• Unidentified capacity constraints underline this process
• The process isn't always well integrated with strategy and operations