Cross-Functional Budgeting

A client group presented an issue related to serious disagreements between functional departments. The budgeting process  – not just the content – was a key component of the solution. Here’s an overview of the process.

How often do we
think about the budgeting process as a key opportunity for alignment? Not just
tops-down yearly priorities but the cross-functional departmental alignment. Do
you know what the priorities are of your internal customers? Do they know
yours? Are there gaps or incompatibilities?  The budgeting process is an excellent chance to identify
and correct.

The overview:

  • Restatement of strategic plan and priorities; clarify
  • Groups that drive the business create
    priorities and what they need for support from each internal department
  • Internal support departments (Partners) create a
    list of needs in order to maintain functional competency in their technical
  • Drivers meet with Partners
    and discuss their lists. These round robin style meetings take place over a 1-2 day
    period; attended by senior managers and key staff. Questions, answers,
    cross-functional dialogue occurs!
  • Drivers and Partners
    separately create budgets based on their needs and the cross-functional
  • Budget roll-up
  • Communication of budget, decisions, priorities and intentions; questions solicited and answered
  • Quarterly follow-up and debrief checking for new information and deviations from plan. What happened? Why? What decisions do we need to make now?
  • Debrief the process – not just the budget content – annually. What worked well? What could we improve?

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