Saturday, December 27, 2008
Enterprise Architecture and Budgeting Worst Practices
How come we do budgeting based on activities vs outcomes? Is it because we get it twisted and mistake the budget for the plan and not acknowledge that the budget is supposed to be how you intend to invest to achieve your objectives?
Outcome-based budgeting is developed based on aligned goals, strategies, priorities and performance measures, as defined in the budget and other planning documents and actual resources (money) are allocated directly to achieving the stated goals. By assigning money to the anticipated outcome itself, enterprises can clearly communicate its priorities and can then go about “buying” results to those stated goals.
Outcome budgeting enables policy discussions and encourages questions such as:
- How much of this service do we provide?
- Did we achieve our target?
- How can we more efficiently achieve our goals
- How should we prioritize our goals to achieve the best results for our enterprise?
An outcome-based budget not only allows for more informed decision making, it also makes enterprises more transparent to those in the business as well as within IT. In order to noodle this deeper, you have to ask yourself honestly whether you understand how budgeting works in your enterprise and how clearly do you believe it communicates the priorities and how money is actually spent...
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