Budgeting Basics and Beyond

22.9. Budgeting and the Balanced Scorecard – A Oxiteno Case Study^[]

^[] Source: Adapted from http://whitepapers.techrepublic.com.com/casestudy.aspx?&q=oxiteno&docid=133787

The Balanced Scorecard methodology considers the integration between Budgeting and the BSC as the major pillar in the management principles of a strategy focused organization: making strategy a continuous process (see Exhibit 22.12). With priorities clearly defined in the BSC, resources must be allocated according to the most strategic initiatives. The information provided by the BSC is used as premises in the entire Budgeting and Planning process.

Planning and Budgeting aligned to Strategy result in the following benefits:

• Support to the Strategy execution;

• Integration of the Strategy to the operational planning process;

• Planning and budgeting as value generators in the strategic management process;

• Management focused on Strategic Initiatives and on Value Drivers, not only on numbers;

  
  

• Support to resource allocation aligned to Strategy, simulating the consistency of the targets;

• Simpler Planning and Budgeting.

Background: The changing process in the Group's management

Before implementing the BSC, Budgeting was the management tool used at Grupo Ultra, a group that comprises the companies Oxiteno, Ultragaz and Transultra. ...