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In the article All Together Now in the Feb 1 1998 issue of CFO Magazine the author Cathy Lazere explains why budgeting and forecasting must be linked with planning and performance Most managers despise the thought of budgeting and forecasting because the processes are so time consuming The two are seen by management as a way to appease the people at the executive levels The main problem is that budgeting and forecasting are not usually linked with strategic planning and performance measurement In a survey many readers of CFO Magazine stated that a lack of a clear strategy was the main reason that they only put forth a small effort in their planning stages These same respondents said that the strategies their companies have instituted generally are not linked to the operational plans for the company In another survey conducted by the magazine over half of the people surveyed stated that the planning for the company is more dependent upon politics than it is on strategy There are however a number of steps that a company can use to improve the relationship between budgeting forecasting planning and performance The first step is to limit and standardize planning data Almost every company has a large number of performance reports and huge budget reports Standardizing these reports could lead to less data that individuals would have to work with Another step would be for a company-wide sharing of information Most information is kept in its department and it usually is not shared on any real-time basis A third step would be for the entire planning process to be linked to strategic planning and compensation As of now only about 60 of companies connect strategic planning and compensation Only about 20 tie compensation to forecasting The main question that has been asked concerning this subject is Can business planning really be reengineered It is thought that is can be to a point As long as
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