There are many ways to classify budgeting models (Barr and McClellan 2011; Goldstein 2012), but our concern here is linkage with planning.
* Structural budgeting models create environments of particular scarcity because all existing resources are allocated and nothing is free to direct to new priorities.
"In addition to replacing homegrown, manual Excel reporting and budgeting models
, we see a rapidly increasing number of companies in need of replacing antiquated legacy corporate performance management (CPM) tools like FRx, Forecaster, Cognos TM1, Hyperion and MicroStrategy, and BI360 is a natural upgrade path due to the deep, live ERP integration as well as a familiar Microsoft Excel and web user interface," said Mike Applegate, Chief Technology Officer at Solver.
The treatment of these three essential components has changed over time as various budgeting models have been developed and tested to provide a logical basis for committing resources to further the organization's mission.
The SBM was designed recognizing the three necessary components underlying all budgeting models. The SBM incorporates the inherent variability of the resource Inflows and Outflows and in that sense is robust; it is recommended these resource flows be calibrated for the various time horizons using the standard Present Value model so as to provide comparability across projects.
We will mention this in the summary section as it is the usual nature of all budgeting models to balance the financial aspects with the outcome aspects planned for the future.
It is our aim to offer a practical survival guide, under the rubric of "budgeting with a view to sustainability." We present the Sustainability Budgeting Model (SBM) in the context of a department of nursing (DN) of a major hospital.
We use hospital as the example in this article; however, the proposed sustainability budgeting model is useful in any health care organization faced with allocating scarce resources.
Following we will (a) review the development of budgeting, particularly in the not-for-profit sector, to understand the successes and failures and so understand the challenges in developing a workable budgeting model where sustainability is the calibration measure of choice, (b) discuss an overview of the components of the SBM, (c) detail these components and provide an illustrative example of the SBM, and (d) discuss the future developments that may impact the implementation of the SBM.
We will review in modest detail the historical aspects of budgeting as this will offer some general indications and information regarding implementation of the sustainability budgeting model that we will then present in greater detail.