The world is facing a sharp economic contraction due to the coronavirus epidemic. The biggest challenge for organizations is to address uncertainty. Agility can help you shift plans and operate in uncertain conditions. In this article at Harvard Business Review, Darrell K. Rigby, Joost Spits, and Steve Berez explain how finance teams can initiate agile budgeting to survive the crunch.
Agile budgeting brings a unique variation in traditional costing. It demands adapting to the available business resources by maintaining a transparent yet accurate project budget. Even in the most fragile times like this, agile budgeting can bring a visionary transformation. Here are the three essentials to keep in mind:
Shift in Objective
Most organizations have ditched their original strategic plans for 2020 to cope with the sudden economic imbalance. Accelerating client pressure, flawed supply chain, and unprecedented social restrictions pose a significant threat to businesses. A flexible plan and budget can improve yours.
Shift Your Focus
By forming an improved strategic portfolio, you can function within an estimated budget. Aligning the existing business resources with strategic priorities may help you get better returns. Managers accountable for strategic results must take advantage of the available resources to trade off anticipated outcomes.
In a limited budget, adjusting a vital project becomes difficult. Clients want quality and accuracy while the team faces struggles with limited resources. Even a minor issue becomes major in a limited time and budget situation. Only flexible planning can save you cost, effort, and time. Agile leaders should allocate the available resources to innovate and generate improved ideas. Determining tricky objectives with flexible plans can make agile budgeting a considerable accomplishment.
Click on the following link to read the original article: https://hbr.org/2020/08/an-agile-approach-to-budgeting-for-uncertain-times