Fiber Limited is a provider of managed networking solutions and fibre networks. The chairperson of the Board commented as follows at the last board meeting: "The annual budget is just so frustrating.
You spend three months doing it — you probably start in August or September to prepare the budget for the next year — and inevitably by the time you’re done its old news. It doesn’t provide a foundation for an agile company … When you have to manage to that stale budget throughout the whole year, it becomes worse than useless. The budget becomes destructive. We need to do something different." The CEO supported the view of the Board by saying, "Our people spend less time running the business, as they rather worry about insignificant budget variances".
Required:
Prepare a proposal to the Board scrapping the traditional budgeting process and replacing it with a different solution called "beyond budgeting". Highlight the problems with existing budget process and expand on the implementation aspects and benefits of an "beyond budgeting" approach.