Have you heard any of these before? Or other statements similar to these:

If its in your program budget already, you can afford it, otherwise you’ll have to submit a proposal for an exception approval. Do you have contingencies built in? Did you bake in a buffer? Running the risk of being over-budgeted and under-utilized? Better spend it – if you don’t use it, you lose it. Is it cap-ex or op-ex? If its cap-ex, you can live through a bad quarter but if its op-ex you’re probably out of luck. Do you have a business justification, a business case, an ROI? Was it validated by the stakeholders from each and every business function that’s going to see some benefits from the program?  What happens in case there’s a new development, like an acquisition? Who assesses the impact and how does it get factored in? What about integrations and cross-program dependencies? How about stuff that was classified as foundational – to be leveraged across multiple programs?  Is there an allocation mechanism? Who pays for those? Not my problem.

Welcome to the budget games.

We estimate that up to 20% of executives’ time in Fortune 1000 companies is spent on budget games. And that’s for non-planning months, i.e. not during the annual planning cycle. Depending on the scale, scope and complexity of the organization, the run-up to the annual planning cycle may take up to 80% of executive bandwidth. What goes into these activities? Well, it appears that despite all the investments in systems and data, there’s not a whole lot of reliable information available to support these decisions. Why? Because most of the data required is related to budget vs. actuals. And most budget-related decisions are based on numbers and negotiations sitting outside any business application or enterprise system.

And since most annual planning and budgeting exercises in the large enterprise still operate on a top-down basis with assumptions that are outdated almost the same moment they’re discussed and finalized, most executives get stuck with commitments and projects they can’t address with the final allocated portions of the budget pie.

Or to paraphrase John Lennon, spending is what happens to you while you’re busy re-visiting budgets.