BEST PRACTICES MATRIX
Vision and Strategy

High USAGE Percentage of companies that use a practice Low

Quadrant IV Quadrant III Expected Measure performance against strategic goals Allocate cash resources toward efforts that increase long-term company value Tie employee incentives to measures other than meeting budget targets Provide managers with support systems, tools, and training that facilitate the budgeting process Have a detailed budget or forecast ( e.g., forecasting P/L activity all the way down to net income ) prepared prior to the start of the fiscal year Use budgets to monitor performance Align performance measures of senior executives with company goals Proven Monitor key assumptions about the business environment Benchmark against competitors Quadrant I Quadrant II Innovative Develop budgets that accommodate contingency planning and changes in assumptions Quantify the cost of the budgeting/forecasting process Differentiated Create a small, balanced family of measures that address Cost, Quality, and Time across organization, processes, and people Establish effective processes for obtaining formal, relevant information about the external business environment Use activity-based budgeting and costing to link costs to key drivers Have a written, long-range strategic plan Link capital and operating budgets and tie both to the company's strategic plan GAP High Degree to which the percentage of high-ROTA firms using a practice exceeds the percentage of all companies using it Low