Build a New Budget Model that Advances Your Institution’s Strategic Goals
Many institutions are considering wholesale budget model changes to reinforce financial goals and strategic priorities. While models like responsibility-centered management (RCM) have gained popularity in the past decade, there isn’t a uniform “one-size-fits-all” model that every institution should emulate. Instead, leaders must design custom models that align with an institution’s unique strategic priorities, mission, and culture.
Understand trends in budget model design
Changing budget models is a time- and resource-intensive process. Before determining whether to switch models, senior leaders should understand trends in budget model design and acknowledge what changing models will—and won’t—help them accomplish.
Expert Insights
While some institutions are changing models in response to current pressures, others are proactively doing so to reorient institutional decision making and build resilience against unknown, future threats. Of course, changing the budget model is not a panacea that solves all institutional problems.
All models require strong executive leadership and direction to be successful, as well as sufficient IT and data capabilities. Nonetheless, the budget model can create a decision-making structure for long-term success and alleviate some of the problems associated with shared governance.
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