Question oneVerizon is among the telecommunications companies in America specializing in the provision of varied services and products within its market segment. The retail department is has been involved in the sale of broadband services, mobile plans, and mobile devices to its customer base. The budgetary planning process in this department has varied implementations that ensure its successful operations in terms of capital allocation, resource management, and monitoring of outcomes. The current planning process involves the implementation of cost reduction efficiencies, development of cost models, and allocation of resources based on previous projections depending on business processes and strategic demands.
In addition, the budgetary process provides approval frameworks so that its allocations are correlated to tangible targets as per the defined strategic goals of the telecom company. Since its inception, Verizon has defined its strategic goals as to be the best provider of telecommunication services and products, as well as ensure optimal customer satisfaction. With the efficient planning process, I was able to realize that allocation of resources relative to articulated objectives and strict review processes ensure that the overall budget planning process is oriented towards delivering the overall organizational strategic policies and objectives.
Verizon Telecom retail department is structured in a way that it interfaces with the financial department for efficient planning, control, and allocation of financial resources. This has formed the basis for allocation of responsibilities for its effective management and control. In this case, responsibilities are allotted with direct reporting frameworks aligned to operational units. The retail department is headed by a director whose responsibility is to establish annual budget targets, resource allocation processes, and planning processes that are in synch with overall organizational goals. Further responsibilities are given to unit leaders in respective retail sections across the country so that they can shape their units in accordance with specified targets from their top management.
Working with financial allocations even if limited defines budgetary management and control processes as in Verizon business. The effectiveness of allocating responsibilities is based on relying on individual expertise, using organizational goals as guidelines, and adherence to organizational structure to define individual goals. At every level, goals, targets, and financial requirements are assigned as responsibilities with a particular scope of operation adding budgetary effectiveness. According to Finney (2010), such allocation of responsibilities has made budget management and control in Verizon retail section an effective process where every participant knows income, expenditure, cost administration, and resource management relative to certain companywide strategic goals.
Over the years, Verizon’s retail process has been achieving its intended goals partly due to its ability to relate budgets to clear objectives, as well as succinct outcomes. In my research process, I discovered that Verizon has an effective structure for budgeting, planning, and implementation of retail strategies that generate the required outputs. It begins from the capital management group that is tasked with allocating funds for strategic initiatives and at the same time tracks budgets with high levels of aggregation. Allocation of resources from the capital management group is done relative to sales, cost, revenue, and market predictions depending on prevalent demand and supply dynamics within the retail sector.
As indicated in the company’s financial report of 2015, targets of approximately 3.6% growth, an increase in wireless retail by 1%, 8.6% growth in Fios revenues, and 3.5% growth in retail revenue were given for the current year. As of now, it is indicative that the organization related these afore-discussed objectives with budget targets with overall successes in their achievement in the third quarter of this financial year (Verizon, 2015). Due to the nature of allocations and current achievements, I can justify that there is high effectiveness in Verizon relative to relating budgets to clear objectives.
Despite the level of efficiency, allocation, movement, and control of the current budgetary planning process, there is sufficient room for improvement so that Verizon retail department can generate additional business benefits. One of the improvements is the investment in finance and retail technologies relative to budgeting processes. Small changes in the current process can make a large difference in accuracy, usability, and speed at which budget planning process takes place. Technology is a powerful tool which if used correctly and with appropriate controls makes the retail budget an effective tool for supporting definitive organizational goals.
Automation of workflows, threshold processes and optimal budget data management is another area of focus in order to improve consistency among all retail departments across the country. This can be done through the creation of templates and user-driven end applications so that the whole planning and budgeting process can be consistent, standardized, and accurate. Another improvement is to have a budgeting process that narrows broad goals into specific metrics and business plans through interactive discussions, verifications, and constant updating of business proceeds against the plans. This means that continuous reviews must be included in the planning process since they make financial processes healthy as the business evolves.
Different systems and processes are also being used to monitor progress against budgets and their intended objectives so that the necessary corrective mechanisms can be applied. To begin with, the total capital management organ is used to approve and track capita budgets at high levels of aggregation. All retail departments are subject to these reviews including any retail investments relative to particular goals. In addition, the network capital management group is responsible for developing comprehensive budget programs that must be followed by all departments as per the defined organizational objectives.
The process of monitoring progress is accompanied by a reporting structure where departmental personnel is required to keep their superiors updated. The procedure is to evaluate practical progress against the planned activities in the whole budget. In the case of deviations, corrective measures are implemented and reports are taken to the top decision-making organ for further adjustments into the main organizational budget. Managers are supposed to follow cost control procedures, resource optimization processes, revenue collection procedures, and revenue production techniques meant to provide incremental benefits to the company. These are then used to benchmark budgetary progress against the set objectives.
The process of monitoring and measuring performance against set objectives can be further improved to generate additional business benefits through effective control mechanisms. First, is the reduction of budget complexities and cycle time. By streamlining these aspects, the retail departments are able to collect information, make allocation decisions, and communicate target adjustments in less time. Through the company has different business units and management processes that must be harmonized from the budgetary perspective, it is important to reduce overall complexities where core functional processes are clearly defined, resources allocated, and monitored for further decision making depending on their outcomes.
Another improvement is the development of a budget that is accommodative to changes as the business responds to unprecedented industry changes. In fact, the capacity to hit targets should not be used as indicators of performance but the correlation between achieved and planned goals. Therefore, business decisions are supposed to be made using the financial reporting structure so that the organization can learn and adjust continually based on organizational progression. Another improvement is the reporting structure where individuals are supposed to communicate every budgetary deviation and monitor their performance against planned outcomes with higher efficiency and capacity to instantiate necessary adjustments.
- Finney, R. (2010). Essentials of Business Budgeting (3rd ed.). New York, NY: HarperCollins.
- Verizon. (2015). Financial highlights.