Budgeting should not be separated from business planning.

Managers cannot forecast costs if they don't know what business will be conducted in the year ahead, and how it will be executed. In simple terms, you have to know how much you are going to "sell" before you know what resources you'll need.

Anecdote: Operational Planning
why operational planning, budgeting, and rate setting must be a single, integrated process

Without a linkage to a business plan, the budget can be nothing more than a trend based on past years or a wish-list of things the organization wants to buy without justification. Such unfounded budget proposals -- not based on the investment opportunities at hand -- cannot support a fiscally sound budget decision process.

White paper on how budget decision making should work....

An effective planning process begins with an operational (tactical) plan that defines what the organization will deliver in the year ahead. Based on this business forecast, it plans how it will produce those products and services, and what resources staff will need to do so. This is the basis for a budget.

The FullCost process develops a business plan, translates it into a budget, and then derives rates -- all as one integrated process.

Steps in the planning process....

Independent research report: IT as a "Business Within a Business"
Vision, Financial Processes, and Systems
(the difference between planning tools and actuals accounting systems, and analysis of planning software products)

Overview: The difference between planning systems and cost-modelling tools....

White paper: Where To Build Your Product/Service Cost Model
within your planning tool or your actuals-tracking systems?

Column: Business Planning....