Two different organizational challenges require two different solutions. Similar to how budgeting applications improve operational performance, Modeling Intelligence (MI) allows organizations to set financially sound trajectories for long-term strategic visions. Institutions should use interdependent but separate modeling and budgeting solutions to yield the greatest financial success in the short and long term.
Strategic visions cannot be informed through simple operating budget projections. Some budgeting software solutions support this idea through “integrated” planning features inside of budget-focused applications. These platforms are built to support operational management, not long-term strategy.
The difference between strategic modeling and operational budgeting is visualized in the Financial Efficiency curve. Although budgeting software may include rudimentary planning and forecasting capabilities, those tools are far less efficient at analyzing complex strategic scenarios.