Zero Based Budgeting for Windsor Regional Hospital

Zero Based Budgeting for Windsor Regional Hospital

Introduction

With increased demand and exceptional growth in the past 10 years, the board of directors of Windsor Regional Hospital, have decided to restructure their current budgeting process with an updated zero based budgeting which could be implemented in order to appropriately respond to the needs and demands of their customers (patients).

Discussion

Implementation of Zero Based Budgeting

In order to implement zero based budgeting at Winsor Regional Hospital, the following implementation framework is required to be undertaking

First step

The first step in implementing zero based budgeting is to establish decision based packages (Carter, 1977) which will include detailed description and analyses of each item or activity involved in implementing zero based budgeting. In the development of Zero based budgeting for the hospitals such as Windsor Regional Hospital, it is important that the managers at departmental level that they understand the important processes which are required in order to make this implementation of zero based budgeting successful.

It is an attribute of Zero based budgeting that it is not based on the past years data. The managers are therefore, needed to provide data based on current results, and therefore, they are accountable for every money spent on any item or activity that is being done. With Zero based budgeting departmental manager are required to prepare themselves for decision making which involves taking tough decisions related to their department and the organization. At the initial stage, Windsor Regional Hospital needs to review all the associated programs from the perspective of its revenue inflows and outflows in order to successfully establish the decision packages required at the initial stage.

Second step

The first phase of the second step involves evaluating and analyzing the package by considering four important measures. The initial step in developing the decision packages is to review all current processes. This will particularly involve an objective appraisal of the benefits associated with the processes Windsor Regional Hospital would experience in the future.

In the next phase, Winsor should focus on eliminating ineffective programs. Any obsolete or ineffective program or processes within the Windsor Regional Hospital should be restructured or redirected. The restructuring phase will also include an improvement phase which will try to improve and bring efficiencies in the current obsolete processes.

The third phase of the second step is to develop aims or objectives for every process operating within the Windsor Regional Hospital. The existence of every program is based on the associated aims and objectives. The purpose for existence is being laid through the development of mission or goal. Moreover the objectives should be tangible. It is good to have noble goals, only a few organizations will put money into those programs irrespective of their low return from the goal.

The last phase of the second step will include policy making at departmental levels. This will involve active participation of departmental managers. The departmental manager will be able to rectify and detect any significant trade-offs and negotiating points which can ...