Investment project management paradigm: budgeting challenges

Abstract

Introduction. The paper discusses methods of investment capital budget management, which adapts budget management practices and increases synergy with project management, adjusting the allocation of resources in accordance with the constraints and operational risks of business processes. Businesses regularly use project management to achieve unique results with limited resources under critical time constraints. In the service sector of the economy (in particular, trade), the use of project management to achieve organizational goals is even more common. The purpose of the paper is the application of the budgeting system in the management of the investment project. Results. As a result, it encourages flexibility in dealing with contingencies, focus on a strategic perspective, speed of budget management, cost-effective budgeting, added value to the enterprise and encouragement of collaboration. Thus, constraints can be operational or managerial, related to organizational politics and culture. To identify constraints in an organization, you must understand how the organization works as a system. In the business sphere, the functioning of the company is a vision of business processes. Business processes are sets of activities that create results (products and services) whose value is perceived by interest groups (stakeholders). The impact of deterministic decisions in the short term on the overall result of the organization decreases. However, budget management methods do not represent a probabilistic approach, as seen in the proposal of the critical path method as a means of improving project management in a volatile business environment. Conclusion. It is recommended that each capital investment of the organization be structured in the form of projects, and the method of rewarding managers should also reward those who achieve goals with minimal use of investment resources. If possible, the manager should strive to evenly return resources to investment capital. Finally, it is suggested for future research to identify other business practices that can benefit from this paradigm shift.