A successful business envisions a continuous progress through a strong sense of planning and implementation. The planning phase is a crucial part of performance management wherein the business path is determined by using variables that affect performance. While it’s true that there is no straightforward path to success, there are things that the management should do to improve the resilience of the business to reach its goals despite possible difficulties.
In a growing company, things are dynamic and move quite fast. Many CFOs think that planning is burdensome, yet a company-wide involvement is still the best way to act. Progressive thinkers would like to simplify the process, but at the same time gather the real results needed for decision-making. The automation of planning, budgeting, and forecasting is a game changer in performance management. It enhances planning and implementation as it reduces time spent, decreases probability of errors, and encourages collaboration between workers and their managers.
There are a few things that planners can do to eliminate activities that give little to no value in the realization of business goals. The following guidelines lead the company to create workable and timely plans that address the needs of the business. Stepping up from traditional planning schemes which are mostly burdensome to implement requires new technology to aid in the process.
Focusing on the Best Practices
Planning software must remain true to its essence: to enhance efficiency in process implementation throughout the company. Moreover, planners should be able to align the technology to the strategies to realize the plan.
Coordinating strategies with operational plans.
Many CFOs are engaged in the decision-making process. Make sure that the strategies are in harmony with the operational plans since delegation of tasks would involve department managers who are technically running the business from day to day. Finance professionals must establish good communication from the managers to see if strategic plans are implemented well in specific departments.
Reconciling Top-Down and Bottom-Up Targets
In new performance management strategies, the workforce is an essential part of the plan. They need to perform a set of tasks targeted to the goals of their managers. To paint a better picture of this practice, consider a department head laying out and defining specific goals for the workforce to perform. In turn, the workforce devises a technique to fulfill the tasks in a given time frame. Both the department head’s and the workforce’s plans are geared towards a general business goal which cannot be achieved unless there is proper task delegation.
Such plans are supported by the Senior management since it is their job to oversee the alignment of strategies and operational plans.
Building Driver-based Business Models
Business trends change from time to time and sales trends are not always linear. In fact, it rarely is. Using past data and implementing it in present actuals may not fit perfectly to the current trend. Companies are tied up to fundamental business drivers which may vary from one business to another. These business drivers will give managers a benchmark to balance out the factors to optimize profits. Operations managers can refer to the business drivers that cause the fluctuation in sales. Through Finance, department managers can create a realistic plan by gathering factual baselines from past actuals.
Working in Coordinated Teams
Perhaps, the best thing about modern planning, budgeting, and forecasting is collaboration among teams with specific functions. Broad strategic goals are simplified by managers depending on the type of department they belong. Specific tasks are further identified for the employees.
Collaborative planning will help the working team identify the needs of the business, what activity should be discarded, retained, and improved.
Periodic Re-forecasting and Rolling Forecasts
Economic developments give businesses various pressures that may change expectations from time to time. Ideally, businesses implement forecasting reports on a bi-weekly or monthly basis, depending on the movement of the market sales. A good forecasting should be able to answer questions on how the business will adapt to the current trend or point out techniques and strategies to optimize sales.
Rolling forecasts should target long-term projections that may give insights for near-term future. Data gathered on various departments will provide estimates of what can occur in an immediate future. Action plans are reiterated and revised based on the forecasts to increase likelihood of success.
On Using Planning Software
Planning is an ongoing process. As long as the business is gaining forecasting should be able to tell where the business is leading and make it flexible for changes. One of the challenges of traditional planning is the amount of work needed even in the early stages of the process. Data gathering itself is already time-consuming and may not match the fluidity of market movement. Forward-thinking business planners have switched their planning process to analytics, modeling, contributing, and reporting. This planning cycle makes it easier for them to decide on revisions for their action plans quickly as needed.
Designing a smooth-flowing plan requires technological tools that can support an adaptive approach. When selecting planning softwares, planners and decision makers should see to it that the software:
- is flexible to frequent changes of inputs
- provides current data
- comprehensively consolidates data for easy interpretation
- is integrated with a more general platform
- encourages collaboration among working teams anytime and anywhere
- is led by Finance to monitor developments
- saves time of all those who are involved in the implementation
- is relevant to the fundamental business drivers
- promotes accuracy in data reports
Planning, budgeting, and forecasting software are best evaluated not only with their features but also on how the features are implemented and measured by the results they provide.
