Integrating plans; the priority for next generation business planning

Integrating plans; the priority for next generation business planning

Here at Anaplan, we specialize in catering for the needs of those who plan, no matter which line of business they happen to be in or what type of planning they do. So, when Ventana Research approached us to partner with them on a project about the future of business planning[1], naturally we jumped aboard. One of the big attractions for us was that the project was looking at planning across the entire enterprise and included respondents from front line functions such as Sales and Marketing (13%) and Operations (22%) as well as those working in support functions such as Finance (21%), HR and Legal (19%) and IT (24%).

Sure, some of the findings were exactly what you would anticipate. Spreadsheets continue to dominate; budgeting, planning, and forecasting are still disjointed activities. But, I am going to focus on what we thought were some of the most enlightening findings.

Planning Process Issues

Planning process issuesThere are a number of reasons why participants are dissatisfied with the way they plan. While none is more important than any other, they all appear to be rooted in the use of spreadsheets or ineffective software. This makes it difficult to build and maintain models and calls for skilled resources. As a result, the planning process is too slow, inflexible to change, and ultimately plans are not reliable. One suspects that most of the other issues that respondents mentioned, such as data availability, are a direct result of using planning tools, like spreadsheets or complex ERP modules, that are no longer fit for the purpose.

Plan accuracy

Ventana ResearchOverall, less than a half of the respondents said their plans were accurate or very accurate, with financial budgets judged the most accurate and sales forecasts the least accurate. While this is hardly surprising, it is perhaps one of the most important findings of the entire project. This is because the lack of accuracy in sales forecasts and marketing plans at the front end of the value chain can only be mitigated by reforecasting more frequently, to give other downstream departments the chance to adapt to fluctuations in demand. Unfortunately, as we referenced above, the planning process is too slow to provide such agility; once again constrained by ineffective software.

Importance of linking plans

Ventana ResearchWhile the majority (63%) of respondents recognize the importance of being able to share plans across departments, only a minority said their companies had the ability to establish automated links within a dedicated planning environment. The small number of respondents who reported having such a capability were more satisfied with their planning process.

So despite most respondents being aware how best to improve their planning process, today virtually all 11 of the most common types of planning activities are typically undertaken in a stand-alone fashion by the departments primarily responsible for them and receive little or no direct input from other parts of the organization. Similarly nearly half (47%) of participants reported that they have only a general idea of the impact of their department’s plan on the rest of the company, and just 14 percent said they can accurately measure that impact.

As only 29% of respondents reported that their companies have a budget that stays relevant throughout the plan period, integrating these currently disparate plans into a holistic enterprise model is perhaps the most important implication of the Ventana study. In fact, I’ll put my neck on the line and say it is likely to bring considerably more benefit than tackling isolated use cases such as financial budgeting.

To see more of the findings for yourself first-hand, download the executive summary, (registration required)

[1] Ventana Research. “Next Generation Business Planning Benchmark Research.” Published January 30, 2015.

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