What is business planning?
When Anaplan launched its IPO last fall, we commissioned independent analyst firm Nucleus Research to evaluate the total addressable market (TAM) for Connected Planning worldwide. Using data from the International Labor Organization (ILO), Nucleus determined that over 72 million workers worldwide are involved in business planning. This is an enormous number and speaks to the potential that Connected Planning has for changing business worldwide.
This week, Nucleus Research launched the Guidebook on Connected Planning with Anaplan, a detailed analysis that offers a deeper, more qualitative analyses of Nucleus’s initial findings. It explains why current customers chose Anaplan, outlines best practices for the Anaplan platform, describes the future of business planning, and elaborates on the many benefits that companies are receiving from Connected Planning.
It’s an engaging and forward-looking study, and I recommend a read!
In this post, I’d like to dig deeper into the enormous number reported by Nucleus: 72 million. How is it that 72 million workers are involved in business planning? Who are they? What does the size of this number tell us about the future of business worldwide?
I plan, you plan—we all plan
To explain how 72 million workers are involved in business planning, we first need to answer a more basic question: What is business planning? This question gets to the heart of what we do at Anaplan, and speaks to what our platform is doing for companies around the globe.
As Nucleus notes in its report, business planning is undergoing major changes. At one time, “planning” meant a once-a-year activity (potentially once a quarter) performed by a specific business functions, usually finance. The very idea of “business planning” implied a functional division: Some people in a company were responsible for making plans and the rest were responsible for carrying them out.
Today, Nucleus points out, this notion of planning is becoming increasing outmoded. This is due to a host of reasons, including the increasing pace of business, the effects of digital transformation on the worldwide economy, the ways information now flows around the globe, and the way the cycle of disruption characterizing the tech space has now penetrated nearly all verticals. Together, these trends have pushed companies toward two realizations:
- To stay competitive, companies are shifting planning from an occasional activity to an ongoing process.
- To stay flexible, companies are recognizing that “planning” describes activities in all business functions.
It is this second point that contextualizes Nucleus’s findings. Let’s examine it.
Connecting the enterprise by expanding the definition
When planning is viewed as a top-down activity, pivoting an enterprise becomes the equivalent of reorienting around a huge battleship or an aircraft carrier: It’s slow, painful, and cumbersome.
Today, companies still tied to this old process are falling behind. In today’s market, companies that can pivot with increasing speed are more likely to be successful.
To realize this goal, companies are quickly learning that it’s significantly easier to shift when the company can move as a single, connected organism. The goal today is to be less a lumbering battleship and more a nimble, connected fleet, quickly shifting formation when confronting a new environment, speedily reacting to changes in the market.
Achieving this state of constant readiness isn’t easy. Yet it may be the most significant way today’s businesses can prepare themselves for the future.
Crucially, the way to do this is to make sure that every single component of a company is constantly adjusting itself based on input from every department across the company. When decisions anywhere are built on input from the across the business (each part of which is also changing dynamically), shifting the enterprise to accommodate new information isn’t a cumbersome task. Rather, it’s built into the way the company functions.
Planning is everything
So how are companies doing this? The most advanced ones are achieving this state of constant readiness by putting the entire company on a single platform that ensures the free flow of data and information across functions and units. But doing this requires a more fundamental shift. That shift is to acknowledge the point above: Business planning isn’t what a few people in a company do. It’s what happens in every unit in the company.
As Nucleus’s Guidebook explains, companies who are increasing their flexibility are those that view planning not as the purview of a small number of stakeholders, but as a distributed activity that happens across the enterprise. This includes:
- Sales, who plans when they forecast sales, create territories and quotas, develop compensation plans, and segment accounts
- Finance, who plans when they set budgets, forecast revenues, perform profitability analyses, and provide guidance to the rest of the company
- Supply Chain, which is responsible for demand planning, supply planning, and inventory and merchandise optimization
- HR, who plans when they forecast headcount, succession, and set global compensation
- IT, who plans when they set budgets and analyze current and potential systems
- Marketing, who plans when they base campaigns on ROI analyses, forecast pipeline influence, and project budgets
These are only some examples. Put together, these spread-out forms of planning combine to form an entire enterprise.
In the modern enterprise, each business unit may still be responsible for its area of expertise. But each business unit is able to think faster and see further around corners when it knows what the rest of the company is thinking.
Put differently, planning today isn’t a just top-down activity; it’s also a bottom-up, sideways-in, round-about, through-the-middle activity, tying the whole company together.
72 million—and beyond!
Once companies recognize that planning happens everywhere, it’s only a short step to figuring out how to make sure that all these planners are working together, all the time. The way to do that is to put all of them on a single platform built specifically to enable this kind of connection.
So who are these 72 million planners? In short, they’re everyone. They’re located in every area of the company. As Nucleus Research indicates, the job of every single one of these planners becomes easier when he or she is connected to the rest of the enterprise.
As companies start to incorporate these shifts into their planning processes, we expect that 72 million may ultimately be an underestimation of both the number of business planners and the number of people whom Connected Planning would bring increased flexibility and productivity.
To learn more, read the Nucleus Guidebook, or learn more about the Anaplan platform.
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