Wednesday, April 30, 2008

Instant Continuous Planning: Just Add Water

It's a strange feeling when personal and business lives intersect, and as I sit down to write about the value of continuous planning cycles in the business process, I am struck by recent personal experience.

It's March 25th, 10 pm, and I am sitting on the floor of my home office, a cardboard box beside me, as I stack piles of receipts, 1099s, stock sale receipts, etc in preparation for tomorrow's tax meeting with my accountant. I really don't know what to expect from this meeting – where am I in relation to the plans I set in January 2007? I could swear that I sat in the same place last year promising myself that I was going to improve this system.

And while some of you may relate to my experience (hopefully, as misery does love company), it gives me pause to think that, on a much larger scale, many of our corporate planning cycles don't fare much better. As a business director responsible for budget and planning cycles, when do you start your process? How many annual/monthly/weekly iterations do you go through? What is the effect of business change on your planning cycle? Are you feeling like there's a cardboard box beside you, yet?

With the demand for businesses to adapt quickly to changing markets in order to stay competitive and operate at maximum efficiency, we have seen significant streamlining of the planning process in recent years. In parallel, we've seen the tools and supporting infrastructure technologies become more sophisticated and robust in order to support operational and reporting needs. With pressure to move from a lagging to leading view of the business, we've evolved from annual budgets, to quarterly planning, to rolling 13 month plans and now we're recognizing the need for a continuous planning cycle that provides an accurate, real-time view of our operations.

I often hear that the concept of continuous planning in a fast-changing corporate environment is a Utopian vision rather than a realistic goal. And yet large, dynamic companies such as Symantec and Yahoo have successfully implemented continuous planning cycles into their business processes. So how do they approach this? What tools do they use? How do they measure results from their planning process?

Implementing a continuous planning cycle in your organization is not about buying a tool. It's not about agreeing to a process during a management meeting. Continuous planning requires the direction and support of the entire management team to reinvent the way the company approaches the planning process. It needs management to create a chain of accountability throughout the organization, from C-level to individual contributors; every person knows their role, their goals, the company's goals and where they stand in relation to meeting those goals. Continuous planning requires the implementation of best practices and an effective process within the organization, as well as the tools to support the process.

A successful continuous planning process requires collaboration between executive management, finance department and operational teams:
1. Define strategic goals.
2. Create plans, rolling forecasts & budgets for all levels of the
3. Roll out, analyze against execution & provide feedback loops.
4. Model & realign plans as needed.
5. Monitor & report, with audit information for regulatory & statutory
reporting requirements.

In a continuous planning cycle, steps 3 & 4 are iterative and constantly changing, driving the need for updated information to be delivered to the desktop at a near real-time rate.

To Be Continued... The Secret Sauce in the Technical Details

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