What challenges do companies face in business planning? What issues will shape the coming years? We provide an assessment of the challenges and trends in business planning for 2021.
The importance of good strategic business planning has been growing rapidly in recent years. Especially in the context of the current coronavirus pandemic, effective and flexible business planning is an important milestone for long-term success.
Above all, integrated corporate planning is becoming increasingly important in this context and illustrates all the more clearly that the better the planning is integrated, the more accurate a company's results will be.
The following blog article reveals the challenges and trends that your corporate planning will face in the future. We draw our knowledge from our many years of experience in optimizing and implementing planning technologies. Here's what you can expect in our blog article:
Challenges of corporate planning
1. Flexibility
2. Integration
3. Manual silo planning
4. Architecture
5. Effort for users
Trends in corporate planning
1. Fast planning cycles
2. Integrated corporate planning
3. Driver-based planning
4. Agile planning
5. Smarter systems
challenges
Flexibility
Traditional solutions are often designed to last "forever." Complex structures have been created at great expense. Changes to the process or data model lead to long development times. As a result, the planning process can quickly become outdated. Sooner or later, such architectures will struggle to gain user acceptance.
integration
Business planning consists of many sub-plans. It is a problem if these sub-plans are not sufficiently integrated. This does not mean that all sub-plans must run within one system. That would be unrealistic. However, the sub-plans must be coordinated in terms of content, organization, and technology. Only then can a harmonized overall plan be created.
Manual silo planning
The most commonly used planning application is Excel. This may be the right approach for very small companies. However, there is a risk that a planning system will be set up that is only managed by a few experts. As complexity and the number of participants increase, implementing the planning system becomes very time-consuming. Integration into a comprehensive reporting system poses an additional challenge. This quickly leads to isolated solutions that no one is fully familiar with.
Architecture
When sub-plans are implemented in many different systems, the result is a very heterogeneous system landscape. We have often seen that interface management becomes very time-consuming over time. This quickly makes efficient and fast planning processes impossible. In addition, some planning is still based on old technologies that cannot adequately meet the requirements of the planning process and users (e.g., the ability to perform simulations, etc.). This further reduces acceptance within the company.
Effort for users
Regardless of the technology, we repeatedly see how the most important participant in the planning process is left alone: the planner. Simple input masks are provided in which planned values are to be entered. However, the process of creating planned values is not supported. Improvements could be achieved through intelligent forecasts and associated analysis options. The result is a lengthy process of creating planned values that requires a great deal of manual effort. This costs an unnecessary amount of time and prevents shorter and more efficient planning cycles.
trends
Faster planning cycles
If planned values are to be useful, they must not be outdated. Traditional annual planning is increasingly being supplemented by scenario planning and is thus becoming less important. In many industries, faster planning is needed in order to be able to react quickly (e.g., retail). Planning is becoming more complex, but the potential benefits justify this. It is important that each planning cycle runs as quickly and efficiently as possible.
Integrated corporate planning
All sub-plans in a company's planning are based on the same principles and are fully integrated. This avoids unnecessary effort in coordinating sub-plans. The better integrated the planning is, the more accurate the planning results are, as a rule. That is why many companies pursue the goal of fully integrated planning.
Driver-based planning
Planning processes can be significantly accelerated by setting up driver-based planning, because each update of the planning data is faster. This allows for a quicker response to changes. In addition, simulation calculations can be carried out more easily. The focus here is less on 100% accuracy and more on the ability to adapt quickly.
Agile planning
Smarter systems
Planning tools must respond to the challenges and trends mentioned above
. The tools must not only become more flexible, but also "smarter." Machine learning and predictive planning approaches are currently changing the market for planning tools as well as for classic BI solutions. Statistical methods and machine learning improve forecasts and can help speed up planning processes through increased automation. The technology has now reached a level of maturity where predictive planning approaches are feasible and relevant for many companies.
WHICH PLANNING STRATEGY IS RIGHT FOR YOU?
Work with an ISR expert in a free workshop to develop ideas and initial steps for your individual business planning. Click here are the workshop details.
Summary
To remain competitive, companies must move away from traditional, time-consuming planning processes. Simply replacing manual Excel-based planning with a systemically integrated input mask is not enough. The aim is to substantially optimize and accelerate planning processes.
Plans must be able to respond to changes faster and better than before. Otherwise, the plan will already be outdated and worthless by the time it is created. Modern planning solutions are often department-oriented and can be flexibly adapted to changes. The self-service "BI wave" does not stop at planning tools. At the same time, these solutions support predictive planning approaches to automate planning processes more or at least speed them up significantly.
Valgeir Saevarsson
Managing Consultant
SAP Information Management
Valgeir.Saevarsson@isr.de
+49 (0) 151 422 05 422
