Planning is a little different. For one thing the process itself is often
defined differently across companies. One company might think of planning as
encompassing everything from strategy development to operational planning and
quarterly forecasting, to management reporting and performance scorecards. For
another company, planning might mean nothing more than developing departmental
budgets once a year. A declared "best practice" for this company may
simply mean than it's able to consolidate its departmental budgets faster.
While that's a good thing, it may not mean as much to another company that's
looking for a way to link strategic planning with concrete operational plans -
its goal for a best practice.
That brings us to another point. The performance measures for the planning
process vary far and wide. Of course cycle time and FTEs (Full Time
Equivalents) are often used, but once again these measures may not be very
comparable across companies, given the many different ways companies define the
process. Obviously a company that defines the start of the planning process
with the initiation of strategic planning, and ends it with the final approval
of next year's budget, will define their cycle as being longer than a company
that doesn't consider strategy as part of planning.
Are these efficiency measures, like cycle time and FTEs, all that meaningful?
Improved efficiency implies reduced costs, and that's always welcomed. But is
that the only goal? If it is, then seriously consider halting planning, and
you'll be able to realize 100% of your goal overnight. Unlike Accounts Payable
or Accounts Receivable, there is no absolute necessity for the process, is
there? The real purpose of planning - which companies can easily lose sight of
- is to improve decision making. Better planning also provides powerful
foresight, more focused execution, and improved operational results. Are these
benefits captured in measures like cycle time and FTEs? Obviously not, and
that's the reason why these measures - although helpful - are inadequate on
The point here is that the term Best Practices as it applies to planning should
be taken lightly and not absolutely. The five Best Practices that are described
here are the most widely discussed solutions to better planning, and most
likely are the ones you've heard of. Consider them as providing some degree of
insight and innovation, and most certainly "food for thought".
Use the links to the right for the approach you're most interested in. You'll
find a brief description and a summary of pros and cons. If you want to add
your own opinion or experience, you'll have the opportunity to do so.