Are the current FP&A or Enterprise planning processes truly aligned across the organization? Are they setting the right direction for the organization to progress? What are the core drivers of planning they fail to focus upon? If these questions raised a doubt in your head on the effectiveness of the existing planning processes, then definitely you need to rethink them.

The importance of a robust planning process in management decision making and in driving the organizational performance cannot be stressed enough. No wonder the Planning process in today’s world gained paramount importance, unlike a few years ago. Let us clearly understand all the aspects of an effective Enterprise Planning in this blog.

This blog will help you get a realistic view of:

• The critical missing piece of the enterprise planning process
• What should the ideal Enterprise Planning process include?
• Importance of setting a Planning framework

Critical Missing Piece of the Enterprise Planning Processes

There are a lot of Planning solutions in the current market that promise exceptional performance through effective and collaborative planning methods. They make use of some of the robust machine learning and artificial intelligence algorithms to help flexible modelling, predictive analytics, seamless integrations, etc.

The current day solutions are far better than the conventional excel approach to planning. They automate a considerable amount of activities in planning. However, they are mere replacement of excel sheets instead of focusing on the key drivers of effective enterprise planning.

In today’s world, Organizations looking at improving their Planning process only consider automating the data collection process rather than looking into the core process definition.

Hence, the current Planning solutions are mainly used to:

• automate calculations that are previously done by excel.
• automate calculations that excel is unable to perform due to their complex nature.
• aggregate the data collected from different functions and bring a single version of the truth across the organization

The above functions are, no doubt, significant to enterprise planning as they increase the efficiency of the entire process.

However, these tools are more of data aggregation and data collection solutions than effective planning aids. These solutions even loosely use the word collaboration. In all these planning tools, collaboration is often restricted to data collection. The real power of collaboration in aligning the goals and activities of all business units is entirely missing in these solutions.

So, true collaboration in aligning the organizational goals is one of the effective planning best practices.

Now, let us understand the ideal approach to Enterprise Planning.

Ideal Approach to Enterprise Planning

There are various Enterprise planning processes like Opex planning, Capex planning, Revenue Budgeting, and Human Resource Planning or work force planning.

Irrespective of the Planning process, the whole purpose of planning is to define organizational objectives and break down these objectives into strategic initiatives & activities at the functional level.

Simply put, enterprise planning deals with two things:

• What an organization needs to achieve?
• What are the different initiatives or activities each function should undertake to achieve stated objectives?

Among various factors affecting ideal planning processes, true ‘collaboration.’ is the most important one.

This is the real collaboration that brings life to the entire planning processes of an organization.

Unfortunately, there is no attempt by organizations to collaborate on all the stated aspects. As mentioned earlier, collaboration is currently restricted to the data collection process wherein a static model is chosen for all the departments to key in the data.

So, setting up a ‘planning framework’ can help organizations achieve overall alignment in the enterprise planning process.

Planning Framework – Golden Circle of Planning

The Planning framework can increase the productivity level of organizations with an effective Enterprise planning process. It is the lens through which planning is performed and subsequently measured.

JustPerform addresses the planning framework of an organization through its Golden circle of Planning.

Before going further, let us first understand,

What is JustPerform?

JustPerform is a new generation, intelligent Corporate Performance Management (CPM) cloud platform. It guides enterprises and organisations in business planning, consolidation, and performance monitoring. It helps them analyse the results that matter, discover insights, and plan for success. Unlike other vendors, JustPerform focuses on letting business users at all levels drive CPM activities, empowering them with an intuitive interface and industry best practices.

JustPerform uses the Golden Circle of Planning to build a planning framework. The ‘Golden Circle of Planning’ addresses the three critical stages of Enterprise Planning.

WHY

This stage helps us understand the need for Enterprise Planning. The whole idea of this stage is to provide a leadership team and management with insights into key metrics that can impact the organization’s performance.

JustPerform provides reliable insights on the key metrics, based on the business reference models built on industry best practices.

HOW

Once the management is clear with the insights into the key metrics, the next step is to deal with the ‘How’ part of it.

JustPerform helps organizations define their metrics and drivers through visual value driver trees made of Planning Infoblocks. Value Driver Tree shows a clear linkage between end outcomes and underlying metrics that are relevant for enhancing business performance.

WHAT

While the ‘How’ stage deals with defining the metrics that evaluate outcomes, ‘What’ stage involves what data goes in each of the metrics. It involves deploying the Planning and reporting solution, gathering data of key metrics, identifying the number of people responsible to submit the raw data and the sources of data

‘What’ stage has been the primary focus of all the existing planning tools in the market. They can do a great job in data collection, data processing, predictive forecasting, and improving the efficiency of the process. But they do a little to tackle the other two critical steps in the planning framework.

No matter whether it is capital expenditure planning, operational expenditure planning or manpower planning, the ‘Why’ and ‘How’ stages in the framework need greater attention due to their ability to determine the effective enterprise planning.

No matter how efficient an organization is, if it is not in the right direction and if all the people are not aligned to its objectives, it cannot be sustainable.

The entire planning process cannot be top-down. An organization needs to empower people to participate and align with the Why, How and What stages of the planning framework.

The process discovery stage should involve all the business users in defining the value driver tree so that all are working towards the same objectives and goals of the organization. Force fitting the static models for people to key in the data and functional centric approach to the metric definition will not lead to desired outcomes.

In conclusion, a significant focus on ‘Why’ and ‘How’ stages of the planning framework, along with harnessing the power of true collaboration, helps in effective and strategic Enterprise planning.

JustPerform laid a path-breaking way to define a planning framework through its ‘Golden Circle Approach for Planning’