Having worked with so many clients across various verticals and countries around the world, one of the theme which I have consistently observed is that Planning Systems are essentially being used to post the final plan figures for management reporting & tracking purposes instead of being used to arrive at the plans.
While today’s planning system have solved the problem of consolidating the figures via various methods of aggregations however they have not done much justice in supporting the process itself which goes into formulating the details of Business Plans which has resulted into the fact that “Planning processes are broken today”.
Typically the process works as formulating the plans, maintaining drivers & assumptions & collecting inputs from different stakeholders which is often done outside usually in a spreadsheet based environment. These plans once collected from different stakeholders is then made ready for upload into the Planning systems for submission to facilitate the reporting cadence and tracking of performance.
Let’s take a deep dive into the reasons behind such a behavior:
Planning Systems are not very flexible:
Typically the planning systems are not considered to be as flexible as spreadsheet where in the different drivers can be easily maintained to formulate the plans.
Variations in the process of formulating the plan:
The process of arriving at the plans may vary significantly from previous to current years and subsequent years. Within the planning processes itself the ways Budgets for the next years are formulated may be different than the process of arriving at the yearend forecast with different level of details captured within each of these processes. The tricky part is this variation or changes are applied only for the new processes while keeping the past processes intact
Autonomy (control) over the planning process:
Planners all over the world, feel more autonomous by having their processes in a controlled spreadsheet based environment instead of putting those in a planning system
Generation of reports for management presentation
In addition to above, the management always want to look at different things in their reports at different point in time. Reporting is one of the most important outcome of planning processes, as management spend more time analysing the reports. The general tendency of a planning analyst is to download the data from planning system, have another set of data as reference to deliver the management the reports they need.
Ownership of Planning System:
Ownership of the planning system is typically with the Group Finance or Management Team having an objective of consolidating the plans from the various Line of Business (LoBs) or Entities or Business Units or departments to support management reporting.
Inflexible Planning System：
Make planning system flexible, easy to Use & manage changes as Business keeps evolving
Variations in the planning processes :
Built in flexibility to handle variations in the same process for planning cycles or allow to have variations while retaining the past methods of arriving at the plans
Implementing the variations should be done by the Planner itself instead of hiring a Technical Consultant to implement those changes. There is a general tendency to revert back to spreadsheet simply to save on the spend ($) in hiring an expert to implement the changes
Lack of Autonomy :
Give more control by making the planning system more flexible & more adaptive, having identical experience & ease of Use as of the spreadsheets
Reporting Concerns :
Planning is performed less frequently while reports are analysed every week /every day in certain cases
·Flexibility to report based on different perspective from Management demands is the single most critical requirement of any planning system
Move away from classic GL based variance reporting to smart ways which shows “Good Vs Not Good performance”
Ownership Issues :
Ownership at group, various lines of Business (LOBs), Business Units down to various details which goes into arriving at the various plans
These resolutions when applied would result into planning system which is connected, each of key stakeholders are really looking at “Single Version of Truth”
An evaluation of any planning system should be done keeping the aspects of flexibility, adaptability, autonomy, ease of reporting & ownership needs as critical factors before selection of Planning, tracking & reporting systems.
With above in place, we can envisage of a world in which Planning processes are deeply connected, performed inside the systems end to end, with smooth experience to formulate the Business plans at various levels. The entire process can be depicted as in screenshot below:
A little disclaimer: This is a personal weblog. The opinions expressed here represent that of my own and not those of my previous employer(s)
About the Author:
Umesh Biyani has over 15 years of work experience in Enterprise Performance Management and Analytics. He holds a Masters degree from IIT Roorkee, and had worked at Anaplan as Director of Customer Success - APAC, prior to that was as Partner and Client Director for EPM Consulting Organization based out of Singapore. He specialized in working with CFOs and finance organization to define their EPM vision. Besides work, Umesh enjoys the gym and meditation.