Around 80% of the issues that are discussed in a corporate planning project are totally tool-independent. More than that, the value added of introducing a new tool typically comes from a process redesign rather than from the tool itself.

 Quite frequently planning projects start as IT-projects. Companies want to get rid of their spreadsheet-based planning, they want to implement a central tool that offers a better control of master data, that makes data collection and consolidation easier and that offers better reporting capabilities. In many cases, the starting point therefore is a tool decision. The company starts looking for a tool that “offers the best functionalities to improve our planning”. Specification teams in the central departments define checklists on the features a tool should have. Does the tool offer simulation functionalities? Can the tool provide currency conversions? Can hierarchies be used for distributions? Is there a scenario functionality? Based on that checklist, Proof-of-Concepts are done to compare tools and to finally select the “most suitable one”.

Once the project starts you will see that many of the discussions that are upcoming are totally tool-independing. They are questions noone asked when the checklists for the tools where prepared, even though a functional specification might have existed beforehand. Questions that arise because a previously unstructured process now has to be transformed into a structured process that is to be implemented in the tool. The interesting fact is: No matter which tool you selected, you will mostly end up in very similar discussions. This is because introducing an integrated planning process always has similar problems. As the new tools are pretty sophisticated and offer various customization options and programming interfaces, the tool itself is hardly ever a bottleneck in fulfilling the requirements. Some tools might suit better than others and might require less adjustments. But below the line, the tool itself does not matter THAT much.

One might think that this is not a very welcome statement for tool-suppliers which want to sell their product licenses. But this is not the case. We are not saying that new tools do not bring benefits. What we are saying is that a high percentage of the value added is not coming directly from the tool, but from the implementation of adjusted processes. Any tool-implementation project forces a company to think about the processes that are to be implemented in the tool. And this is where the levers to real improvements are hidden.

The implementation of a new tool gives a chance to rethink how planning is handled in the company. It would therefore be a wasted chance to run a tool-implementation solely as an IT-project. Instead, our advice is:

1. Develop an honest view on the status quo of planning

Is planning effective and efficient today? Too often the responsible persons will just say ‘Yes, of course’ at that stage. Don’t run over this step too quickly. Make yourself aware what purpose planning has for the company. Is this purpose fulfilled today and how much effort is spent on that? Reviewing efficiency and effectiveness of planning is key here. We discussed this topic in our previous blog post .

Ideally, planning processes are optimized before they are implemented into a new tool. One great way to start the discussion on planning processes is to participate in Benchmark 2017 – Corporate Planning. This study is conducted by a German university and offers an external and objective view on how a company’s planning processes are positioned in comparison to benchmark companies. It can trigger the discussion on how planning processes might be adapted, or it can assure you that your processes are effective and efficient and can be taken into a tool without major adjustments. Participation is free of charge, involves only around one hour of your time, but can bring valuable input.

2. Choose a partner rather than a tool

Effective planning is key for successful management in dynamic market environments. Planning, as we understand it, is not a process that is stable for a long period of time. Organizations change, so do market conditions, competition and risks. Planning processes are therefore rather flexible over time. Implementing the perfect tool today does not mean that this is going to be the perfect tool tomorrow. We have seen great solutions being built based on technologies that are not considered high-end anymore, and we have seen the opposite many times as well. So even with the latest technology you can build solutions that will be hardly maintainable in future.

Building and maintaining an effective and efficient planning solution requires a long-term cooperation between functional departments and IT, no matter if IT is internally or externally staffed. IT has to understand business requirements and needs to advise functional departments on how to best implement the process requirements. On the other hand, functional departments need to be willing to compromise on topics which would result in too complex or too inflexible solutions.

A long-term trust-relationship therefore is the key success factor in corporate planning processes. Different to other Business Intelligence applications, planning is in our opinion not ideally suited for purely KPI-based maintenance agreements like ITIL.

3. Choose a tool that fits to your IT-strategy

As the short-term functionalities of the tool typically are not the main bottleneck, the tool decision should be made on the basis of IT-strategy. Total Cost of Ownership, best-of-breed or best-of-suite, Cloud or On-Premise? Planning is an integral part of your BI landscape. The planning tool will undergo regular adjustments, as processes will change. So the company needs to have the competences to maintain and adapt the tool to its requirements.

4. Functional departments and IT need to develop the solution together

Once a tool is selected, IT and functional departments need to work together to find the most efficient and most flexible way to implement the requested processes. It should neither be a “System follows Process” nor a “Process follows System”, but a “Let’s develop a most suitable solution together”. Both sides need to compromise to get the best out of the project. And both sides need to understand each other. This will be the best basis for a long-term success in integrated corporate planning.

You are interested to read more? Our Corporate Planning Maturity Framework provides details on different aspects of planning processes, and how these processes can be optimized. It is ready for download on our website.

Some previous blogs discussed specific topics of planning:

Effectiveness Traps in Planning

Thoughts-on-Planning: How do you know that your planning is “good”?

Thoughts-on-Planning: Do you think that adding detail will improve accuracy?

Thoughts-on-Planning: Do you also play Budget Poker?

 By Andreas Krüger