more-arw search

Innovative Budgeting and Planning Approaches

It is important to have an effective planning process in place.

A fluid budget and strategic planning operation is key to a business's success. Without the ability to quickly adapt to new situations, organizations may soon find themselves unable to meet client or customer needs. To that end, they will need an effective approach to planning.

The first step is communication. Management needs to be able to communicate targets to staff, as well as provide timelines and guidelines for project completion. This way, project teams will be able to collaborate across departments using a unified set of guidelines. This approach is applicable to nearly all types of projects, from budgeting and strategic planning to research and development.

Planning team members must then analyze the data that has been collected and compiled, and model various scenarios, which could include reconciliations, intercompany eliminations, management consolidations or legal and statutory consolidations. All of this leads to the final report, which provides the company with a concrete framework it can use to act on the plans.

One concern facing a number of organizations when it comes to budget or strategic planning is the length of budget cycles - many feel that these cycles are too long. This can lead to difficulty modeling for eventual resource needs and forecasting revenue for future fiscal years. Some organizations also struggle with ways to increase the accuracy of their reporting while reducing the costs associated with the process, and quickly modeling strategies and then implementing them.

Firms need to implement strategies that complement the particular needs of their operation and take into account industry specifics. Professional services firms, for example, which deal mostly with human resources, operate differently than retail or wholesale organizations, which are asset-heavy. These organizations should be able to produce a variety of plans for different projects, clients or rates for services rendered.

Management can help planning teams perform more effectively by finding tools and programs that include industry-specific performance indicators and other metrics, rather than attempting to use a one-size-fits-all approach. This can go a long way toward reducing risk - and effort - during the planning process.

If an organization decides to take on a partner to assist with the planning and consolidation process, it is important to find one that is familiar with the industry. Additionally, planning partners that are willing to collaborate and co-innovate solutions will be much more effective than those who take a "my way or the highway" attitude. Planning partners should be assistive and work with an organization to meet its goals.

Topics:
Products and Companies: