Five Enterprise Planning Best Practices

insightsoftware -
November 10, 2021

insightsoftware is the global provider of enterprise software solutions for the Office of the CFO to connect to & make sense of data in real time, driving financial intelligence across […]

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Enterprise planning is going mainstream, as powerful yet affordable software technology has provided the means for small and midsize companies to develop highly collaborative, cross-functional approaches to strategic planning, governance, budgeting, operational planning, and more.

Enterprise planning is transformational; it’s not just a new and improved method for business planning, but rather, a seed for cultural change that aligns organizational resources around a common set of goals, objectives, and metrics.

1. Begin With the (Strategic) End in Mind

Author and productivity guru Stephen Covey famously preached that highly effective people should “begin with the end in mind.” This is sound advice for executives embarking on an enterprise planning initiative.

It can be tempting to approach planning from a business-as-usual perspective–to engage in planning as a question of how best to perpetuate the status quo (but in a slightly new and improved way, of course). That approach misses the point. Enterprise planning has the potential to be transformational; it should be viewed as an opportunity to re-align day-to-day business operations and tactical decisions with the bigger picture of long-term business strategy.

Group Having A Discussion

Strategic planning is an essential first step in any comprehensive enterprise planning process because it defines the top-level goals and objectives from which everything else should flow. It aligns the highest level of executive management with board oversight representing the company’s shareholders and other important stakeholders. Ultimately, strategic planning establishes clear priorities, a common language and set of definitions from which everyone can work and drives those priorities through every level of the enterprise planning process.

The strategic planning phase should also establish a clear governance structure, ensuring that all of the ensuing activities in the process are aligned and monitored, with clear accountability in place.

2. Plan for Agility and Adaptability

Over the past two years, business agility has become the new imperative. It began with the arrival on scene of a pandemic, but has since been followed by ongoing supply chain uncertainty, price volatility, and disruption to the workforce. Business leaders have become increasingly focused on the capacity of decision-makers within their organizations to rapidly read changing conditions, accurately assess the options available to them, and pivot quickly and decisively.

Many have turned to innovative budgeting methodologies such as driver-based budgeting (DBB), which is built upon the premise that important factors affecting the business will change. Change is inevitable, and budgeting methodologies that can easily accommodate variability can be an asset during times of particular uncertainty.

Although budgeting and planning are not equivalent; the budgeting process provides an important foundation for the bigger picture of enterprise planning. In this respect, it can be helpful to allow some time early in your enterprise planning implementation to consider which budgeting methodologies might be the best long-term fit for your organization.

3. Follow-Through With Reporting and Analytics

As every golfer knows, follow-through is the key to a successful swing. In enterprise planning, follow-through is equally critical. In this case, though, it takes the form of monitoring performance against the plan, especially with respect to key metrics defined in the strategic planning phase. To be successful with enterprise planning, companies need to build a strong competency in reporting and analytics.

Group Meeting Around A Table

To support the end-to-end enterprise planning process, your reporting strategy should include an integrated approach to financial planning and analytics. The planning and budgeting inputs should set your target objectives, and you should design your reporting systems to measure and monitor those same objectives, drawing live data from your company’s ERP software and other transactional systems. Seamless integration between the plan, the reporting platform, and core transactional data are essential to making the entire process manageable, and for maintaining accuracy.

4. Make Organizational Change Management Part of the Process

In virtually every organization, transformational change will encounter at least some resistance. Enterprise planning represents a cultural shift away from steady-state, business-as-usual thinking toward an agile and adaptable organizational ethos. That can be uncomfortable for many people.

Company leadership must understand that organizational change management is a necessary element to a successful enterprise planning initiative. Consider enlisting supporters throughout the organization to evangelize on behalf of the initiative and build the momentum necessary to carry it to a successful conclusion.

In many cases, it may be best to approach enterprise planning incrementally. Company leaders might choose to adopt a new budgeting methodology as a first step, for example; or to roll out the necessary technology, with an initial focus on reporting and analytics. A successful rollout can provide an important proof-point for reluctant employees and other stakeholders throughout the organization.

Another approach is to roll out some element of enterprise planning inside of a single division or line of business. Although this delays the benefits the company will see from a holistic enterprise planning approach, it may make sense as a stepping stone along the path to that goal.

5. Automate, Automate, Automate

Technology offers ample opportunity to automate processes, and enterprise planning is no exception. In fact, without software innovation, it’s likely that enterprise planning would still only be happening in very large companies. Nevertheless, all too many businesses are still relying upon tedious manual processes for planning and budgeting, as well as to collect, collate, and analyze transactional information.

Manual processes are time-consuming and inefficient. When finance teams depend on cumbersome copy/paste processes, they not only waste time, but they limit the agility and responsiveness of the business. The reports and analyses produced using manual processes are out of date starting from the moment a user publishes them. If executives need an updated copy of the report, the user must go through many of the same steps all over again.

Manual processes frequently lead to errors as well. If the user fails to double-check formulas, the resulting reports may be inaccurate. When business leaders are relying on that information, the consequences of such errors can be significant.

Enterprise planning is all about gaining a holistic, integrated view of the organization. It follows, therefore, that the information systems used for planning and budgeting, and reporting and analytics, should also be integrated. That includes direct connectivity to transactional systems, including ERP.

A successful rollout of enterprise planning software is not a trivial undertaking. It requires a strong commitment from the office of the CFO and a willingness to drive the kind of cultural change that has lasting strategic impact. The right technology foundation provides a framework for success.

At insightsoftware, we provide tools that facilitate agile enterprise planning and modeling. We empower users in finance, operations, and elsewhere throughout the organization to work with data from multiple systems to enhance and streamline enterprise planning and financial and operational reporting. If your company is striving to achieve greater agility, adaptability, and resiliency, insightsoftware can help. Contact us today to learn more, and to arrange a free, no-obligation demo.

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