Making Smart Decisions in Dynamic Times
16 September, 2021
Usually, companies check their past performance and in an attempt to plan for the future – at least, this has been the practice of several generations of companies worldwide. Yet, in a world in which technology is evolving faster than business, these methods and static, unadapted business plans are becoming obsolete. Business planning needs to look forward, starting today and moving into the future. It represents an educated guess, carefully designed and based on past results, but should never lose sight of the present. Thus, business planning should be an ongoing activity. As Dwight D. Eisenhower said: ‘The plan is useless, but planning is essential.’ Although this is well known, companies still focus too much on the original plans and fail to adjust them during the year, leading to many missed opportunities.
The ideal business plan is created through dynamic business planning. Dynamic Planning is a process that embodies a series of leadership and management principles that enable an organization to respond to changing market conditions. A business plan is still created for the year ahead – a dynamic reflection of trends is covered through scenarios. This allows tracking accuracy and actual performance against both the original and updated plans.
Companies are increasingly challenged by environmental events, geopolitics, and rapidly proliferating regulatory laws that change from location to location. Adding more traditional factors such as new market entrants and disruptive technologies makes planning and forecasting a major challenge in this dynamic world. By regularly reviewing the plan and updating it whenever circumstances change, productivity and flexibility are maximized. Dynamic planning allows to evaluate investment decisions, risks and opportunities like quickly responding to threats or adopting new technologies ideas.
Dynamic planning brings important benefits. With a better understanding of the company and surrounding conditions, organizations can respond more effectively. Forecasting improves, leading to business performance becoming more accurate, even under unpredictable conditions. Regularly modelling scenarios that reflect market developments, opportunities, or threads enhance decision making and responses to fast-changing environments. Reduced planning time and better models support agile responses. More agile and adaptive planning helps companies to become more resilient, even in times of crisis.
Choosing a business planning software to help achieve great results in little time will help you make the best out of the benefits provided by dynamic Business Planning. The Financial Navigator’s Business Planning feature lets you create your Business Plan and multiple scenarios. Actual performance is automatically tracked and benchmarked against the Business Plan and scenarios, providing detailed Performance Measurement. Budgeting is automated actual performance is reported against Business Plan on line item basis, freeing you of tedious manual budget tracking. Budget deviations are highlighted directly to allow for immediate root cause analysis. With the scenario analysis, you can reflect on year-to-date performance while the original Business Plan stays the same. This enables you to identify future risks and business opportunities to maximize performance.
Our Business Planning allows you to:
Create and manage your Business Plan and multiple scenarios
Automatically track performance and budget for immediate analysis
Identify risks and business opportunities