Collaborative Enterprise Planning: Automating The Management Process

Michael Coveney

Part 8 in the 10-part Collaborative Enterprise Planning series

Management processes are the mechanism by which organizations set goals, develop operational plans, allocate budgets, collect forecasts, analyze, and report results. They typically involve the whole organization at some point and are crucial in achieving short- and long-term objectives.

In the past, these have been set up as six distinct processes of:

  • Strategic planning, where long-term objectives are set
  • Operational planning that defines the way the organization will operate over the next few years on its way to achieving those objectives
  • Budgeting that allocates resources to the operational plan
  • Forecasting that tries to predict where the organization is heading
  • Risk management that looks at those things that could jeopardize future success and ways to mitigate any impact
  • Reporting and analysis that combines results from all management processes to support decision-making and keep the organization on track to meet long-term goals

These were typically done at set times of the year such as annual planning, quarterly forecasting, and monthly reporting. Interestingly, these calendar-scheduled processes were all established in the 1920s, nearly 100 years ago, when the world was a very different place and this timing was adequate in managing performance.

However, in today’s fast-moving, unpredictable business environment, plans are often out of date before they even begin. It is impossible to predict events six months out, let alone 18 months for the traditional budgeting process.

Today, with modern financial planning and analysis solutions combined with newer management methodologies such as “beyond budgeting,” these processes no longer need be time-bound. They can operate as a single management process where planning activities are triggered not by a date on the calendar but by events and exceptions. For all but small businesses, this requires a sophisticated automation capability that does not necessarily rely on human intervention.

To automate a process, the following criteria must be established:

  • A clearly articulated end purpose. Defining the end purpose is vital to delineating the different processes and the individual tasks within them.
  • Defined processes. These can be drawn as an interconnected map that, for FP&A purposes, shows how targets are set, resources allocated, and performance managed. Each process will require decisions to be made that together link to the end purpose.
  • Clearly identified actions by department. Processes rely on a chain of management activities that directly relate to the end purpose. There can be no misunderstandings for those involved in carrying out a particular task about their own responsibilities. They must also recognize that their role is to serve something greater than their own individual actions. It is only when users work together, performing their designated functions, that the organization can achieve the end purpose.
  • Information required. Individual tasks in a process will typically require some form of background information for the user, along with an explanation of the targets to be attained.
  • Output required. Any required responses should be defined, along with expectations of further elaboration by the end user.
  • Approval required. Some submissions may require management approval before they are considered complete.
  • Coordinated timing. Tasks within a process are often dependent on the completion of other tasks, and timing is critical. Those responsible for each task should understand these dependencies and have a deadline for task completion.
  • Activity triggers. The start time for each activity should be specified. This may be at the completion of another task or when an exception is detected. These should be carefully mapped out to make sure the triggers work properly for each activity in succession.

Modern planning solutions use these criteria to automate a continuous process focused on achieving the organization’s long-term objectives.

In his book Best Practices in Planning and Performance Management, David Axson conducted research into high-performing companies and found that:

“Best-practice companies decouple their internal management processes from the calendar and provide a set of planning and reporting processes that utilize continuous processing and monitoring of activity. The passage of time becomes (just) one of many criteria for triggering the reporting of information or the initiation of planning or forecast activities.”

The next blog in this series examines options for collaborative planning solutions and how to evaluate them.

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Michael Coveney

About Michael Coveney

Michael Coveney spent more than 40 years in the software analytic business with a focus on transforming the planning, budgeting, forecasting, and reporting processes. He has considerable experience in the design and implementation of business analytic systems with major organizations throughout the world. He is a gifted conference speaker and author. His latest book "Budgeting, Forecasting and Planning In Uncertain Times" is published by J Wiley. His articles have also appeared on, encouraging innovation in FP&A departments.