Annual planning is becoming a thing of the past. Today, organizations are stepping away from the traditional-static planning approach and vigorously implementing the active planning process. Because a dynamic world demands a dynamic planning approach!
But, what’s so special about this active planning process that static planning can’t provide?
Answer: an active planning process allows business leaders like you to focus on crucial management functions rather than on manual laborious planning tasks. As a result, it saves you a lot of time and money in comparison to the static planning process.
Transitioning to a modern, active planning process can seem both daunting and risky. But the benefits are countless – and risks, minimal.
So, to get you started on considering an active planning process, we have collated 5 reasons as to how static planning can cost your team and business. And how active planning can uplift your business with maximum productivity and flexibility.
5 Reasons to shift from static to active planning process
Static planning costs you more than you can realize. Here are some of its pitfalls:
1. Poor collaboration:
90% of static planning involves manual planning processes. As a result, it makes collating data a painful and time-consuming endeavor – with multiple versions being emailed back and forth. Thus, creating confusion and giving rise to a lot of errors. An F1F9 study found that 88% of all spreadsheets contain significant errors in data, modeling, or both.
This, in turn, affects the collaboration among team members with room for a lot of conflicts and misunderstanding. Ultimately, affecting the work quality and team’s peace of mind.
2. Questionable manual tasks:
Static planning steals time. Your business forecasts are only as good as the underlying data. But a manual spreadsheet process makes it difficult to know:
- who entered the data,
- where their numbers came from, and
- which is the latest version of the data.
Also, sharing duplicate copies of spreadsheets creates a brittle, unreliable process for planning and forecasting. Thus, these endless manuals, menial tasks cost you time and rob finance of capacity.
3. Inefficient/obstructing insights:
Static planning is known to obstruct insight. Because it requires one to look backwards to make decisions. This forces finance teams to spend all of their time wrangling data and ensuring accuracy. Thus, leaving little time to work on insights in making finance a valued partner in the strategic planning process.
Also, a static-manual process prevents you from quickly visualizing data or automatically creating dashboards for your team. As a result, you end up manually recreating report elements each time something changes. Thus, giving you less or no time to analyze the bigger picture and design an effective business strategy to drive results.
4. Miss of opportunities:
With time spent on never-ending manual tasks, you may miss out on valuable opportunities. With less time to develop insights, poor collaboration, and a lack of uniform trust in the plan – it blinds you to new revenue streams and markets. Thus, pushing you to make choices based on incomplete information. Can you imagine the repercussions this can have on your business?
5. Scalability issues:
Static planning can’t scale. Because they solely depend on manual spreadsheets. Also, spreadsheets were never designed to scale. They’re specifically designed for one user or maybe for 2 working closely. Once they move beyond that, data integrity unravels.
That being said, spreadsheets were not designed to support a growing business. A small business can rely on spreadsheets for their finance processes. But once the business starts to grow, you need to leverage tools and processes that support dynamic growth.
The biggest challenge facing organizations today is keeping up, and quickly responding, to change. But most finance teams today, still engage in static planning – a process that is not optimized for responding and adapting to change. Research also suggests that static planning no longer suffices in a realtime, data-centric business environment. And, slows down your company’s growth more than anything.
So, if your organization is still operating on static planning, it’s time you rethink the approach!
Because a static planning process forces a compromise between getting a plan right and getting it done. An active planning process, on the other hand, lets you plan and adapt without compromise. It helps you to better manage your business, by analyzing historical performance to inform and predict future performance. It is the key to accurate and agile plans that help you drive business growth.