The Future Used to be Easier: Planning for Success in Dynamic Environments

• Only 11 percent of companies surveyed were fully satisfied with their planning capabilities, compared with 17 percent two years ago and 20 percent 10 years ago.
  
  
• More than two-thirds of companies surveyed report that planning accuracy diminished because of economic volatility.
  
  
• More than 80 percent of respondents recognize that the importance of building accurate plans has increased.
  
  
• Forecasting is more accurate when prepared by operations personnel rather than finance or cross-functional teams.
  
  
• Only half of all respondents use all three forms of external data (competitive data, macroeconomic reports and market expectations) for planning purposes.
  
  

Accenture’s research—backed by its experience with clients globally—indicates that effective planning requires mastery of three areas in particular:

• Embedding flexible and dynamic processes. Prospering in volatile markets and entering new markets requires agile decision making based on excellent planning. To make planning more flexible, companies must focus on what matters, incorporate a range of scenarios, adjust plans to events and include operational staff in the planning process.
  
  
• Leveraging sophisticated analytics and frameworks for resource allocation. Companies need to allocate resources across complex global markets more effectively by collecting better data and employing analytics more consistently, as well as building clear frameworks for capital allocation.
  
  
• Taking a broader perspective. In response to economic volatility, managers need to take a broader planning perspective to strike a balance between short- and long-term performance. To do this, they must renew the focus on strategic planning and incorporate intangible assets in the whole process.
  
  

Creating an effective planning approach requires a change in mindset that will take a great deal of effort to inculcate. Senior executives must communicate widely and often to inform colleagues about the new approach, why it is important and what changes it will require.

In addition, the executive team must be willing to overcome three common barriers to successful implementation of a transformed approach to planning:

• Uncertainty about how to begin. Published information about planning practices is extensive and often contradictory—in fact, an external partner is often recommended to help create the right planning strategy.
  
  
• An unclear business case. Making smarter business decisions is obviously good—but identifying immediate benefits is less easy. The executive sponsor should designate key stakeholders from marketing, IT, finance and other units to join a governance committee that can identify how each area will gain from the initiative.
  
  
• Skepticism among the troops. Regular and credible communications, along with selective training sessions, are needed to convince middle management and down that planning is more than a bureaucratic exercise.
  
  

Future value of a company comprises roughly half of market capitalization, according to research by Accenture and Cranfield University School of Management. Management’s credibility with investors depends on the accuracy of its forecasts and its ability to respond to future events. A more dynamic approach to planning will help to restore shattered investor confidence—and thus play a role in helping organizations get back on course to achieve high performance.

Contact us to find out how Accenture can help make your planning processes more agile and effective.