Anjan is a senior executive with over 28 years of industry experience. He has worked with L&T, IBM, CA Tech, GE, Salesforce previously, and now is with Anaplan. He has closely worked with C level executives from finance, manufacturing, media, automotive and retail industries helping businesses adopt SaaS solutions. In his role as the Area Vice President & Country Head of Anaplan India, Anjan works alongside a multi-talented team to help customers drive digital transformation in their businesses, enabling them to be more innovative, agile and customer centric.
‘If you fail to plan, you are planning to fail’. This is not just true for business giants, but equally valid and imperative for small-medium-sized enterprises too. When you are starting a business or exploring ways to expand an existing one, you need a business plan in hand to manage all aspects of your business better and make meaningful decisions. A few years or even months down the line, the business may die because of lack of planning.
In 2021, the average lifespan of a company on the Standard and Poor’s 500 Index was just over 21 years, compared with 32 years in 1965. There is a saddening long-term trend seen, that of declining corporate longevity with regards to companies in the S&P 500 Index. This is expected to fall even further throughout the 2020s. This is not just due to a lack of basic business planning, but due to a lack of integrated and connected planning.
Enterprise business planning solutions articulate the vision
The pandemic kicked the speed of business forecasting and decision-making into overdrive, and since then planning and forecasting have become an everyday necessity. With such turbulent times, small-to-medium-sized businesses must change their plans on the fly as market trends shift or an unforeseen situation arises. Therefore, relying on siloed departments to create siloed plans is not good enough anymore. C-suite leaders need insight into holistic plans and forecasts across all the relevant business units like workforce, sales, supply chain, marketing, and finance.
How to develop a strategic planning process:
- Analysis of Your Strategic Position: Strategic planning for a small-medium enterprise begins with analyzing your current strategic position. This involves understanding the external and internal environment of your organization that impacts the business and then identifying your strengths, weaknesses, opportunities, and threats through a SWOT analysis.
- Develop a roadmap: Usually, an organization’s vision is built on the condition of the market. However, market conditions change daily, and you must adapt accordingly. At the same time, abandoning your long-term vision and strategic plan in favor of short-term success will affect the sustainability of your organization. Thus, the road map to success must be created by incorporating past lessons and future insights, providing greater clarity on all aspects of your business, from marketing and finance to operations and product/service details.
- Risk assessment: You must assess the possible risks associated with executing your strategic plan. It enables you to prepare in advance to take the desired route of action and take calculated decisions.
- Measuring success: Measuring the success is as important as succeeding itself. Once you have set your goals and desired results, there must be criteria in place for you to measure the performance against them to see if there is a deviation and in which positive or negative direction. Your key Performance Indicators (KPIs) will help you exactly in this regard to compare your goals with actual results. It is a tried and tested way to monitor business health and programme performance as you navigate your year. If you are on track—great! Off track? It is time to evaluate what is not working well and change accordingly.
- Integrate teams: As you begin to assemble teams for your small or medium-sized business, you must instill collaboration among them so that everyone works in harmony. Having a relatively smaller number of employees and/or a growing base of employees means that you can leverage this to coordinate better and take all the departments together, the sooner the better. No department should work in isolation, for every unit is connected for the holistic growth of the organization, and more so in startups and SMEs. As a result, planning for each unit separately can be a recipe for disaster, and it is here that we need connected planning for all units.
Connected Planning is a tech-enabled approach that works with data, people, and plans across all business units on a single platform to foster efficient planning processes and gain a competitive edge. Unlike the traditional approach, you do need to use many spreadsheets. With predictive analytics and machine learning (ML), you can do business modelling and scenario planning to plan forward. Planning models based on different use cases like profit and loss forecasting and consolidations, workforce planning, supply chain planning, or any customized planning requirement can help you stay afloat as a small-medium enterprise.
Modern scenario planning for small-medium enterprises
Business planning for small-medium enterprises need not be overly time-consuming or complex, it just needs to be integrated and intelligent, which makes everything easy in the long term. Having access to ‘what-if’ modelling, and scenario planning is imperative to take you from chaos to clarity. This will improve the overall business operations and performance as the communication regarding goal setting, measurement, and planning will be communicated to all the stakeholders on time.
The true essence of planning is not only achieved through predicting risks and mitigating them, but also in arming business professionals to build business strategy and planning skills to bridge the gaps in operational execution. Senior leadership must gather insights beyond basic business modelling to capture value in terms of both quantitative and qualitative benefits.
It is not just the threats or trends that must be kept an eye on, but equally the opportunities that come in their way and should be leveraged to transform the business for the better overall. Having the power to shift goals as needed will make your small-medium enterprise resilient and agile. With Connected Planning, you can observe the impact of the changes made, minimize errors, and enhance collaboration.
Business planning solutions helps reduce risks
As per Zen Business, one of the eight reasons why small-medium businesses fail is because of fundamental shortcomings in gathering accurate and educated projections for the future. Bankers request a holistic business plan from small-medium enterprises to grant them additional capital, but the enterprises fail to procure market analysis, competition analysis, and forecast potential budgets, and thus fail to procure capital from banks. This should be avoided with business planning solutions, which will protect you from all types of risks.
From a time, standpoint, one of the successes that small and medium-sized businesses will eventually see is going through an annual planning process is very time-consuming, as each version that everyone is working on needs to be reconciled every time.
With Connected Planning, you should be able to cut down the planning cycle by about half a year. Another great benefit has been increased visibility into the data, which assists in making decisions, setting thresholds and guardrails, keeping the information centralized, and providing guidance to the sales team.
Road ahead: Connecting the dots
In recent decades, business planning has significantly advanced thanks to ever-improving technology. You can construct sales plans using customer relationship management software that considers almost any prospective client encounter. Across global supply networks, supply chain planning technologies can help identify where and when resources are needed. Financial analysts may more accurately identify patterns, make model improvements, and anticipate P&Ls thanks to digital finance systems. The significant “but” is that many businesses develop their business, operational, and financial plans separately, using different data sources.
This issue is not unknown or new, but there is a fresh approach to fixing it. It is possible if the CFO combines planning methodologies into a single, integrated strategy, producing a plan that all important functional leaders are committed to and evaluated against. It is possible if the digital tools equipping the plans are integrated with human intelligence to reveal the effects of financial, operational, and commercial decisions in real time. Adopting a truly connected enterprise planning solution allows your small-medium business to make critical decisions faster, gain the agility to outperform, and ultimately increase its longevity. The CFOs of this era are well positioned to make this happen!