How to Ensure Planning Stays Inherently Data-driven?
A business flourishing in the 1960s must have made instinctual decisions and resorted to individual experience for confronting market challenges. And even those not accomplishing their goals must have put their faith in the shared confidence in “gut feeling” because back then, it was all about “instinct”.
However, The Fourth Industrial Revolution has handed the gift of “data” to enterprises. Devising a plan backed by data is what keeps the business going. Data defines:
What does point B (goal) look like?
How the path from point A to B would unfold?
When must a fail-safe operation come into play?
A “plan” consolidates a diverse range of activities, cross-functional perspectives, a 360-degree view of the functionalities. This plan must be the mainstay of every step a business takes towards the envisioned purpose.
Not being able to gather and use the right data can become an impediment. Organizations deviate from their path, basing their decisions on instincts. This is no longer a viable method of progression in 2021.
Unquestionably, for success in the prolonged run, your business planning must stay inherently data-driven. However, with all the functional intricacies, how does one ensure the planning process stays inherently data-driven?
1. First Things First, Understand The Art And Science
More than ever before, planning is an art and a science. The art part is having a good feel for the organizational spirit and the data it generates around various topics. The science part is knowing what to do with the data and employing technologies that can filter data effectively. Hence, ensuring an inherently data-driven strategy is more of a necessity than an act of will.
2. Define The Goal Spectrum
Business goals are most significant within a planned execution. They vary in complexity, and that’s why fixing what suits the organizational endeavors best is imperative. Outlier defines how business goals should be realized and actualized within a “confident interval” reflective of the “most likely set of targets.”
3. View The Data That You’re Gathering In A Systems-Level Context (Wrapped Up With KPIs)
Perhaps the most significant element regarding data is that it doesn’t have a value or utility in itself. It has attributes and “what if” factors related to the knowledge you need. The value stemming from this knowledge can be ascertained by forming an “intersect” with the KPIs that are well-defined and expressed in a condensed manner. The crux is that the data-in-use must align with your KPIs.
4. Make It Easy To Contribute To Data-Gathering
Imagine a business plan that doesn’t take into account the data that comes from all levels of the organization. How feasible can it be? There are many ways to integrate every single employee into the planning process. For instance, IBM’s Planning Analytics powered by TM1® facilitates collaboration and integration of data being generated by different departments (HR, finance, etc.). It’s essential to enroll everyone in the planning process and not just executives to shorten planning timelines, making the process timelier.
5. Be Aware Of The Bias In Your Choices
If you base your decisions on data, you maximize your odds of making the right decision. Extra caution is needed while extrapolating the future based on current data that may be incomplete, irrelevant, or inaccurate.
6. Utilize Current (Right) Data
Data isn’t data if it’s outdated. Be it a market trend or a financial status report, using old data can be detrimental to the planning endeavor and bring about unforeseen errors. The best approach here is to use current data in making your decisions. For instance, you should always use the most recent updates on your financial statements as validated by those tasked with the responsibility of collecting the data. This data can then be put to use for advanced analytics.
7. Set Up An Oversight System For Assessment
How do you evaluate the outcomes of your plan? You must have a system in place that measures your progress against the key performance indicators (KPI). For example, “Score carding” the performance using strategy maps, custom diagrams, etc., through IBM Planning Analytics could strengthen the overall control plan and make the team aware of the possible steps to take to ward off the deviations.
8. Switch To A More Inclusive Data-Gathering Approach (Improve Consistently)
As the organizational workflow evolves (if it doesn’t, it’s dead in the water), the data that has been employed thus far shouldn’t stop being viable. Instead, it should be enhanced to become an even better guide for making decisions about what to do with a strategic business plan in the future. The challenge here is that data can’t always be improved upon; customers’ behavioural patterns, however, can. Hence, defining milestones and measures of customer engagement through data-driven insights and then incorporating them into your planning process can boost results.
9. Finally, Ensure Planning Is A Clearly Defined Process, With Inputs, Outputs, And Governance Validated By All Stakeholders
Often, opacity and vagueness get in the way of an ideal “plan,” which limits the ability to tie it to data points and prevent fragmentation. With no clear purpose and a lack of governance, usually processes end up as ad hoc exercises that are left to meander along with no specific impact. Therefore, the final step to a successful planning process is to ensure that it has a clear definition and exists in an institutionalized environment, where it remains consistent.
Conclusion
To sum up, planning is an essential activity that must be constantly expanded to match the needs of a growing organization. The aim here is to ensure that the planning process generates results that are not only accurate but also a reflection of relevant business trends and developments.
The foundational objective of planning is to form a “plan” that’s data-driven. The closer this process is to data-driven analysis, the better the output will be.
Looking for more ways on how to ensure planning stays inherently data-driven? Feel free to reach out.