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Continuous Planning Provides Action, Agility and Accuracy

The term “continuous planning” may conjure up images of never-ending meetings in which nothing gets accomplished, but Ventana Research uses it to describe a highly collaborative, action-oriented approach to corporate planning built on frequent, short planning cycles. This style of planning enables organizations to enhance the relevance and accuracy of their plans for three reasons. One is that this is an integrated operational and financial plan rather than a budget. The second is that it is high- participation planning, which creates a single, integrated view of individual departmental or business- unit plans. The third is that plans are created and updated frequently using very short cycles with a rolling-time horizon focused on key drivers rather than a highly detailed, time-consuming bottom-up process.

Today’s corporate planning is flawed. For example, our benchmark research finds that companies often react too slowly to changing market conditions. They miss opportunities to sell more and wind up allocating resources to less productive or less profitable activities. Especially in larger companies, fragmented, silo-based planning efforts stand in the way of more effective planning processes. Our research shows that, typically, the only company-wide plan is the annual budget, supplemented by monthly revenue reforecasts and budgets revised quarterly or semiannually. Budgets are essential for financial control, but they aren’t the best tool for business planning. Budgets are built around accounting and finance. They only indirectly consider what people running the business must manage: people, products and customers. In contrast, continuous planning sets out measurable performance objectives for these key operational elements.


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About the Author


Robert Kugel

SVP and Research Director
Ventana Research

Robert Kugel is responsible for the Office of Finance and business research, focusing on the intersection of information technology with the finance organization and business. His research agenda includes the application of IT to finance and business process optimization, looking particularly at ERP and continuous accounting, financial performance management, predictive planning, price and revenue management, revenue and lease accounting and robotic finance.