Almost all companies devote a substantial amount of time, and money, to producing an Annual Plan. But how much does that process cost, and what is this value it delivers? How much time is spent on high value-added work, such as developing the Strategic Direction, versus less-value-added activities, such as departmental budgeting? And do some companies enjoy significantly better results than others do? If so, how?
Companies have struggled for years to answer these questions and others, such as how to determine the benefits to be derived from the planning process in general. Little wonder that only a relative handful of companies can boast annual planning processes that operate at a World Class level.
The focus of this research report is on the Annual Plan, because it is a common denominator across companies of virtually all sizes and industries. Even companies that adhere to a "rolling forecast" develop an annual or full year plan; one that covers all four quarters of the upcoming year. It is for this reason that the cost of developing the Annual Plan becomes the common basis for benchmarking the planning process, and a reasonable proxy for the planning process as a whole.
The joint Financial Executives Research Foundation/Buttonwood Group LLP survey on planning was designed to answer all these questions, and the answers are very revealing.
