Structure of enterprise planning system

From CEOpedia | Management online

Structure Of Enterprise Planning System is a presentation of the company's plan hierarchy, starting from the main goal (vision and mission) through its strategy, ending with operational planning (L.A. Toledo, 2011, pp. 172-186). It is important to closely integrate the various categories of these plans for the effective functioning of the strategic management system.

Scope of planning system

Planning is mainly about setting objectives and actions in line with them. This concept can be understood as a project for the future and the selection of appropriate measures for its organization. Planning can also be understood as acting in the future, based on anticipating later events in a limited time and selecting the most appropriate and beneficial means, objectives, tasks and means (D.F. Neis, M.F. Pereira, E.A. Maccar, 2017, pp.24-26).

Types of planning systems

Considering the time horizon, we can distinguish (A. Damnjanovic, 2016, pp.26-28):

  • Strategic planning in a different long-term perspective, whose development is estimated to be longer than 5 years
  • Long-term planning, lasting from 2 to 5 years, is mainly aimed at achieving a higher objective.
  • Medium-term planning, the duration of which is normally estimated to be between several months and a year, is a support task for achieving long-term objectives.
  • Short-term planning, otherwise operational, with a duration of up to three months, is short, concise and not usually time-consuming.
  • Current planning, there are daily or maximum weekly tasks, mainly various types of meetings and basic tasks to be carried out during the day.

The role of the Planning System in the enterprise

Planning is a very important function within the enterprise. For this reason it should be a starting point for various activities carried out in the company. The activities in question are mainly related to the team, the organization and various types of projects. The following activities should be carried out in connection with planning (H.M. El Sherif, 2013, pp.178-180):

  • analyze the current situation in the company
  • reflect on the changes that may happen in the future
  • set targets to be achieved in the future
  • analyse the resources available (tangible, intangible, human, financial) and identify the resources needed for the future
  • identify activities that are intended to contribute to the achievement of the objectives pursued
  • analyze the consequences of taking or not taking specific actions in the company
  • identify ways to control and monitor performance in pursuit of plans

Elements Of The Planning System==The Planning System contains seven main components (R.A. Acheampong, 2018, pp.11-27)===Planning design=

This process involves decisions that have to be taken before planning can begin. Choose the approach to planning and the style of presentation of the plans. You decide on the computer tools for estimating, planning and considering the levels and the required detail.

Identification and analysis of outputs

All activities in the project lead to the production of certain products that make up the final result. This process requires identification of the products required by the project. Products are defined by means of product descriptions. When working out a product diagram, one analyses the mutual relations between products.

Determination of actions and relations between them

All actions included in the plan are defined in the product flow diagram. The process of determining actions is referred to as "transformation". The diagram is also useful for showing the relationship between actions.

Estimation

Rarely can a plan contain accurate values. Most often you need to estimate. Without estimating all necessary parameters, it is not possible to develop a plan and thus to start actions. There are different estimation methods, one of them is "Delphi", which consists in asking specialists to answer, which is verified with appropriate filters until you get a consensus on the most optimistic, pessimistic and probable estimations.

Scheduling

To create a schedule it is necessary to prepare a PERT (Programme Evaluation and Review Technique) network diagram and a Ganita chart. A computer planning tool is used. The plan created in this process includes: the work to be done with the start and end dates and the persons necessary to complete them.

Risk analysis

Risk should be addressed at all times in the planning process. All resources should be reviewed for potential hazards and actions to ensure that adequate reserves are included in the plan. There are different sources of risk, for example: quality issues, ability to meet deadlines, source of workforce and types of skills and commitment from team management.

Compilation of the plan

The closing stage of the plan involves putting all the elements together and preparing a short discussion on important points. The plan description is accompanied by various plans and analysis sheets, and the product checklist is completed with the start and end dates of each product. The plan can be understood in different ways as a rational description of the task and a way of execution, as a tool to achieve the goal, or a bit metaphorically as a "map of the future" - that is, a picture of what should be expected in the project. From a technical point of view, the plan is a tool for coordinating team activities, resources and a basis for measuring progress and controlling the project. It provides tools to support effective and efficient project management, i.e. to achieve the project objective on time and on budget.

Planning stage

The structure of the planning system determines and describes the subsequent stages of planning, among which it stands out:

  • Entrepreneurial phase - during this phase managers very rarely use the planning functions. Their main goal is to search for answers to emerging problems.
  • Administrative gap stage - at this stage planning starts to appear slowly, used mainly to increase efficiency.
  • The expectations gap stage - at this stage the plans are related to the company's vision. Their task is to assess the vision of the company's further operation.
  • Strategic development stage - during this stage managers reflect on actions aimed at growth of the already stabilized company and searching for new solutions and improvements for their business.

Examples of Structure of enterprise planning system

  • Strategic Planning: This is the highest level of planning in the organization and includes the formulation of the organization’s vision, mission, objectives and strategies. It involves analyzing the external environment and the internal resources of the organization.
  • Tactical Planning: This is the second level of planning and involves developing action plans to achieve the strategic objectives. It is focused on the implementation of the strategies and involves allocating resources, setting timelines and determining milestones.
  • Operational Planning: This is the third level of planning and involves the development of detailed plans and procedures to ensure the successful execution of the tactical plans. It includes setting up systems, processes and procedures to ensure that the tactical plans are implemented.
  • Contingency Planning: This is the fourth level of planning and involves the development of alternative plans and strategies to deal with unexpected events and changes in the external environment. It is important to ensure that the organization is prepared to respond to unexpected changes.

Advantages of Structure of enterprise planning system

  • Structure of enterprise planning system helps organizations to develop a comprehensive and consistent plan for achieving their strategic goals. By having a well-defined structure, organizations can ensure that all the plans of the organization are aligned with each other and that each plan contributes to the overall mission of the organization.
  • Structure of enterprise planning system helps organizations to streamline their decision-making process and make sure that the decisions taken are in line with the organization’s strategic goals. By having a structured plan hierarchy, organizations can ensure that their decisions are well-thought out and properly communicated to all the stakeholders.
  • Structure of enterprise planning system helps organizations to facilitate better communication and collaboration among the various departments and teams. By having a well-defined structure, organizations can ensure that all the plans are communicated and reviewed properly by different stakeholders and that all the changes are properly implemented.
  • Structure of enterprise planning system helps organizations to identify the key performance indicators and ensure that the organization is working towards achieving its objectives. By having a well-defined structure, organizations can track the progress of each plan and ensure that the organization is on track to achieve its goals.
  • Structure of enterprise planning system helps organizations to identify and address any potential issues before they become a major problem. By having a well-defined structure, organizations can identify any potential risks or issues that may arise in the future and take the necessary steps to address them.

Limitations of Structure of enterprise planning system

  • Structure of enterprise planning system is limited in its ability to accurately reflect the ever-changing nature of the business environment. It fails to account for unexpected events, such as changes in the competitive landscape or economic conditions, which can drastically alter a company’s plan.
  • Additionally, the structure of enterprise planning system relies heavily on the quality of the data and assumptions that are used to create the plan, which can lead to inaccurate planning or unrealistic objectives.
  • Furthermore, the structure of enterprise planning system can be time-consuming and costly to implement, as it requires the analysis of data and analysis of the environment. Additionally, it can also be difficult to maintain, as changes in the environment or to the goals of the organization may require frequent updates.
  • Lastly, the structure of enterprise planning system may be difficult to communicate to all stakeholders involved, as it can be complex and difficult to understand. This can lead to confusion and disagreements between the different parties, which can impact the success of the plan.

Other approaches related to Structure of enterprise planning system

Introduction: There are several other approaches related to Structure of Enterprise Planning System, some of which are outlined below:

  • Business Model Canvas (BMC): The BMC is a visual tool used to map out the nine building blocks of a business model. It includes the customer segment, value proposition, key resources, key activities, key partnerships, channels, customer relationships, revenue streams, and cost structure.
  • Balanced Scorecard (BSC): The BSC is a performance metric system that evaluates how an organization is performing against its goals and objectives. It consists of four perspectives: financial, customer, internal process, and learning and growth.
  • SWOT Analysis (Strengths, Weaknesses, Opportunities, and Threats): SWOT is a useful tool for evaluating the organization's external environment and internal capabilities.
  • Strategic Mapping: Strategic mapping is a process that helps organizations to gain a deeper understanding of their strategic environment and to develop strategies to respond to changes in their environment.
  • Porter's 5 Forces Analysis: Porter's five forces analysis is a tool used to assess the competitive environment of a business. It identifies the five forces that shape competition: buyers, suppliers, substitutes, new entrants, and industry rivalry.

Summary: In conclusion, Structure of Enterprise Planning System has several other approaches such as Business Model Canvas, Balanced Scorecard, SWOT Analysis, Strategic Mapping, and Porter's 5 Forces Analysis that help organizations to gain a deeper understanding of their strategic environment and develop effective strategies for success.


Structure of enterprise planning system — recommended articles
Strategic planning — Stakeholder management plan — Business plan — Business motivation model — Project cycle management — Strategic planning models — Tactical management — Strategic management — Importance of strategic management

References

Author: Bartosz Wojak

Retrieved from "https://ceopedia.org/index.php?title=Structure_of_enterprise_planning_system&oldid=97123"