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Under pressure to reduce costs, justify headcount, and deliver more value while providing business sponsors with the status of projects, many organisations struggle to put plans in place which are a true reflection of strategic objectives. How can they face these challenges and implement agile practices that can help them improve efficiencies? Following these four steps will help organisations gain strategic advantage.

Step 1: Get away from annual, manual processes

When it comes to annual planning, executives often rely on extensive, intensive, manual processes involving multiple people across the organisation who are tasked with collecting information over several months. Decision making then becomes a by-product of budgeting for annual planning, not strategic planning.

There’s nothing wrong with an on-time, in-budget, and in-scope culture – except when controlling spend crushes innovation. The question then becomes what results from creating detailed estimates for wish-list projects that may never get started. And if they do get started, there is little to no flexibility to adjust from that estimate. In the end, traditional budgeting doesn’t link investments to outcomes or results.

Instead, businesses should revisit approved budgeted projects throughout the year and re-allocate funding or resources so that they link investments to outcomes and results. In this way, they will be able to drive portfolio decisions, prioritise strategically, and speed innovation.

Step 2: Plan outcomes strategically

Often, businesses find themselves celebrating a project that was delivered on time, within budget, and in scope – but with unclear expected outcomes. Such is the risk of spending valuable time and resources on investments that weren’t prioritised or strategically planned from the start. As a result, businesses may not clearly understand what they are trying to achieve — let alone know what opportunities were missed throughout the year.

Without tying projects to outcomes or results, it becomes difficult to prioritise activities and successfully deliver on expected outcomes. This vicious cycle is exacerbated when the people who should be ensuring that resources are executing on a strategic plan are instead rewarded for managing to outdated detailed estimates and staying within budget – regardless of the project’s results. If the project is delayed or cancelled, the budget goes with it, which means there is no incentive to identify projects that won’t result in desired outcomes.

By empowering executives to have a real-time view into what they are actually delivering compared to a prioritised plan of outcomes, they can stop relying too heavily on the annual plan to drive execution, and strive for the flexibility to adapt and re-prioritise throughout the year.

Step 3: Appoint a leader to drive planning and innovation

Once organisations shorten the annual planning cycle and manage investments throughout the year instead of relying on finance driven processes to drive decisions, they can focus on planning which investments provide the biggest value for the portfolio buck. In short, management can create a culture that encourages an open dialogue around why projects slip, should have never started or ended before completion, and the value of new investments and opportunities.

Finding the right person to successfully lead and invoke this change while driving innovation is challenging. Pressured to meet finance demands, these leaders are tasked with getting the entire organisation to think strategically about planning and innovation. The biggest hurdle that leader will face is getting the execution side to shift away from governance and budgetary compliance. Only then can they deliver the data necessary to feed back into the business drivers around outcomes.

The key is to appoint a person capable of leading the planning process and bridging the gaps between executives, the business, IT, the PMO, and Finance, ensuring data and technology are meeting business needs.

Step 4: Plan continuously throughout the year

By embracing an agile system that can be used across the organisation to determine strategic outcomes, organisations will be able to quickly reallocate funding and resources.

Putting in place quarterly or monthly reviews enables organisations to integrate execution into their planning processes. They will then have the ability to continually assess their plan throughout the year, any time when either management has a new idea they want to evaluate or external markets and customers start applying new pressures. By creating a process and a culture that are able to take such events and assess them objectively, without major disruption, and through organised change, businesses are able to react appropriately and adapt to the new plan. Ultimately, this results in successfully meeting business needs and adding value to the organisation as a whole.

Achieving organised change

Understanding how the work they invest resources in to support business outcomes enables organisations to create not just a budget, but rather a business plan. Instead of doing this manually, on an annual basis, integrating execution provides regular evaluation of the plan to continually validate it and better handle un-planned ideas and needs – from customers, the market, and executives. This provides the ability to evaluate and create various scenarios for consideration and effectively adapt when decisions are made to adjust the plan.

By integrating strategy and execution, organisations can move beyond annual plans and budgets to a rolling horizon that will ultimately reduce the disruptive nature of an annual process. They can also reduce the effort it takes across the organisation by many so many resources – and create a results oriented corporate culture based on agile practices.

By Carina Hatfield, Senior Product Manager at Planview