What is Enterprise Planning? Definition, Benefits and Process

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What is Enterprise Planning?

Enterprise planning is defined as the process of setting company policies, processes, and budget requirements that aim to meet the set objectives and goals of the larger strategic plan of the company. It takes into consideration all internal and external factors that affect or can potentially affect the business.

Enterprise planning is typically done for a financial year with annual revisions to accommodate the needs of the next business calendar. It is a management-level process by which the company’s leadership comes together, often led by the chief executive officer (CEO), to lay out the execution plan for the strategic vision of the company. This includes:

– Budgeting for human resources, technologies, and infrastructure.

– Balance sheet management including debt, profit margins, and product pricing.

– Setting the policies and frameworks taking into account laws and legal factors.

– Setting the processes to enable team collaboration to execute the enterprise plan.

– Ensuring teams are enabled with the right tools to do their jobs.

Benefits of Enterprise Planning

While enterprise planning is a critical tool for large businesses, the process allows any company or even non-profit to take advantage of its benefits of application. Here are some of the key benefits that make enterprise planning so important for any organization:

• Adds to management confidence in achieving the strategic goals

A properly thought-through enterprise plan leads to increased confidence in the management’s ability to execute the strategic plan of the company, which means the ability to achieve its core objectives. Without a thoroughly laid out plan, the strategic vision for the company is just words. It is the enterprise plan that maps the strategic goals down to the execution which will lead to the accomplishment of the goal.

• Improves employee-leadership relations

Employees are encouraged by transparency, inclusiveness, and the ability to understand the larger vision of what the company is trying to achieve. An enterprise plan takes its vision and lays it out as targets and collaborative goals among the wider teams. This way, employees have clarity on what they are doing and the expected outcome of their efforts. Such a plan is also egalitarian, since all employees, including the management, are bound by the same goals, plan, and rules.

• Builds a strong foundation for roadmaps

Roadmaps, be it for customer experience, product development, marketing, or any department/ team- are highly dependent on the underlying company structures and frameworks. For example, if an enterprise plan accurately lays out the chain-of-command for product development and how product managers can executive (executive?) whilst working with other teams for design, content, UI/UX, etc., then the product managers can accurately and confidently lay out a product roadmap. Without the supporting foundation brought about by the policies and protocols of the enterprise plan, teams may often run into conflicts with each other, have issues with technologies that are to be approved for purchase, make recruitments without going through proper approvals etc.

• Sets structured enterprise processes

A structured enterprise process is one that takes into account the various issues and challenges that may arise when employees and teams are working with each other, planning to add team members, purchasing technologies, prioritizing the right tasks, etc. In other words, an enterprise plan needs to set processes that make communication and delivery easier for employees with minimal roadblocks to deal with on the go.

For example, if it is laid out in the enterprise plan as to how the design team should prioritize and process requests coming from multiple teams, it becomes a lot easier to make decisions without conflicts and deliver outcomes faster- for all teams involved.

• Enables calibrated delegation of authority

An enterprise plan helps define roles and their scope as clearly as possible to ensure minimal role conflicts and overlaps while allowing for ample room to collaborate and work together. Delegation of authority needs to be such that it reflects the general hierarchy in the enterprise plan while defining processes on how to make changes and additions.

Authority delegation can be laid out quite precisely at a higher level, but as we move down the ladder, this delegation is much more dynamic in a given financial year. An employee who has performed better in the previous months may get added responsibilities and authority without waiting for the annual promotion cycle. How such delegations are to be worked into the larger org chart, access controls, team clarity on updated roles and how it affects their work etc. need to be laid out in the processes derived from the enterprise plan.

• Minimizes siloed operations

As teams get larger, one of the biggest issues to teamwork is siloed operations, in other words, a lack of communication and proper collaboration. There may be tasks assigned that are outdated and do not reflect recent updates, there may even be tasks on employees that no longer need to be done or are simply not a priority. These issues arise when employees are working in their own small silos, disconnected from relevant updates and information.

An enterprise plan that trickles down with the team tasks being in turn tied to the larger team goals ensures that employees do not feel siloed off, especially in remote working environments.

Learn more: What is Tactical Planning?

Enterprise Planning Process: 5 Key Steps

Here are the 5 key steps to create an enterprise plan:

1. Create a strategic plan for the business

An enterprise plan is a working plan that is derived from the larger strategic plan of the company. A strategic plan, unlike the enterprise plan, is the overarching goals and objectives of the company. Enterprise planning is the next step that seems to frame the policies, processes, and protocols to achieve the strategic plan.

For example, if one of the strategic objectives is to grow profit by 10% annually for the next 3 years, then the annual enterprise plan must derive exactly how much more sales and upselling would need to be done, how marketing demand generation will operate to supply ample sales-ready leads and so on.

2. Invest in market research for external factors

For medium-to-large scale businesses, investment in market research to fuel the enterprise plan may be a worthy and dependable decision. Market research may be primary or secondary, depending on budget. Such a report will ensure that when judging external factors and their impact, management decisions in the enterprise plan were soundly based on data and not simply daily news and speculation.

The PESTEL method is a great guideline for doing research on external factors that are abbreviated in the term itself – political, economic, social, technological, environmental and legal.

3. Analyze internal factors

Depending on the size of the business, the management can use several tools to assess internal factors such as OKRs (for team performance evaluation and management), SWOT Analysis for identifying strengths, weaknesses, opportunities, and internal threats (such as weak cyber security protocols), BCG matrix for product/ vertical prioritization, cost-benefit analysis for new purchases and investments, etc. This is a methodical approach to understanding challenges, assessing internal issues, and coming up with the right type of solutions.

The results from these models should provide ample information about the internal state of the business and enable the leadership team to make data-backed decisions.

4. Formulate the final enterprise plan

Once all internal and external factors have been taken into account, the enterprise plan must be formulated to include solid processes, guidelines, protocols, technologies, and governance. This final document will be the framework based on how a product or service will be developed, managed, sold, and serviced to meet financial objectives. Furthermore, the enterprise plan must entail HR policy guidelines that should help me employee targets on retention and satisfaction.

5. Re-evaluate based on feedback

In an enterprise plan, there are larger company goals and then there are individual team targets and metrics that help meet the larger goals. The teams need to know what the larger goal is and what their team goals are, not necessarily the entire company’s targets and metrics. These team targets must be discussed with the team leaders and employees to whom they are concerned, before sealing them. This must take place in a time-bound manner such that there is ample room to re-evaluate and make adjustments if that is the decision.

Learn more: What is Strategic Planning?