The 3 Pillars of Connected Planning: Part 4—Connecting the Pillars
In the first part of “The 3 Pillars of Connected Planning” series, the Community team spoke with Chief Planning Officer Simon Tucker ( @simon_tucker) about the importance of the 'people' pillar of Connected Planning and the need for a cultural shift within an organization. In part two, we took a look at the 'data' pillar and what companies should consider when it comes to importing their data into the Anaplan platform. In part three, Simon discussed the importance of the 'plans' pillar. In this last part of the series, we'll take a look at how these three pillars work together during the Connected Planning process.
How are the three pillars—people, data, and plans—connected, and how would they ideally interact in a fully integrated connected company?
Simon: "Connected Planning starts with people. If a company wants to be agile, they have to involve people in the decision-making process. You can’t simply have a top-down planning process. The 'people' pillar is very important because you have to push the plans out to the coalface, as it were, where people are actually making the decisions, and empower them to make the decisions and make them accountable. The way you make them accountable is you give them transparency into the strategy of the company—how the assumptions were made in that strategy, and therefore, how the assumptions drove the targets to which they need to get.
"An example: if I told you that you have to do 20 percent more sales this year than last year, but I gave you no rationale and no assumptions, you would just say I’m crazy and tell me that 20 percent seems unreasonable. If I said I’m going to introduce two new products, explain the assumptions behind those products and tell you that I’m going to give you some new territories, now we’re talking, right? Now you've got visibility into the assumptions I'm making. You can question the assumptions, but you've now got visibility. That's the 'people' aspect of Connected Planning.
"Data is the connective tissue across the organization. In order to be an agile organization, you have to make decisions off of an accurate single source of data. The juxtaposition of that is everyone is making decisions that are encapsulated in spreadsheets on peoples’ desktops. People have different versions of the forecast. They have different versions of the customer list and product list. Because of this, everyone gets to the table with a different view and you end up arguing about whose plan or whose view is more accurate before you even start making a decision. And quite often, people are making decisions on poor data and they have to make lots more decisions than they ever did because of the globalization and volatility in the marketplace, so that’s why data is really important.
"Plans are important because plans are the way you execute on the strategic objectives. They are the way that you translate financial goals into operational actions that people in the organization need to do in order to support those financial goals."
If any one of the three pillars is weak, what happens?
Simon: "Well, inaccuracy is what happens. Poor decision-making is what happens. If you don’t have accountability, you don’t have transparency with the people. If you don’t empower people to make judgments quicker than they usually do, then you’ll get pushback from people, and those people will navigate back to their usual way of doing things.
"If you don’t have the right data or you have inaccurate data, people will make decisions on poor data. If you just have a budget, for example, by the time you publish it, it’s out of date and factors like macroeconomic and competitive conditions have changed, so you’re basically marching down a route that is now the wrong route, but you don’t know it because you were using a budget that wasn't up to date instead of a plan."
More From the 3 Pillars Series:
- The 3 Pillars of Connected Planning: Part 1—People
- The 3 Pillars of Connected Planning: Part 2—Data
- The 3 Pillars of Connected Planning: Part 3—Plans
Companies may fear there is a huge learning curve with Anaplan. How can companies be confident that the time investment is worth it and that it’s going to be better than what they're already working with?
Simon: "The best way to prove it to people is to showcase the customers that have gone through this. We have 1,600+ customers who are on the Connected Planning journey and are seeing the value of actually connecting the plans. When I talk about companies using spreadsheets in a silo, inaccurate data, emailing spreadsheets everywhere, plans are out of date, I’ve never met anyone who looked at me and said, "You’re crazy! Everything is working great!"
"And yes, it looks like a lot of companies are thriving. If you actually lift up the cover and take a look, they may be thriving top-line and maybe bottomline, but in the middle, they’re completely inefficient. I’ll give you a very good example. Carter's, who is one of our customers, is saving $25 million per year in cash flow based on improved inventory. They are actually turning their inventory faster than before, which reduces cash flow needed. Another customer—a global luxury retailer—is saving a lot of money by being more efficient in their supply chain.
"So yes, companies may be very successful but they’re also very inefficient. That’s really where Anaplan comes in. It’s making different decisions. If you think about it, when an external condition happens, if it takes you six months to react, okay—every company on this planet has got three companies behind them that’s ready to take the top spot, okay, and those companies behind them are more agile, much leaner, not as big, not as much of a dinosaur, so you have to make those decisions quickly, otherwise they will surely overtake you.
"A great example is Amazon. Amazon was selling books 20 years ago. Look at them today; they’re in almost every industry you can think of and working to get into even more industries. For example, they have now gotten into pharmaceutical. They can be much more agile at a much higher scale than even the pharmaceutical companies, so they have to be much more efficient."
How can organizations overcome the learning curve of implementing Anaplan? A company might be excited but think, 'Wow, we can’t do that. That’s too much to take on.'
Simon: "That’s the change management coming in, and this is how we differ from the larger companies. If you implement a SAP, Oracle, IBM, or even some of the point solutions, it’s an all-or-nothing approach. It’s a two-year implementation. It’s a big-**** approach. Anaplan is agile: start building use cases and start connecting. Look at your first pain point use case that you want to fix and then start looking upstream or downstream or one degree or two degrees of separation around from what. Where does the data flow in? Where does the data flow out? Suddenly you start building this honeycomb effect. It’s a gradual process of getting used to Anaplan. Our models are almost organic in nature. In other words, unlike other solutions where we need to completely rebuild it, with Anaplan you can start morphing, changing, tweaking, and tailoring the application. As your process matures or as your organization matures, these use cases get more comprehensive, slightly larger, slightly pushed out to the organization but very gradually, so it’s a gradual easing into the organization. And if you’ve got a Center of Excellence and a Chief Planning Officer controlling that rollout, as we’ve seen with many customers, then you’ve got good change management."
Connected Planning brings people together, promoting collaborative decision making, greater insight from collective intelligence, and rapid alignment to business changes. Tell us what you think about the three pillars of Connected Planning in the comments below.
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