I started this post before I saw the news on the G4S fiasco not delivering sufficient staff for the London 2012 Olympics. A perfect example of a business not managing their resources during the planning process! Management accountants are masters at forecasting and planning, often making a very good living at it. And there are of course many IT companies out there offering forecasting software as well as downloaded templates from the internet.
Some questions may be obvious others not so:
How long a period? That depends on the drivers and target audience.
Is it project based or for planning purposes? Project forecasting is often easier to assess. For planning purposes the horizon is often a moveable feast and on occasions subjective.
All business planning from sales forecasts to the ubiquitous 5 year plan has one overriding critical factor, what is the chance of success or failure?
Assuming the planning has a ring of reasonableness, resource management is often overlooked.
Factors to consider, generally forgotten by us mere mortals:
- Timing is crucial, connecting the resource capacity to new business opportunities and planning based on the likelihood of each new opportunity. Lead times, as a matter of course we plan for delivery of raw materials, what about the other resources?
- Ensure there are sufficient qualified personnel to achieve the objectives. Plan staff requirements, both current and future never losing sight of experience, skills and training.
- Capacity of resources is often overlooked or assumed. For example, to meet expected demand, Pepsi Cola are opening a new manufacturing plant in China . The Farnborough Air show took place this week. To secure raw materials and pricing, Airbus signed a US $1.4B contract with aluminium company Alcoa Inc.
- Closer to home, there is an upsurge in office space being offered in London’s Shoreditch to meet the demand of the tech companies from Google to app designers, all needing a place to hang their hat or should that be park their Boris Bikes.
Businesses need to have visibility of their current and upcoming capacity/requirements. Effective monitoring of capacity and expected availability/demand could be the edge to being able to service the client, or in this case the success of my business planning.