Planning for Growth: Annual Business Plans Do Matter

If doing your annual

business plan feels like an empty gesture, then you need to re-think how you're

doing it. This yearly business ritual should be a time of serious review and a renovation

of your company's direction and goals. That's the message that Jeanne Urich,

managing director of Service Performance Insight (SPI), a global research,

consulting and training organization for professional services organizations

and Richard Curzi, vice president of operations for Collaborative Consulting

conveyed in their August 28 webinar, Business

Planning: Empty Ritual or Catalyst for Growth. In their presentation, Urich

and Curzi explained the factors that go into successful annual strategy planning.

Requirement number

one for a good business planning, they advise, is effective and innovative

leadership that can communicate a clear vision with measurable goals. Leaders

set the tone for how well departments work together and how much commitment employees

should have to carry out new initiatives. SPI research found that poor

leadership creates a domino effect of failures, including a poorly understood

vision, inability to get things done, poor communication, and an employee base

that has little confidence in the leadership or future of the company.

With good leaders

at the helm, the success of a business plan depends on these three guidelines: 


problems and opportunities.

Growth plans should identify weak spots and potential threats, and explain how

the company will address them. Examples of weaknesses might be poor customer

service caused by lack of customer service training, or out-dated sales

forecasts due to a paper-based sales entry system. A threat might be the advent

of a new technology (i.e. crowd sourcing) that could compete with a consulting

firm's expertise in setting up focus groups or conducting surveys. Likewise,

strengths and opportunities should be noted. An IT management company that has

several employees with experience in hospital IT could be a strength,

especially in the face of a corresponding opportunity – i.e. a lack of skilled

IT professionals with healthcare industry knowledge. The proposed initiatives

to respond to weak spots and opportunities should include timelines, specific

actions that will be taken, and the expected changes in key performance



financial impact.

Any initiative should have data and assumptions that estimate the financial

impact of implementing it. It should have an ROI and quantifiable reasons for

doing it. No business initiative should go forward without a firm knowledge of

how it will affect the bottom line.



Scorecards are a key part of growth plans, says Curzi. His company uses them to

monitor the success of its five-year strategic plan and annual business plan. The

data and key performance indicators (KPIs) used in the scorecards come from

NetSuite's cloud-based SRP applications -- NetSuite financials, NetSuite CRM,

and NetSuite OpenAir PSA (Professional Services Automation).The monthly scorecard

shows how actual performance is progressing against the expected KPIs forecast

in the annual plan.  

At the end of the

day, the best business plans spell out what the company will do in the coming

year in order to deal with threats, take advantage of opportunities, and

include a solid ROI analysis as well as carefully selected metrics to judge

performance. For more details on crafting a strategic growth plan for your

services business, listen to the recording of Business

Planning: Empty Ritual or Catalyst for Growth.

-Ed Marshall, SVP,

GM Services Vertical at NetSuite

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