Information System for Corporate Planning

Corporate planning is gaining more and more importance in recent time. One of the reasons is fast changing business dynamics due to the much cherished phenomenon called Globalization. This phenomenon has brought about tremendous opportunities but has also put frightful pressure on businesses. Integration of world market, emergence of new technologies and deregulation, all demand very high degree of flexibility and foresightedness. The fast changing business landscape mandates the organization to run the exercise of future planning continuously. Organizations which foresee the future earlier than others get a competitive advantage. But, the process of foreseeing future and planning for all possible scenarios or contingencies is not an easy task. Coming up with strategies for all possible contingencies is another challenge. The corporate planning exercise needs a team of expert as well as high degree of involvement from all levels of management. Since level of expertise varies from organization to organization, all the organizations do not possess equal capability or preparedness for future contingencies. Here lies the opportunity for designing a system which captures the modeling logic of experts and make the corporate planning exercise possible for organizations with somewhat less expertise

Technological innovations in computer and information technologies have brought in significant improvement in business processes. Information system of previous generation had failed to provide much support to senior management in making strategic decision. But, now we have information systems that not just facilitates operational decision making but also captures expert’s logic for strategic decision making and carrying out complex exercises such as corporate planning. The idea of computer based strategic modeling tools in not new. A lot of literature is available from 1980 onwards which had proposed systems having such capabilities. In literature, I have found that primary requirement for such a system is to have knowledge of things that goes on in the minds of the expert strategic planners. Another important requirement from the system would be to integrate the decision making logic of all the organizational units/functional divisions (S&M, CF, Ops, HR) to arrive at the decision model for the organization as a whole [3][1]. This will provide support in decision making or evaluating alternative strategies, but corporate planning system has to go beyond a DSS system [2]. It has to first help the management in foreseeing the future and then developing alternative strategies. The decision support functionality will be used for evaluating the alternatives. The business logic of the firm will be at the core of this model. It will include MVO of the organization to generate the model that aligns with the corporate goals. Since the business environment keeps on changing, the planning system should keep gathering data relevant for planning and should update and adapt the model accordingly.[3] All the new information that is gathered by the system should be used for updating the forecast and revising the alternative strategies.

Such a strategic planning system will have an information gathering framework which will start with gathering key success factors from operating managers from various functional departments.[5] All the functional departments have different goals which need to be gathered and aligned with corporate goals. It will collect information about key success parameters from middle and top management. It gathers all the information from managements at all levels as well as external systems that are required for developing a planning model. The system should be highly interactive. In every phases of exercise it should generate results and validate it with management [4]. The feedback mechanism should be there for improvement of the model. This IT based system will help the management in developing planning model and coming up with strategies. In addition to that it will also help in saving a lot of valuable management time that goes in communication.


References


1. Dinkel, J. J. & Fuerst, W. L.(1986), Corporate Planning and Optimization Models: Integrative Aspects and Microcomputers, Infor, vol: 24-2, May 1986
2. Ackoff, R L.(1981), On the Use of Models in Corporate Planning, Strategic Management Journal, Vol. 2, pp-353-359
3. Takai, E. & Yamada, Y. (1995), An Information handling method for Corporate Planning Decision Support, International Transaction in Operational Research, Vol. 2-2.
4. Kluyver, C.A. & McNally, G.M.(1980), Corporate Planning Using Simulation , Interfaces, Vol: 10-03.
5. Mockler, R. J., Computer Information Systems and Strategic Planning, Publication Source Unknown (Taken from EBSCO)