Board International: Planning is Priority for Global Leaders
Today’s leaders are placing a renewed focus on scenario planning in response to a volatile business landscape that continues to wreak havoc on operations.
That’s according to the latest research from Board International, which reveals 71% of decision-makers are taking planning more seriously, with the war in Ukraine, cost-of-living crisis and ongoing supply chain disruptions acting as key catalysts.
Labour shortages (36%), cyber attacks (34%), the blocking of key supply chain channels (30%) and fluctuating oil prices (29%) top the list of threats that decision makers are currently making plans to mitigate against.
Planning fatigue has set in, Board International finds
Despite an emphasis on planning to help navigate disruption, a worrying proportion organisations continue to face challenges when it comes to carrying this out effectively.
Board’s survey unearths signs of planning fatigue at numerous companies, with a 14% global decrease in how seriously they are taking planning compared to last year. What’s more, around three-quarters (73%) of business leaders admit their organisation makes planning decisions based on assumptions.
Together, these findings suggest many are struggling to implement data-driven decisions. Almost a third (29%) of respondents report that ineffective planning has impacted profitability, productivity and the ability to drive innovations, new products or services.
"Industry leaders face immense pressure to navigate a complex and unpredictable business environment,” explains Jeff Casale, CEO at Board International. “The need to shift from conversation to action around scenario planning has never been more important.
“But, in far too many cases, organisations remain limited by legacy tools that are prone to errors and siloed data – leaving them vulnerable to costly mistakes and outdated insights. To better compete, they need to be proactive about anticipating disruptive events, modelling calculated scenarios and aligning strategic, financial and operational plans.”
From scanning to planning
In carrying out its Global Planning Survey for 2024, Board International gathered the thoughts of more than 1,500 decision-makers based in the US, France, the UK, Germany and Italy.
These leaders were all based in the financial, supply chain or retail and merchandise planning functions within retail, manufacturing and FMCG businesses with at least 500 employees.
One of Board’s key observations is that too many companies are simply scanning for potential crises rather than actively preparing for them. For example, only 39% of respondents are discussing rising tensions between China and Taiwan and just 27% are actively scenario planning in case of escalation.
Gray Rhino and Black Swan events like the ongoing conflicts in Ukraine and the Middle East highlights how important it is for organisations to anticipate and mitigate the risk of geopolitical, economic and social disruptions, however unlikely they may seem.
The survey also finds 70% of organisations usually disregard the most extreme scenarios when planning, suggesting most companies are leaving themselves open to risk should the unexpected happen.
Firms must strive for agile planning
Board International’s take is that adopting an agile and integrated approach to planning is critical for companies to drive increased flexibility, streamlined operations, faster time-to-market and improved collaboration and resource allocation in a rapidly-evolving market.
However, researchers identify a concerning agile planning gap that demonstrates a significant disconnect between aspirations and reality.
While three-quarters of respondents believe their organisation is equipped for agile planning, only 17% feel they have the right processes and technologies in place to make this a reality.
For those looking to close this gap, there exists three key barriers: poor data quality and governance (46%); ineffective processes based on largely manual activities (48%); and a lack of modern tools and technologies (43%).
Nevertheless, organisations are considering harnessing the power of AI in a bid to overhaul their approach as they shift towards more data-driven, agile planning.
Almost half (46%) of respondents are exploring machine learning to improve decision-making and a similar proportion (44%) are looking to AI-powered business intelligence tools. A third plan to adopt GenAI tools to enhance their decision-making process.
"By embracing intelligent planning tools and agile planning processes, companies can analyse internal and external data to plan for a range of eventualities, driving more informed, proactive decision-making and improving business outcomes,” Jeff adds.
“Over the next decade, companies that don't shift to running their business on a fully-integrated planning system will face an uphill battle.”
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