March 01 , 2019

Top-down & Bottom-up Planning

Reading Time: 3 min

Planning plays a vital role in most companies and often determines whether a business succeeds or fails. Despite its importance, planning processes within companies are often a source of dissatisfaction for the people involved. In this blog we explain how ‘Top-down & Bottom-up Planning’ can improve processes within your company and help keep your employees happy.

 

Corporate planning is important.  It determines how company objectives will be met, how resources will be allocated, and how work processes will be defined and organised. In an ideal world, effective corporate planning also provides a mechanism for a company to avoid recurring problems and overcome everyday challenges.

Ironically, corporate planning in the real world is often a source of staff dissatisfaction. Some of the most common complaints are set out below:

 

  • the process is too time-consuming
  • the quality of the outcomes is too low
  • the process consumes too many resources
  • the company cannot see the wood for the trees
  • the process is too heavily driven by the finance department
  • there are not enough people responsible for planning outside the finance department
  • the subplans are not integrated coherently into the overall company plan

 

 

 

 

The Challenge

 

Corporate planning is becoming increasingly difficult as the complexity of the business world grows. Companies today must solve a multitude of planning problems simultaneously. What is needed is a planning process that unites scheduling, content and resources, and also integrates the detailed subplans into a company’s overall plan.

 

Neither top-down nor bottom-up planning meet these demands on their own. Both methods have their advantages, but quickly turn out to have limits. So, how can companies benefit from the advantages of each planning method without striking their limitations too quickly?

 

 

 

 

The solution: Combining Top-down & Bottom-up Planning

 

The answer is clear.  Companies must approach planning from both the top down and the bottom up. Here is a simplified explanation of this approach:

 

Management defines the overarching objectives and framework conditions without going into too much detail. (This is the top-down aspect of the method.) The employees at each successive level of the company then formulate intermediate objectives and operational subplans that are integrated into the overall company plan. (This is the bottom-up aspect.) The combination of the two methods ensures that the operational measures align with the overall strategic objectives and that the process is oriented towards practical actions and feasible outcomes.

 

Top-down & Bottom-up Planning enables companies to achieve their objectives efficiently and in a targeted manner while involving all relevant departments in the process. As a result, the quality of the planning output is significantly improved and the planning process is viewed as more satisfactory within the company.

 

 

 

 

Maximising Efficiency

 

Companies must not lose sight of the amount of time and effort required to coordinate the various planning levels. It is vital to use a suitable planning solution with predefined best-practice processes. Pre-built applications enable companies to take a standardised and structured approach to prioritizing and applying KPIs and integrating subplans into the overall plan. This ensures that the planning process is faster across all business units and that Top-down & Bottom-up Planning is implemented with maximum efficiency.

 

 


 

Are you interested in Top-down and Bottom-up Planning using a single application? CLICK HERE.