What is Long Range Planning?
Long Range Planning is where financial forecasting meets strategy. This process calibrates your financial capacity with your long-term goals, helping you budget for operations and growth.
Long Range Planning uses forecasts to provide insight into future financial aptitude. An accurate prediction of your finances five years down the line allows you to develop a strategy that will boost your long-term sustainability and preemptively combat potential risks and challenges.
How Will Data41 Improve Your Long Range Planning Process?
Data41 employs data analytics to give you the most precise sales and revenue forecasts to aid in your Long Range Planning. We specialize in Financial Planning and Analysis (FP&A) and implement software like IBM Planning Analytics. Our data-driven approach offers a clear understanding of your company’s patterns and potential risks, making it easier to decide the best actions to take toward your long-term objectives. We’ll take your data from source all the way to visualization, helping you identify problems and opportunities!
What Elements Should You Include in Your Long-Range Plan?
- Timeline – Your plan should look at least five to ten years into the future.
- Scope – Your plan should consider all funds pertinent to your top priority goals.
- Frequency – Your organization should update long-term planning activities as necessary to guide the budget process.
- Content – Your plan should include your financial forecasts and analysis, strategies for achieving and maintaining financial balance, and scales to monitor your performance.
- Visibility – This information should be effectively communicated to your company. They should be able to easily access your long-range plan so they can adhere to it.
What Are the Steps to Long Range Planning?
Long Range Planning is all about crafting shorter-range plans to hit meaningful objectives within a short period of time. These small tasks will all build upon themselves to accomplish that long-range goal. It’s like a mosaic: one big picture comprised of a bunch of smaller pieces.
Take building houses, for example:
- Mobilize. Create blueprints for your houses. Identify and coordinate key personnel (i.e., architect, developer, contractors, carpenters, electricians, etc.). Obtain proper permits and identify policies/protocols that affect your plan. Assess finances. Determine materials needed.
- Analyze. Gather detailed information about components from the previous step (i.e., revenue, expenses, debt trends). How much does labor cost? How much do materials cost? How long does it take to obtain permits? Does your pipeline allow you to take on potential new construction projects when you have them planned? Will this project trend your revenue in the right direction? What can you do differently to make this project more successful than the last?
- Decide. With the data collected in the last step, break down your long-range plan into bite-sized chunks. Decide the proper sequence of events, then map out short-term tasks while keeping your long-term goals in mind and making sure they align with your budget forecast. What good is a roof if it has no frame to sit on?
- Execute. Begin building! Your strategy will become operational through your budget, financial performance measurements, and action plans. Monitor your progress regularly.