by Michael Coveney, co-author of "Budgeting, Planning, and Forecasting in Uncertain Times"
Most people will agree that planning is a vital activity for every corporate body. It is often carried out according to a management calendar. Long-range and resource planning tends to take place on an annual basis, forecasting tends to be quarterly, while reporting is monthly driven. This timetable of planning events was established back in the 1920’s where James McKinsey described budgeting as a way of setting standards of performance and a means of coordinating activities between departments. There’s nothing wrong with this concept of planning, but today’s business is very different from that of 100 years ago.
With the advent of the Internet and e-commerce, physical boundaries have been removed making it relatively easy for competitors to enter new markets with new products in a fraction of the time it took in the past.