The one sure thing about annual planning is that it will be wrong – its underlying assumptions have been flawed since LucaPacioli invented double entry bookkeeping in 1494.

The eight reasons why the annual planning process should be replaced are because it:

  1. Takes too long – too much detail and too many iterations.
  2. Costs too much
  3. Does not focus on performance drivers
  4. Leads to dysfunctional behaviour, building silos and gaming the system
  5. Undermines monthly reporting (monthly budgets are poor targets)
  6. Is an anti-lean process
  7. Does not help run the business as it is out of date as soon as the ink has dried
  8. Has allocations that budget holders have no control over

Read this article which looks at the foundation stones of rolling planning, a more useful alternative.

avid’s whitepaper.