PLANNING

TECHNIQUES, TOOLS
AND THEIR
APPLICATIONS
PLANNING TECHNIQUES are those
methods or processes followed by
planners in preparing or evaluating their
plans, programs, and policies. For
effective planning in today’s dynamic
environment, different techniques and
tools must be used, such as forecasting,
contingency planning, scenario
planning, benchmarking, and
participatory planning. Here are the
definition and examples of some
planning techniques and tools.
A. FORECASTING
Forecasting is making predictions
of what is likely to happen in the
future. It shows that the managers
know something of future happenings
even before things actually happen.
 Forecasting is the process of estimating
the relevant events of future, based on the
analysis of their past and present behavior.

The future cannot be probed unless one

knows how the events have occurred in the
past and how they are occurring presently.
The past and present analysis of events
provides the base helpful for collecting
information about their future occurrence.

Forecasting may be defined as the

process of assessing the future normally
using calculations and projections that take
account of the past performance, current
trends, and anticipated changes in the
foreseeable period ahead.
 Forecasting provides a logical
basis for determining in advance
the nature of future business
operations and the basis for
managerial decisions about the
material, personnel and other
requirements.
 Whenever the managers plan
business operations and
organizational set-up for the years
ahead, they have to consider the
past, the present and the prevailing
economic, political and social
conditions.
• Forecasting is the basis of planning.

When a business enterprise tries to

look into the future in a systematic
and concentrated way, it may discover
certain aspects of its operations
requiring special attention.
 However, it must be
recognized that the process of
forecasting involves an element
of guesswork and the managers
cannot stay satisfied and relaxed
after having prepared a forecast.
Remember:

The forecast will have to be

constantly monitored and revised-
particularly when it relates to a long-
term period. The managers should
try to reduce the element of
guesswork .
in preparing forecasts by collecting
the relevant data using the scientific
techniques of analysis and inference.

On the basis of the definition, the

following features of forecasting can
be identified:
1. Forecasting relates to future events.
2. Forecasting is needed for planning
process because it devises the future
course of action.
3. It defines the probability of happening
of future events. Therefore, the
happening of future events can be
precise only to a certain extent.
4. Forecasting is made by analyzing the
past and present factors which are
relevant for the functioning of an
organization.
5. The analysis of various factors may
require the use of statistical and
mathematical tools and techniques.
Steps in forecasting:

1. Developing the Basis:

The future estimates of various

business operations will have to be
based on the results obtainable through
systematic investigation of the
economy, products and industry.
2. Estimation of Future Operations:

On the basis of the data collected through

systematic investigation into the economy
and industry situation, the manager has to
prepare quantitative estimates of the future
scale of business operations. Here the
managers will have to consider the planning
premises.
3. Regulation of Forecasts:

It has already been indicated that the

managers cannot take it easy after
they have formulated a business
forecast. They have to constantly
compare the actual operations with
the forecasts prepared in order
to find out the reasons for any
deviations from forecasts. This
helps in making more realistic
forecasts for future.
4. Review of the Forecasting Process:

Having determined the deviations of the

actual performances from the positions
forecast by the managers, it will be
necessary to examine the procedures
adopted for the purpose so that
improvements can be made in the method of
forecasting.
B. CONTINGENCY PLANNING

• Business contingency plan is a

course of action that your organization
would take if an unexpected event or
situation occurs. Contingency can be:
▸ Positive- surprise influx of money
▸ Negative- fire, flood, data breach,
major network failure

• Contingency plans are an important

part of your overall business continuity
strategy because they help ensure your
organization is ready for anything.
 • Many large businesses and government
organizations create multiple sets of
contingency plans so that a variety of
potential threats are well-researched and
their appropriate responses are fully
practiced before a crisis hits.
• Contingency planning can be thought
as a proactive strategy while crisis
management is more of a reactive strategy.

▸ Contingency plan- helps to ensure you

are prepared for what may come.
▸ Crisis management plan- empowers you
to manage the response after the incident
occurs.
 Contingency factor:
▸ may offer alternative courses of
action when the unexpected happens
or when things go wrong
▸ called “trigger points” indicate when
the prepared alternative plan should be
implemented.
C. Scenario Planning

• Scenario planning is making

assumptions on what the future is going
to be and how your business
environment will change overtime inlight
of that future.
• Scenario planning is
identifying a specific set of
uncertainties, different “realities”
of what might happen in the
future of your business.
Illustrative Examples:

a. Farmers use scenarios to predict

whether the harvest will be good or bad,
depending on the weather. It helps them
forecast their sales but also their future
investments.
b. Military institutions use scenario
planning in their operations to cope with
any unlikely situations, anticipating the
consequences of every event. In this
case, scenario planning can mean the
difference between life and death.
Scenario planning is also a contingency
planning, but it is a long-term version of
the latter. Several future states of affairs
must be identified, and alternative plans
must be prepared in order to meet the
changes or challenges in the future.
• Some examples of changes or
challenges that may arise in future
scenarios are:

c. environmental pollution
d. human rights violations
e. climate and weather changes
f. earthquake damages to communities,
and others
D. Benchmarking

It refers to another planning technique

that generally involves external
comparisons of a company’s practices
and technologies with those of other
companies.
Purpose:

Its main purpose is finding out

what other people and
organizations do well and then
plan how to incorporate these
practices in the company’s
operations.
Techniques:

‣ External benchmarking- to achieve

superior performance
‣ Internal benchmarking- to encourage
employees working in different wok units
to learn and improve by sharing one
another’s best practices.
Three Ways to Use Benchmarking:

• Process benchmarking

This is all about better

understanding your processes,
comparing performance against
internal and external benchmarks,
and finding ways to optimize and
improve your processes. The idea is
that, by understanding how top
performers complete a process, you
can find ways to make your own
processes more efficient, faster and
more effective.
• Strategic benchmarking.

This compares strategies,

business approaches and business
models in order to strengthen your
own strategic planning and determine
your strategic priorities. The idea is
to understand what strategies
companies (or teams or business
units) and then compare these
strategies with your own to identify
ways you can be more
competitive.
• Performance benchmarking

This involves collecting

information on how well you’re
doing in terms of outcomes and
comparing these outcomes
internally or externally. This can
functional performance
benchmarking, such as
benchmarking the performance
of the HR team or the marketing
team.
E. PARTICIPATORY PLANNING

• Participatory planning is:

➤ an urban planning paradigm that
emphasizes involving the entire community
in the strategic and management
processes of urban planning; or,
community-level planning processes, urban
or rural.
➤ often considered as part of community
development
➤ aims to harmonize views among all of
its participants as well as prevent conflict
between opposing parties
➤ marginalized groups have an
opportunity to participate in the planning
process
➤ a planning process that includes
the people who will be affected by
the plans and those who will be
asked to implement them in all
planning steps.
• Positive results of PARTICIPATORY
Planning:

➢ Creativity
➢ Increase acceptance
➢ Understanding of plans
➢ Commitment to the success of plans
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