Business planning is an essential element of leading the company to its success. Defining the primary goals and developing the step-by-step plan demonstrating how to achieve them are the keys to promoting the effectiveness and prosperity of the organization. Any entrepreneur willing to contribute to the development of the business needs to possess appropriate knowledge about the role of HR, appropriate data collection and analysis, and valid methods of implementation in the provision of the effectiveness of the creation of a business plan.
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The Involvement of HR in Business Planning
Though the awareness of the importance of effective HR management has risen considerably during the recent decades among the entrepreneurs, most of them underestimate its significance for efficient business planning. The appropriate involvement of HR in the process of defining the strategy of the company is the key to ensuring that the determined goals will be achieved in a timely manner. There are many reasons to involve HR in the planning process, and we will discuss the most influential of them.
One of the most valuable reasons to promote the participation of HR in the business planning is the relation between the construction of executable plan and consideration of the special skills and knowledge possessed by the employees of the company. A business strategy sets the goals, and the quality of their fulfillment depends on the people working in the organization. Therefore, obtaining valuable information about certain features of the employees from HR specialists is of vital importance for the creation of the realistic plan that can be effectively implemented by the company. Consulting HR specialists and informing them about specific criteria that should be applied while hiring new employees is also very useful, as in such way the company can ensure that the staff possesses all skills that are necessary for achieving the primary business goals. As the demand for various services and products is changing with incredible speed in the modern world, the company needs to involve HR department in deciding what education activities and training can provide the staff with all skills necessary for the long-term implementation of the business plan. If the company fails to involve HR in business planning, it can face the situation when the goals are set, but there are no employees who possess the knowledge necessary to achieve them (Rothwell, Prescott, and Taylor 167).
Business planning often suggests the introduction of certain changes in workplace systems and processes, and that is one more reason to consider the participation of HR in the process. Consultations with HR specialists are necessary for understanding whether certain changes can be introduced effectively or will cause severe negative consequences for the staff. If the company does not investigate this issue efficiently, it risks finding out that certain aspects of the plan are not suitable for the current working environment only after the plan is approved, and the reverse trace is difficult to be made.
Involving HR specialists in the process of setting goals and creating a business plan is a key to ensuring that they can deliver the core points of organization’s strategy to the staff (Society for Human Resource Management 47). Besides, usage of the data collected by HR department is of vital importance for ensuring that the plan is realistic enough.
Collection and Analysis of Relevant Data in Support of Business Planning
Collection and analysis of relevant data are the keys to defining which changes should be introduced with the help of new business plan and which goals correspond to the current priorities of the company.
The complex data can be obtained from the internal environment (company) and the external one (the market). The data collected from the external sources is important for understanding the current trends occurring in the market and helping the company to adjust its business plan to the specifics of the market. Such sources can include statistics, surveys, reports, etc. The data obtained from the firm is vital to understanding what are the pros and cons of current strategies, and the degree of preparedness of the organization to the introduction of new changes. Such sources can include HR reports (turnover levels, skills gaps, recruitment difficulties), statistical data on the balance between the spending and revenues of the firm, etc. (Stevens 55). The obtained data should be analyzed to determine the main issues that need to be addressed in the business plan and outline the current obstacles on the way to company’s success.
The organizational trends, patterns, and metrics discovered after the proper analysis of obtained data should be interpreted in relation to the specifics of the services provided by the company, its workplace, environment, etc. For example, while high turnover is typical and natural for a fast food industry, the same level of turnover determined for the company providing logistic services can be considered a disturbing sign of serious problems. Therefore, the interpretation of identified trends should consider which indices and patterns can have positive and negative effects on this particular company working in a specific industry.
The identification of obstacles and risks that can be met on the way to implementation of the business plan is the essential step to ensuring that the chosen strategy will not lead the company to its decline. The potential problems can be determined based on the knowledge about the external and internal environment of the firm. The experience of other organizations, the level of competition on the market, the current trends in demand for specific services, the economic situation in the country and the world, and many other factors influence the chances of the firm to employ the chosen plan successfully. The skills of employees, the level of organization’s revenues, the turnover, the effectiveness of management department, the level of employees’ job motivation, and other specifics of the internal environment should also be taken into account. The analysis of all of these specifics will help to define which of them contradict certain details of the plan and determine if the subsequent difficulties can be overcome and in which way. Understanding if the benefits overweigh the risks is vital for evaluating the effectiveness of the created business plan. Moreover, every company needs to include ‘risk management’ section in the plan to define what problems can be anticipated and how to prevent them (Kraten 129).
Plan Implementation and Short-Term Changes
One of the most common mistakes many organizations make is proceeding from creation of the business plan right to its implementation. Many companies fail to achieve their goals because of skipping the important stage – constructing the implementation plan. Such plan should contain a detailed description of procedures, activities, assessment methods necessary for the efficient achievement of strategic goals, and operational budget available (Friend and Zehle 247). When such plan is created, all people working in the company have clear instructions what to do and how the results of their work will be assessed. If the firm provides the managers and other employees only with the business plan without the document describing the chosen methods of its implementation, it risks facing the situations when various departments choose different methods of achieving the strategic goal. Such uncoordinated activities inevitably lead to serious problems and decrease the productivity of the work of the employees who face confusion and hesitancy related to deciding what to do next (Taylor 30). Therefore, precise instructions included in the implementation plan are the best basis for ensuring that everyone in the organization knows which steps to make and company functions harmoniously.
One more aspect that should be taken into account by the companies willing to achieve their goals successfully is a timely identification of short-term changes. For example, the company manufacturing clothes for kids must keep a close eye on the changes in the customers’ preferences. If the company does not recognize the latest trends, it risks losing its competitive ability and popularity, which will result in revenues decrease. Therefore, each firm needs to identify the changes quickly and adjust its strategy to them.
For the preparation of this paper, I used the relevant sources providing information about the specifics of business planning, the role of HR in it, and the keys to its successful implementation. The knowledge I obtained while preparing this discussion paper will become a good basis for the development of my planning skills. I believe, the preparation of this assignment has helped me to understand that effective business planning requires a comprehensive approach.
Friend, Graham, and Stefan Zehle. Guide to Business Planning, London: Profile Books Ltd, 2009. Print.
Kraten, Michael. Business Planning and Entrepreneurship: An Accounting Approach, New York: Business Expert Press, 2010. Print.
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Rothwell, William, Robert Prescott, and Maria Taylor. Human Resource Transformation: Demonstrating Strategic Leadership in the Face of Future Trends, Mountain View, California: Davies-Black Publishing, 2008. Print.
Society for Human Resource Management. HR’s Evolving Role in Organizations and Its Impact on Business Strategy. 2008. Web.
Stevens, John. Managing Risk: The HR Contribution, London: LexisNexis UK, 2005. Print.
Taylor, Michael. Accelerating Business, New York: iUniverse, Inc., 2010. Print.