What is a Planning Control Cycle?
Any new project needs thorough planning of all its stages. A well-planned project will involve thorough research, planning, specific statement, and specifications of purpose and objectives. It will also ensure that the project is aligned with the broader goals and objectives of the company.
All this planning and groundwork is given the name of Planning Control Cycle. The cycle is an attempt to bring together the multiple facets involved in bringing a single project into execution.
It also serves to organize the planning process into a step-wise or phase-wise set of activities for project participants.
Project managers need to assess how to plan out a project rollout, considering key factors like costs, locations, and business operations (active and proposed by the project).
One of the most effective ways to approach a project planning process is the planning and control cycle.
Seven Steps of the Planning Control Cycle
This is a seven step process that covers key project stages like planning, objectives, and control.
1. Setting Project Objectives
Placing specific and measurable objectives is a basic step to kicking off an effective planning and control process. The goals set in this phase have to follow the SMART principles:
S = Specific,
M = Measurable,
A = Achievable,
R = Relevant,
Another option to set up specific objectives is to set measurable levels for all targets.
For instance, achieving a 30% reduction in downtime in the next three months. Or reducing raw material costs by 15 % in half a year. Goals for the longer term could be to reduce COGS by 20% by the next year.
Objectives are also set with benchmarks in mind. Comparing performance or goals with those of competitors and past performances.
2. Identify Strategies
After we have set objectives, a route map for achieving them is needed. Picking which strategies to use in a project will base on the objectives set and their priority in the planning process.
Identifying strategies usually involves a thorough examination of relevant exterior and interior forces for a business.
The result of this analysis will yield elements which will determine what sort of strategy to apply.
A business needs to know about the external forces impacting their business like the economic situation of their area, country, and region.
Similarly, there could be government policies that could be impacting the business efficiency.
Knowing about these factors will help businesses plan according to the opportunities and threats present in the environment around them.
There are several approaches to external analysis but the most common and easiest to use is the PESTEL Analysis.
This is an analysis model that is based on Michael Porter’s Five forces model. It involves assessing the Political, Economic, Social, Technological, Environmental, and Legal forces impacting a business.
For assessing the internal situation of a business, there are various models available.
These could be the Boston Consulting Group’s matrix for determining top and low performers.
Another option can be Michael Porter’s value chain model which assesses the primary and support activities of a business. There are other options also available for assessing the internal operations of a business.
In planning and control, this step involves measuring financial performance and assessing it in light of the business’s goals. There are many financial parameters, and financial ratios like income per share (EPS), debt to equity, or Profit Margin ratio.
Non-financial metrics can be evaluated through the common SWOT or GAP analysis.
The primary goal here is to assess how the planning or the strategy is meeting its purpose and check for deviations and make corrections as needed.
After the assessment process, the project managers can decide if they need to apply different strategies.
At this point in a planning and assessment cycle, there is the option to make a strategic change in the planning process about the project, or parameters related to its working.
5.Implementation of Strategic Plans
After alternative strategies are assessed, it is time to implement the changes needed and evaluate different strategic courses to select.
This step involves examining the modifications that are required.
Once they are identified, it’s time to apply the strategic plan. Well-defined communication of purpose, the layout of roles that participants will be adopting, and areas of responsibilities are essential elements of a successful project plan.
Having clarity about who is responsible for what scope of work leaves no ambiguity and allows project members to complete their tasks without confusion about overlaps.
6.Measuring Performance and Comparing Plan
This step involves assessing the goals and performance against them. This can be a review phase where performance against the critical success factors (CSF) is assessed.
This is what is commonly called performance evaluation. Criteria for performance measurement could be on a financial basis like profitability, return on capital, etc.
This is entirely dependent on the nature of the project and performance evaluation can also be done based on non-financial parameters like value addition, customer engagement, and even CSR values.
7. GAP And Variance Analysis
In the final stage of the planning and control cycle for any organization, the strategic plan and control cycle is analyzed.
The GAP analysis for the goals and objectives identified and achieved is analyzed. Any divergence from the plan is reported and corrective measures are taken.
At the last level of any planning process for a project, the tactical planning is evaluated. The GAP analysis involves examining the difference (gap) between the achieved goals and targeted objectives. Issues and learning points are identified and ideally noted for future reference. Any deviation from the plan is evaluated and remedial steps are implemented.