It is very important that the planning is done in the particular framework of the time, the performance and the cost. The importance of the time has been explained above and now we will try to understand the importance of the cost in the process of the planning. Money value of any type of the plan is referred to as the cost. The cost in the process of the planning largely depends on the competition, the various products that are to be used and the types of the services that are to be provided. The cost of the planning can be adjusted at the different stages of the process with the help of the various alternatives or the substitutes that are available for the various products and the services.

One important point that must be remembered during the process of the implementation is that the cost must remain between the planned margins. And if the costs at any time cross the margins, the whole process of the planning is very greatly affected.

For keeping the planning within the planned costs, it is very necessary to keep the control over the resources and its use as the actions depends a lot on the resources that are available.

The process of planning includes the determination of objectives and outlining the future actions that are needed to achieve these objectives. Various steps that are followed in the process of planning are:

(i) Identifying the problem: It involves the identification of the aim for the fulfillment of which the plan is being formulated. If a new plan is require or the modification of an existing plan could help in achieving these aims.

(ii) Gathering information about the activities involve: An effective plan needs complete knowledge of the activities involved and their effect on other external and internal activities.

(iii) Analysis of information: This information is then analysed minutely and the information related with similar subjects is classified so that similar type of data can be kept together.

(iv) Determining alternate plans: There are alternate plans available for the achievement of the objectives and ingenuity and creativeness are required as some plans are also developed at this stage.

(v) Selecting the plan: At this stage the plan which is acceptable to the operating personnel is proposed. The adaptability and the cost of the plan are also taken into consideration.

(vi) Detailed sequence and timing: Detailed like who will perform which activity under the plan and the time within which the plan should be carried out is determining in this step.

(vii) Progress check of the plan: The provisions are made for the follow up of the plan as the success of any plan can be measured by the results only.

Planning Process – Types of the Plans
1. Planning Hierarchy
The concept of the feeling of the plans at the different hierarchical levels can be understood a great deal with the help of the planning hierarchy. Here the different plans are treated as the hierarchy, involves going towards the lowest hierarchical plan from the broader hierarchical plan. The planning hierarchy mainly consists of the following type of the plans –

1. Business plans – These types of the plans include whole of the business.

2. SBU plans – These plans act as the strategic business unit plans including the business units.

3. Corporate Plans – These plans act as the plans of the organization involving its activities. It is the total plan for the whole organization, a corporate body working as a functional unit. The complete unit is covered under such plans.

4. Departmental plans – These plans are also referred to as the functional unit plans and cover the branches, the projects, the departments, the units that are separated for the functional efficiency.

2. Conceptual planning
Provides some type of the guidance for the planning but the major drawback in this type of the planning is that the planning unit is not at all visible, whose presence is very much critical in the planning. The conceptual planning must consist of the following –

1. Policy – One time decision i.e. usually effective for a length of the time.

2. Objectives – Focus direction of an achievement and the general outcome.

3. Goals – Very well defined quantitative or the numerical objectives by the end of a particular period with the plan. The practical orientation to the implementation of the plans is obtained here.

4. Procedures – Process rules that are carrying out the action.

5. Rules – Fixed direction unless expressly revised.

6. Budgets – Plans converted to the quantities and in the terms of the money having the feature of the interpretation in the statistical and the accounting terms.

7. Vision Statement- The statement includes the purpose operating for the future and then to take the others in the vision fold of the organization.

8. Mission – The purpose of offering the goods and the services in the terms of the beneficiary.

9. Variable plans – In order to satisfy the different types of the contingencies, it is a necessity to draw different types of the plans. The variations may include drawing a realistic plan and then following this step by the preparation of an optimistic and pessimistic plan.

3. The Plan document
For getting a planned document, all the above steps are performed and during this, one particular thing to kept in mind is that the plan must start with the broader objectives and must be linked stepbystep to the actionable and the implementation activity. The plan document must consist of the following –

a. Premising – This step is needed at the each stage of the planning. Before undertaking the plan, the strength, the weakness, the opportunity and the threats (SWOT) can be calculated depending on the premises.
b. Vision – The way in which we visualize our future.
c. Mission – What we aim to deliver to the beneficiaries.
d. Policy – What restrictions on means we will note during the execution of the plan.
e. Objectives – What we will keep as the broad directions for the achievement.
f. Goals – Translate the objectives into the quantitative and the financial goals, which can be achieved by the operational people.
g. Procedures – To prioritize and then draw the sequence of the action.
h. Budget – Convert to the money terms in order to establish the standards for the evaluation.

4. The program
Whenever any activity is carried out, it is carried out to achieve one thing or the other. But the results that one expects to be obtained must be achieved in the proper frame of the time, so that they can be used at the right time for various other activities. Hence, in order to get the results within the certain time frame, a program is drawn.

The projects of the diverse nature within a subject are included in the program. The program is actually a clubbing together of the things and for getting a good view of the word program, it can be understood as the plan document on a much wider scale than the planning document.

Different steps involved in the planning are :-
1. Premising

a. Acts as a great tool for carrying out the planning of the business.
b. Act as the judgments about the future plans, depending on the type of the situation in which they will work.
c. Decides whether to proceed with the plan or not.
d. Helps in basing the judgment about the certain things that may work or not.
e. Must be correct as in case they are wrong, then the whole plan will go wrong.
f. Help in tackling the environment around a certain plan.
g. The premises must be consistent to all the plans and the sub plans.
h. A number of premises can be used to arrive at a certain plan.
i. The premises can be the possible growth in the market, the availability of the resources, the nature of the future competition, the strategic considerations etc.

2. Information / intelligence collection and the forecasting:

a. In this step, all the relevant data that is needed for the plan is collected.
b. Both the primary data and the secondary data can be used.
c. Primary data can be collected by interviewing the people and the secondary data is in the printed form or the published data that is available.
d. This data is interpreted in terms of the future utility.
e. In this step, the forecasting of the various changes, which take place during the implementation process of the data, is done.
f. Ultimately this forecasts acts as the premises for the future planning of the activity.

3. Establish vision:

a. Vision is what we do not see but what we feel is in store for the future.
b. Vision is dreaming as well as having faith in the activities that are being implemented.
c. Vision is very much personal in the nature.
d. It is required for giving the much needed direction for moving ahead in the future.
e. Acts as the compass that guides an individual in the correct direction.

4. Define mission:

a. Serves the beneficiaries depending on their needs and the satisfaction.
b. The mission is stated in terms of the recipient.
c. The mission is thought of in the angle of the receiver of the goods and the services.
d. It is very subjective in the nature.

5. Decide the policy:

a. The guidelines in the nature of an umbrella of the decisions of the long term are settled mainly to provide a firm guideline for many subsidiary decisions.
b. The policy can be written or unwritten in the nature.
c. The boundaries can be defined with the help of the various policies.
d. Provides the discretion within the boundaries, hence helping in the adjustment of the performance to the situation.

6. Set the objectives:

a. Objectives are defined as the achievements that mainly aim at in the broad terms to establish some of the guidelines, in order to take the required action.
b. Objectives can be many in the number.
c. May consist of the hierarchy along with the network of the objectives depending upon the divisions like the strategic business units, the departments and the levels in the organization.
d. It is very essential that these divisions are mutually consistent and also well coordinated in the nature.
e. Setting up of the objectives is done at the higher levels of the organization.
f. The objectives must be able to help the subordinates in determining the goals in the concrete terms.
g. Goals are actually in the terms of the performance.

7. Set the goals

a. Are short term and are operational within a financial year as these are more tied up with the budgets.
b. Provide the much needed, practical orientation to the plans.
c. Goals are divided into people working, so that each one has a target to achieve.

8. Draw the program

a. For the achievement of the objectives simultaneously, synchronization is very necessary.

9. Convert the program into the budget:

a. Budget can be defined as the available achievable targets and expressed in the money terms with the revenue and the expenditure for all the activities aiming at the possible surplus.
b. All the plans are converted into the budget.
c. After this conversion, the budget is used as the control and the evaluation document.

10. Collect the information on the feedback:

a. After the implementation, this step is performed.
b. The various required corrections in the future plans are carried out.
c. The revised plans are reintroduced.

Sources acting as the guide for the planning are:-

1. Navigational tool

a. Planning acts as the navigational tool for the management of the organization.
b. Management has the responsibility of navigating towards an objective.
c. Management has to arrange detours on its way to the objectives.
d. Planning helps a lot in the navigation.

2. Performance standard

a. Establishing the performance standards is very much necessary.
b. Without the planning, the controlling becomes very difficult in the nature.
c. Performance standards are set by the planning in terms of the achievement.
d. The plan acts as the control document.

3. Tool to establish the synergy

a. With the help of the planning, the activities become more organized in the nature.
b. The group activity can be made functional with the help of the planning.
c. Planning should be based on the people.
d. Planning establishes the synergy within a group.

4. Tool to define the jobs

a. The role and the description of the job of everyone can be understood with the help of the further planning.
b. Planning makes job meaningful to everyone.

5. Bridge to gap the present with the future

a. Planning must bridge the gap that is present between the present and the future.

6. Method to evaluate the activities

a. The activities of the tomorrow can be evaluated in the terms of those today, with the help of the planning.
b. Planning is actually the building of today for a better tomorrow.

7. Implementing tool for the SWOT

a. With the help of the planning, the SWOT analysis is able to spell out the organizational strengths and the weaknesses and then the opportunities and the threats available.
b. The internal situation is combined with the external one all the time.
c. One is able to think beyond the organization.
d. The situation can be studied within which an organization is growing.

8. Link with business

a. Organization is linked with the business objectives with the help of the planning.
b. This acts as the organizational tool for doing the business.

9. Opportunity to develop the consistency

a. Various new techniques can be established with the help of the planning.
b. These techniques help a great deal in building the organizational efficiency.
c. Helps in improving the consistency of the management thoughts and also its effectiveness.

10. Result orientation

a. Planning makes the management implementation oriented in the nature.
b. Serves the raison d’être of the management.

11. Flexibility

a. Planning should be made flexible in the nature.
b. By this, the changes that occur in the internal and the external environment can be absorbed.

12. Method to enable the resource planning

a. The resources act as the single most constraint in the planning.
b. Planning is done on the basis of the resources that are available.
c. Planning should be lopsided, as with the help of this, very well oriented results can be obtained.

A large number of the techniques are used in the process of the planning and these techniques are very much needed and important, as these help a lot in performing the planning process in a very efficient manner.

As explained above, the planning acts as a great control tool and this ability of the planning is mainly due to the use of some of the techniques, which can be summarized as the follows

1. Computer assistance

a. Computers as we all know have a very important role to play in almost everyone’s life in today’s world and the assistance of the computers has also eased the process of the planning in a great way.
b. The computers can easily churn high amount of the data at a really great speed.
c. MS Access acts as the very important tool for the database.
d. MS Access helps a lot in storing and analyzing the data.
e. MS Excel helps to test the different alternatives.
f. MS Word helps in writing and in working on the supporting graphical systems.
g. MS Power Point helps in the presentation work.
h. Various types of the softwares are available that help a lot in the research work, forcasting, the statistical handling etc.
i. The groupware helps a lot in linking a group to work on planning simultaneously.

2. Gantt charts

a. First introduced by Henry L. Gantt.
b. Called as the Gantt bar charts.
c. In the beginning, this method was mainly used for showing the various time relations with the events.
d. The whole plan is divided into a series of the activities and these are shown with the help of the bars against the time planned.
e. With the help of this technique, one is able to develop a relationship between the different activities and see when they are starting and ending and find out what is the sequence to be followed to complete the plan in the shortest possible time.

3. PERT (Program Evaluation and Review Technique)

a. Was developed by the US navy.
b. At that time, was used mainly for the development of the Polaris weapon system.
c. Acts as a very important and useful planning and the control tool.
d. It is a flow diagram.
e. Helps in showing how the different activities lead to one another and the time taken.
f. The completion of any event is shown with the help of the circles.
g. The time likely to be taken is shown with the help of the arrows.
h. After this a critical path is drawn by linking the events which take the longest time and which involve the least slack time.
i. With the help of the critical path, the critical events on which the total planned time is dependent can be shown.
j. When there occurs any type of the delay in an event, the Program Evaluation and Review Technique chart is modified every time to draw a critical path.
k. The aid of the computer is taken to work out a critical path, when many events are involved. But during this process, much detailed planning is needed, so it can be said that it is not suitable for the general planning.
l. It emphasizes on the time but the cost factor is not at all considered.
m. After this, the Program Evaluation and Review Technique was born.
n. The Program Evaluation and Review Technique is much better for the direct costs but not very suitable for the indirect costs.
o. With the help of this technique, the feedback about where we exceed the costs (if similar accounting records are kept) can be easily obtained.

4. CPM (Critical Path Method)

a. It is a planning tool.
b. Helps in the establishment of the relationship between the activities, the time, the cost and its result in the performance.
c. Tells about the various activities which are critical in the execution of the plan.

5. Statistical methods

a. These methods help in the calculation of the mean, the mode etc.
b. Helps in working with the probabilities, the scatter diagrams, the regression analysis, the simulations etc.

6. Graphs and the charts

a. Help a great deal in the pictorial representation of the statistical data.
b. Explains the salient features of the statistical data.
c. Some ways for the representation of the statistics may include the following methods

I. Columnar charts
II. Pie charts
III. Line charts
IV. Decision trees

7. Scenario building

a. This method is very useful when the concept is there but thinking in the terms of the various alternative outcomes is to be done.

8. Management by the objectives (MBO)

a. By deciding the objectives and the goals for each person involved, a great amount of the clarity in the role, the performance is obtained.
b. The business objectives can be built and then can be divided further among the different persons involved, depending on the ability and the role assigned.
c. The Management by the objectives acts as a very critical and also very useful tool for the controlling and the motivational purposes.
d. Also acts as a very good evaluation tool.
e. The performance of the people acts as the basis for the evaluation.
f. But the Management by the objectives method possesses some drawbacks also, which can be summarized as the follows

a. The long term planning receives a great neglect – ion at the hands of the people.
b. Does not has the ability to provide proper guidance to the superiors.
c. Such circumstances are often faced by the organization, which forces the people to make the changes in the goals and the objectives time and again.

9. Research methodology

a. Plays a very vital role in the gathering of the information.
b. Involves the determination of the census, preparation of the questionnaire, collection of the secondary data, collection of the primary data, interpretation of the collected data etc.

10. Budgeting

a. For the execution of the plans, this step is very much important.
b. The plans must be converted to the budgets.
c. The method of the planning on the past performance was once very widely used but now it is not at all a suitable or a valid method.
d. Now zero based budgeting is used.
e. In this type of the budgeting, the process is started with the zero base and all the projections are made independent of the historical performance.

11. Forecasting methods

a. Forecasting refers to the process of the anticipation of the certain behavior of the business surroundings, the technology, the demography, the value trends etc.
b. The forecasts can be done by the government or the national banks, associations etc.
c. The forecasts are in the published form.
d. Are available as the printed secondary data.
e. The Delphi method is very often used in the forecasting.

12. Balanced scorecard:

a. Acts as a measurement system as well as the management system.
b. Helps the management in carrying out the translation of the strategy into the actions.
c. Feedback on the internal business processes and the external outcomes can be obtained.
d. A balance of all the critical factors involved in the strategic planning can be obtained.
e. Acts as a very comprehensive system and covers all the aspects of the business unit.