Planning, rethink forced

CONVENTIONAL approaches to business planning are being rendered redundant by today’s fast-changing technology.

The five-year business plan is no longer viable and even the value of an annual planning session is to be questioned.

Plans now need to be revisited and revised not annually or even biannually but monthly, probably weekly or possibly daily.

‘Killer applications’ that change the way society works and functions are now being developed at the rate of more than one a year and this frequency is increasing exponentially due to technologies such as the Internet.

Traditional planning models are increasingly less effective at dealing with the kinds of problems that killer applications and rapid technological changes cause.

In my paper Strategy and the Digital Age – Five New Forces, I argued that today’s decision makers must consider what will happen when computer chips are not just in computers but in every device and article – and what will happen when these computers become part of an exponentially growing network.

Transaction cost economics and technology’s effects on the efficiency of firms and markets means managers must constantly consider what will happen to the shape and size of their firms.

They must continually evaluate what activities the technology will allow to be performed in the market, plus what functions may indeed by brought back within the firm itself.

In the case of many of the phenomena of the late 1990s such as the Internet and the World Wide Web, there is no large firm, government body or ruling institution in charge.

In a very real sense, nobody has a better right of access.

Nobody, not even the largest corporation, can shout louder.

The smallest player, the individual, has a right and an opportunity to be seen and heard.

Managing in a world where significant issues are not really within the control of a government or department, or under the remit of a large organisation, will be a new, and often scary, experience for most managers.

Not knowing where competition may come from, because it may not be upfront and visible, will also require a constant revisiting of planning.

When competition comes head on, or at least from the side or behind, it can be dealt with, even if slowly.

When competition has the potential to come from a computer in the bedroom or a seventeen year old in another country, life becomes less predictable.

• Leyland Pitt is one of the world’s leading Internet experts and is currently a visiting professor of marketing at Curtin University.