Annual Reports vs Strategic Plans Essay

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The paradox of strategic planning is that the fact that market and industry conditions often force companies to shorten their R&D and strategic plan execution timeframes while the complexity of products and resulting coordination with suppliers, buyers and channel partners increases. This paradox of strategic planning is the pressure to drastically speed up the R&D and launch processes while at the same time ensuring the same agility, accuracy and precision of execution over the long-term that more conservatively-based plans required. The outsourcing of new product development in highly competitive industries includes Motorola and relying on Solectron and Flextronics for R&D and convergence product development is an example. In order to solve the paradox of strategic planning of long R&D cycles accentuated by short product lifecycles, brand marketers in commoditized industries rely on outsourcers as well. Clearly trying to compress the amount of time needed to create new convergence products, outsourcing partners are in the process of re-ordering the strategic planning process in commoditized industries (Crittenden, Crittenden, 2008).

As process clarification and process re-engineering are critical for financial statements to be accurate, auditable, and verifiable the same is true of the strategic planning process. The magnitude of the process clarification and re-engineering however is much greater, as peoples' roles need to be redefined in addition to systems as well (Zohar, Tenne-Gazit, 2008). This aspect of the strategic planning process which centers on gaining collaboration within an between departments is often the most problematic and one that causes the majority cost, confusion and distractions in getting plans turned into results. As a result of this need for close collaboration between departments and the resulting process re-definition often these factors create delays in even the most well-defined strategic plans. Conversely in the development of annual reports require processes that are relatively well-known and resist change due to the need for compliance and accuracy. As a result of the high need for collaboration across teams in the strategic planning process and the fact there are many unknowns being dealt with, relative to the stability and predictability of processes for creating annual reports, over time companies vary in their perception of time as well., it is common to see urgency and a more compressed view of time in accounting departments and teams, while in R&D there are much longer time horizons. In certain organizations these variations in the perception of time can be dramatic and even stressful, where accounting and finance want to get costs associated to R&D within a given period only to find the ROI of the investments made will not be available for months or even years. This variation in the perception of time often needs to be intermediated by sharing a common set of objectives so each group can concentrate on their specific area of a strategic plan.


The variations in time horizons for creating annual reports vs. strategic plans are much more systemic and process-based than many realize. Depending on the industry for example there can be significant variations in the perception of time within an accounting department relative to R&D and strategic planning departments as well. What exacerbates the time variations is the level of change required with each strategic planning iteration or cycle, as greater levels of collaboration and coordination are needed the faster the R&D and strategic planning cycles are. In addition, the perception of financial statements being short-term and strategic planning being long-term is only partially correct. For financial statements to be accurate and in compliance to the SOX Act of 2002 there are massive process and it system changes required, with many companies taking over 12 to 18 months to get these systems in place. When one considers the systemic, underlying dependencies of creating accurate and auditable financial statements relative to the strategic planning process, it becomes clear there is much more coordination and synchronization than initially is seen just from the publish date of these documents.


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