We have all heard the saying that “failing to plan is planning to fail”. While we all know this to be true, planning takes even greater importance in the context of business. This is because business ventures are usually funded using the money of investors and therefore such money must be used carefully. It is not enough to simply plan a business venture or project; it must be planned with great detail and care while considering any potential hindrances to the project.
Consequences of Ineffective Planning
As aforementioned, the primary consequence of ineffective planning is the potential failure of the venture or project. Project failures must be avoided as far as possible, as losses that are sustained due to project failures could potentially have a crippling effect on the organization. In severe cases, it may even lead to the bankruptcy of the organization.
Effective planning allows an organization to foresee any potential threats to the project or to predict any obstacles to successful project completion. Ineffective planning means, therefore, that these potential threats are not identified and thereby leading to extra cost, delays and possible project failure.
Ineffective planning also means that an organization does not examine the feasibility of the project in terms of cost, time and resource requirements. Estimating resource requirements in any project or venture is essential to know if the project can be reasonably undertaken. Reliable IT project resource estimation in particular, can be an area of difficulty due to the lack of tangible output of the project as well as the fact that IT projects are usually very unique; in other words, no two IT projects are exactly the same, this having the consequence that the planning and resources required for each project are different. To solve this problem, there are certain specialized systems in the market for estimating the resource requirements for IT projects.
If a project is going to be undertaken that requires external funding, then a detailed project plan is essential. For example, if a firm wants to obtain a bank loan for a project it wishes to commence, then the bank requires a full plan of the project and will grant the loan based on their scrutiny of the plan. Therefore, lack of a proper plan will also limit the sources of funding for a project.
In conclusion, effective and comprehensive planning is required for all business ventures and projects, if the business desires to maximize the probability of the successful completion of the same. Information systems that facilitate planning of projects are available for the planning of complex projects. If an organization finds that it does not have the necessary skills in-house to plan a high-scale venture or project, it may even outsource the creation of the plans to companies that specialize in this area.