AACE INTERNATIONAL PLANNING
Chapter 12
Planning
Jennifer Bates, CCE
INTRODUCTION LEARNING OBJECTIVES
What Is Planning? After completing this chapter, the reader should be able to:
“A stitch in time saves nine.” • understand the importance of planning and of establishing
“Prior planning prevents poor performance.” a “planning culture” in an organization,
“When all else fails, follow the instructions.” • identify the planning tools available to the cost engineer, and
• understand the major elements of planning.
Each of these expressions has been heard many times, and
each in its own way repeats a well-known fact: an undertak-
ing that has the benefit of up-front planning and that is exe- THE IMPORTANCE OF PLANNING
cuted according to plan stands the best chance of success. Yet
we often find ourselves feeling rushed, ignoring the need to Planning is of the greatest importance, because in its plan-
plan, and stumbling ahead, planning as we go. When this ning, an organization makes implicit assumptions about its
happens, we usually end up muttering another oft-heard future so it can take action today. It would be convenient if
expression: cost/benefit studies were available to prove the value of
planning. Theoretically, we could measure planning payoff
“There's never time to do it right the first time, by relating the value of what we have achieved through plan-
but there's always time to do it over.” ning to the cost of the planning. Unfortunately, it is a rare sit-
uation that offers the opportunity to quantify both the out-
And after doing it over, we often find we've lost time, money, comes attained through planning and the outcome attained
and credibility. without planning. Accordingly, we must rely on other indi-
cators. The Stanford Research Institute did this in a formal
Planning can be defined as influencing the future by making study some years ago, finding that companies that support-
decisions based on missions, needs, and objectives. It is the ed planning programs experienced superior growth rates
process of stating goals and determining the most effective when compared to companies that did not. The reason for
way of reaching them. This future-oriented decision process this becomes obvious when examined in light of the cycle
defines the actions and activities, the time and cost targets, that leads to growth.
and the performance milestones that will result in success-
fully achieving objectives. The process involves several steps: Given any project or opportunity, a company develops a plan
to maximize that opportunity. In doing so, it uses the best
• setting objectives, information available. When the plan is implemented, activi-
• gathering information, ties are carefully monitored and controlled, using the plan as
• determining feasible alternative plans, a reference baseline. Complete records are maintained
• choosing the best alternative, through the execution phase. Finally, the experience gained is
• communicating the plan, fed back to the company to increase its knowledge base for
• implementing the plan, the next planning action. This cycle represents the learning
• adjusting the plan to meet new conditions as they arise, and curve in action—each repetition makes planning for and
• reviewing the effectiveness of the plan against attain- achieving the next opportunity much easier. Without a firm
ment of objectives. commitment to the planning cycle, a company is continually
12.1
