Plan-Do-Check-Action (PDCA)

Sumber:http://financial-planning-diy.blogspot.com/2010/02/plan-do-check-action-pdca.html
Have you ever come across the idea of PDCA? Well, I got this idea during the implementation of ISO 9000 of my company way back to the year 1997. You may puzzle what the heck is this ISO going to do with financial planning? Anyway, the main point here is not talking about ISO but the idea of PDCA.

Plan
We always hear that if we “fail to plan”, then we “plan to fail”, isn’t it? Yes, it is and this is why planning plays extreme important role in our journey to success and it should come first in ourfinancial planning. In short, a good plan will provide a clear road map that shows us where and how we should go.

We all have financial needs. Some of these needs require the support from certain monetary value that requires time to accumulate. Therefore, in our plan, we should first set the priority of these needs, set the time frame and decide how we are going to reach our “destinations”. Just like a road map that shows you how to get from point A, on what transportation, so that you are able to arrive point B on time.

Do
A plan means nothing without implementation. They are just wordings on a piece of paper or two. That is it. Therefore, we need to execute our plan in order to make it alive. Of course, at this stage, you should always bear your plan in mind as it always reminds you your target and time frame.

Check
After sometime, we need to review the progress of our plan. To be effective, it should be analyze on regular interval to ensure our journey is on the right track. Forfinancial planning, we have to study, against your benchmark, the effectiveness of our asset allocation, the performance of our investment, sufficiency of insurance coverage etc on timely basis.

Action
Of course, your plan will give you some clues on which part need to be adjusted. Again, action of adjustment is required to ensure you are moving toward to your destination. The adjustment may not necessary only on your “how to get there” (i.e. your methods) and “when to get” (i.e. your time frame), but also “what to get” (i.e. your overall plan).

I have been practicing PDCA for years and it works. By having these steps in mind, what we need to do next is to refine the process through continual learning.