What is Integrated Business Planning?

Integrated business planning refers to technologies, applications and processes of connecting planning function across enterprise to improve organisational alignment and financial performance. It represents a holistic model of the company to link strategic planning and operational planning with financial planning. By deploying a single model across enterprise and leveraging organisation’s information assets, corporate executives, business unit heads and planning managers use IBP to evaluate plans and activities based on true economic impact of each consideration.

Integrated Business Planning Transforms Planning Into a Decisive Competitive Advantage by:

Providing an integrated planning platform across marketing, operations and finance

Generating a holistic understanding of performance drivers

Quantifying financial impact and interdependencies across planning alternatives

Optimising strategic planning and resource allocation

Balancing S&OP for profitability

Quantifying financial risk

Increasing business flexibility

Applications Areas:

Product profitability

Customer profitability

Capital expenditures

Manufacturing operations

Supply chain

Business processes (human and information-based)

Business policy

Market demand curves

Competitive strategy

Why is Technology Important in IBP?

Data Management: Organisations have varied data sources for different perspectives – sales, customers, marketing, suppliers, manufacturing, logistics, and finance. Data management and integration capabilities are needed to ensure that data inputs are timely, complete, and are incorporated into the S&OP plan in an accurate manner.

Multi-dimensional Goals: There is need to look at data in different ways (by different departments) in terms of aggregation as well as units. IT solutions are important for creating multi-dimensional views of plan that also support what-if analysis.

Dynamic Business Processes: Faster and more frequent S&OP cycles are required to keep pace with shorter product life cycles, compressed order lead time requirements, and more dynamic demand. Technology enables automating these processes and thus increases efficiency in S&OP planning and risk management.

More Decision Parameters: Critical decision parameters in IBP – overall margin, product family level margins, budget (financial plan), inventory, supply capacity, demand accuracy, service level requirements, are multi-dimensional and involve attributes that may be different at different levels of aggregation. These require IT support to model, manage and monitor.

Integrated Business Process V/S Traditional S&OP

Traditional S&OP Integrated Business Planning Business Objective Supply/demand balancing Not simply about matching demand and meeting customer needs.

Considers several plan alternatives and chooses one that best represents the business drivers. Objective is revenue and profit Process Rigid and prescriptive Process is more rules and exception based Technology Weak and non-integrated Technology enables the processes through workflows Frequency Monthly or quarterly Still monthly in lot of cases but with ability to rapidly handle exception situations Focus Inward focused Collaborative and outward focused

To find out how WBS can assist your integrated business planning in your organisation simply contact us for an initial FREE no obligation consultation.