implementing integrated business planning

Integrated Business Planning

For integrating functional plans, deploying business strategy, and driving business management, what is integrated business planning (ibp).

Integrated Business Planning (IBP) is a common-sense process designed for effective decision-making and led by your leadership team. True business integration means senior management can plan and manage the entire organization over a 24-36 month horizon, aligning strategic and tactical plans each month, and allocating critical resources, people, equipment, inventory, materials, time, and money; to satisfy your customers in the most profitable way.

Integrated Business Planning represents the evolution of Sales and Operations Planning (S&OP) from the supply and demand balancing process developed in the early 1980s. Today it is a process that drives the alignment of all functions across an organization, models and creates readiness for alternate outcomes, drives deployment of strategy, and enhances collaboration across supply chains.

What is the difference between S&OP and IBP?

There are many differences between Sales & Operations Planning and Integrated Business Planning, but firstly it’s important to note that IBP is not a supply chain process ; it has a much broader reach. IBP is the process that connects your strategy and business plan to ensure both are delivered.

The purpose of IBP is not to drive a better forecast with which supply chain can plan. It is the process that brings focus to the deployment of your business strategy and provides a framework for effective decision-making to drive growth.

It's also much more than just a monthly meeting. IBP is a company framework to surface and solve problems and continually re-optimize plans as circumstances change. IBP enables businesses to create an aligned, cross-functional plan for the future, based upon key assumptions. These assumptions, documented and updated each month, are based on insights.

Read our white paper to learn more about what sets Integrated Business Planning apart from Sales & Operations Planning.

Looking for help with IBP software?

Oliver Wight IBP Powered by Board is a holistic solution combining Oliver Wight's industry-leading Class A and implementation change management processes with Board software. Fully align people, processes, and technology and embed IBP and its benefits for years to come.

This offering combines IBP technology and process in one package for rapid time to value. You will benefit from Oliver Wight consulting and education + Board Intelligent Planning Platform + specialist implementation services. 

Find out more.

How mature is your organization's true level of maturity in IBP?

Before embarking on any performance improvement program, it is imperative to identify your organization's true level of maturity. The Oliver Wight Maturity Model characterizes an organization as being in one of four key phases of maturity: Co-ordination, Business Process Control, Automation, or Integration. Assess your business maturity in Integrated Business Planning using our free online self-assessment tool .

Assess your business maturity

How you can benefit from Integrated Business Planning

Early identification of gaps in the business plan and strategy deployment, creating time to close them

An integrated view of performance and projection of your business over a 24-36 month horizon

Alignment of functional operating plans and financial projections with ‘one set of numbers’

Application of scenario planning and modelling to areas of your business where there may be uncertainty or impact

Increased responsiveness to uncertainties and unplanned events to minimize negative impacts and seize opportunities

Creation of transparency and clear accountability across the business/organization

Simplification of the budgeting or annual planning process

Integration of strategy deployment with operational plans

Increased employee engagement and efficiency

Growth in revenue

Reduced costs

Improved customer service

Reduced inventory

Visibility of planned product changes, future demand from sales and marketing, supply chain performance, planned supply chain capability and flexibility, plus bottom-up plans and the actions and decisions required to deliver ‘best for business' outcomes

You should consider Integrated Business Planning for your business if:

You are constantly in ‘fire-fighting’ mode

You have a misaligned management team

You are continually missing the financial plan

You are experiencing rapid growth and can no longer manage effectively using an informal process

Your budgeting process is ‘painful’

You are struggling to get on top of service issues

You cannot keep up with growth in demand

You have excessive inventory

You are experiencing excessive rework and cost

Departments or sites are working in silos

There is no ‘single source of truth’ or ‘single set of numbers’ to run the business

You feel like you never have time to look at the strategy

There is poor deployment and execution of the strategic plan

You have poor employee engagement

You feel like you are not getting a return on the effort put into your existing S&OP/IBP process

How we can help

A diagnostic assessment of your current S&OP or IBP process, including its effectiveness and identifying any performance issues

Transfer of our knowledge to your people so they can create and manage an effective IBP process

Change management – plan, monitor, and support the implementation of change and its impact on your people

Facilitate the design of an IBP process to best fit your organization and its needs

Scoping of an action plan to address issues and take advantage of the opportunities identified, including resourcing, timelines, and performance improvement expectations

Coach IBP process users as you introduce the new ways of working

Assess and validate that your IBP process has achieved a Class A level of effectiveness – firmly embedded as the ‘way you do things’ and delivering the benefits you wanted

Integrated Business Planning is a cutting edge process which creates cross-functional alignment and enables businesses to re-focus to meet the ever-changing environment. IBP generates readiness for alternative outcomes, enhances collaboration, and ultimately drives deployment of strategy in an uncertain world. The chosen process of some of the world’s most progressive and best-known organizations, IBP is a common-sense process that maximizes profit and enables leaders to manage risk with confidence.

Integrated business planning resources to help you improve.

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Integrated Business Planning – Introduction, Overview, and Current Best Practice

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What is Integrated Business Planning and What Are The Benefits?

If there is one thing any business analyst can forecast is this: sustained uncertainty. And organizations can’t do much to change this. What organizations can do though, is to prepare to deal with market variability by addressing the business challenges internal organizations may have: disconnected and lengthy planning processes, an insane amount of time collating data, siloed decision-making, lack of forecasting accuracy, poor sight into operational assumptions and what is driving margin. That’s what Integrated Business Planning is aiming for.

What is Integrated Business Planning (IBP)?

Integrated Business Planning aims to unify business strategy with planning, budgeting and forecasting activity for all business lines and functions – providing one version of the numbers. A trusted, common view of the numbers provides a robust baseline for agile decision-making and keeps all teams together, collectively trying to achieve the same corporate objectives while staying focused on specific KPIs. In other words, the different teams maintain their independence while working in unison to achieve corporate success by leveraging the same trusted and governed data.

The bottom line is that IBP is about aligning strategy intent, unifying planning processes and bringing the organization together.

IBP Process: How Does it Work

The Integrated Business Planning process is a framework to address the C-suite needs and help them implement the business strategy and manage uncertainty to improve decision-making. The secret sauce of IBP is a collaboration between the different teams under a single view of the numbers that must unequivocally be tied to financial performance, that’s how the C-suite gets value from it. Consequently, finance plays a central role within IBP.

IBP typically focuses on 24- 60 months horizons, as opposed to short term: that’s Integrated Tactical Planning or Sales and Operations Planning and Execution. The process must be fully integrated, so it should remove the departmental silos and it must adapt to the organizational construct of every business (it is not a one size fits all type of process).

Figure 1 outlines the five core elements of the IBP cycle with its responsibilities:

The most efficient way to foster this collaboration is by having a unified solution and data model that caters the needs of the various agents involved on each review.  Figure 2 shows how one solution gathering all the capabilities in the greyed area under a unified data model is the most efficient approach to IBP.

IBP Business Benefits

The benefits an organization can expect from an IBP implementation are diverse. In the big picture, IBP can certainly improve financial and business performance. Figure 3 outlines some of the most remarkable KPI improvements.

Want to learn how you can maximize the benefits of your IBP process and get your CEO onboard, read our blog on the 5 Considerations to Help Your CEO Trust the IBP Process .

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Integrated Business Planning: A Detailed Exploration of Strategy and Execution

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Integrated Business Planning Definition

Integrated business planning is a management process that synergizes sales, marketing, finance, operations, and logistics to drive an aligned operational plan and business strategy, balancing demand and supply while also considering financial objectives and the allocation of critical resources. It embraces short, medium, and long-term business planning and assists in decision-making, reducing risks, and increasing profitability.

Importance of Integrated Business Planning

The crucial role of integrated business planning.

Today’s businesses exist in a world that is, to say the least, complex and full of rapid changes. In these circumstances, integrated business planning plays a pivotal role in navigating through the turbulent times by bridging the gap between the company’s strategic ambitions and their operational constraints.

As a unifying framework, the process provides a link between the top-level strategic planning and day-to-day operational activities. It eliminates silos between departments providing a holistic, transparent and real-time view of the business. By mapping all operations to strategic goals, it ensures that all decisions and actions are pulling in the same direction toward the fulfillment of those goals.

Aligning Strategic, Operational, and Financial Planning

With integrated business planning, synchronization becomes achievable at an elevated level. It enables businesses to align their strategic objectives with operations and finances, thus ensuring a smooth flow of processes. When strategy, operations, and finance harmoniously work together, it eliminates any disconnects, resulting in effective and efficient decision-making.

From a strategic perspective, the approach aids in prioritizing goals and developing responsive and realistic plans to achieve them. On the operations front, it identifies bottlenecks, assesses risk, and ensures that all operations are in line with strategic objectives. Lastly, the integration with financial planning leads to accurate financial forecasts, effective cash management, and robust financial control.

To put it another way, this integrated view of business planning is akin to a well-conducted orchestra. Each section of the orchestra, be it strategic, operational, or financial, knows its role, its tasks, and how it contributes to the overall performance of the melody; which in this case, becomes the successful completion of strategic goals.

The Outcome: A Resilient Business Model

In the face of evolving markets and shifting customer demands, integrated business planning empowers businesses to quickly identify, adapt, and respond to changes efficiently. The approach supports timely and informed decision-making, improves communication and collaboration, and nurtures a proactive business culture focused on future growth.

The process also provides a robust system that facilitates scenario planning and risk mitigation. It promotes informed and rational decision-making, thus creating a resilient business model capable of withstanding market uncertainties and disruptions.

In summary, integrated business planning offers a comprehensive, more intelligent approach to business management—one that aligns strategy, operations, and finance towards a common goal while driving performance and sustainable growth.

Core Components of Integrated Business Planning

At the epicenter of integrated business planning is demand. Understanding current customer needs and predicting future ones is key to running a profitable operation. This involves market research, analysis of historical data and forecasting. By getting an accurate approximation of demand, businesses can take proactive measures to efficiently meet those needs.

Supply Management

It’s not just enough to understand the demand. A business must have a competent supply management system that can meet the anticipated demand. This is achieved by coordinating all elements of procurement, production, and logistics to effectively fulfill customer needs. A successful supply chain management strategy incorporates everything from sourcing raw materials, managing inventory, production planning, to eventual delivery.

Product Management

Product management is a very significant part of integrated business planning. It’s the process by which a business decides what products to offer and how to position them in the market. Product managers work cross-functionally with other teams like marketing, sales, and engineering, to ensure that the product aligns with company goals and customer requirements. They also analyze market trends, competitive landscape, and customer feedback to inform product features and enhancements.

Financial Planning

Lastly, financial planning provides the fiscal framework for integrated business planning. It involves budgeting, revenue projection, expense tracking, and monitoring financial performance against these predictions. A detailed financial plan enables a business to execute its strategies within available resources, capitalize on opportunities and respond timely to market changes. Financial planning is indispensable for a sustainable long-term business growth.

Each of these components works seamlessly with the others in integrated business planning. While demand, product, and supply chain management ensures that the business retains a competitive edge in the market, financial planning provides the necessary oversight to ensure the business remains profitable while doing so. This alignment across all the key functional areas is what makes integrated business planning so critical to the success of a business.

The Role of Integrated Business Planning in Corporate Decision Making

In a dynamic business environment, integrated business planning helps corporations quickly adapt and respond. It operates as a navigational tool, guiding decision-making processes at various levels of an organization, from operational to strategic.

Operational Decision Making

At the operational level, integrated business planning aids in managing immediate and short-term decisions. It provides a detailed view of the current business operations- from sales forecasts, customer demands, supply chain management to available resources.

For instance, consider a rise in demand for a product. An operational decision might involve assessing the production capacity and inventory levels, which integrated business planning can readily provide by unifying data from multiple business functions. This allows the organization to react swiftly and efficiently to unexpected changes.

Tactical Decision Making

Tactical decisions contributing towards achieving short-term goals also benefit from integrated business planning. It aids in providing a firm ground that aligns operational decisions with corporate strategy.

Key functions like marketing campaigns, collaborations, or prodigious investments often hinge on the insights captured through integrated business planning. It not only allows companies to seize up-to-the-minute market opportunities but also helps in mitigating potential risks.

Strategic Decision Making

At a strategic level – where decisions have long-term implications and contribute directly to the achievement of an organization’s mission – integrated business planning is instrumental. It provides organizations with forward-thinking views, predicting future scenarios, and laying out a roadmap to achieve the desired goals.

For instance, making decisions about entering new markets, launching new product lines, or obsoleting older ones are all powered by the insights from integrated business planning.

Thus, integrated business planning is central to decision-making processes, underpinning them with a clear, synchronized view of business functions. It enables corporations to respond effectively and swiftly to business environment changes, maintaining their competitive edge.

Integrated Business Planning and Risk Management

Integrated business planning (IBP) plays a crucial role in managing business risks. It enables organizations to align strategic, operational, and financial plans to achieve overall corporate objectives.

Assessing and Managing Risks with IBP

With IBP, an organization can continually assess potential risks and adjust its plans based on a comprehensive and timely understanding of possible implications. This process reduces the likelihood of sudden impact from unanticipated events and enhances the resilience of the business.

For instance, IBP can help in foreseeing economic downturns and prepare for them by diversifying income streams or increasing savings. Similarly, if a company anticipates a shortage of raw materials, it may use IBP to develop contingency plans such as seeking alternate supply sources, redesigning products, or adjusting manufacturing schedules.

Identifying Opportunities

On the flip side, integrated business planning also plays an essential role in identifying opportunities. This comprehensive approach can uncover potential synergies, efficiencies, and strategic initiatives that would otherwise go unnoticed. Leveraging integrated data, businesses can identify market trends early, allowing them to deploy new solutions or services ahead of their competitors.

Consider an organization that notices an increase in the use of sustainable materials via integrated data analysis. With IBP, the company can assess the possible financial and operational implications of shifting to eco-friendly materials, then devise strategies to capitalize on this trend.

Holistic View of Business Landscape

Furthermore, the holistic view provided by integrated business planning assists businesses with identifying both threats and opportunities. By providing viably comprehensive, cross-functional views of the business landscape, IBP allows companies to anticipate changes, react effectively, and seize the opportunities these changes bring.

In conclusion, integrated business planning’s role in risk management is immense. It promotes resilience by enabling organizations to anticipate potential risks and build strategies to navigate them. It also encourages innovation by highlighting emerging opportunities, leading to improved competitiveness and sustainability.

Tailoring Integrated Business Planning to Different Business Models

Applying integrated business planning (ibp) to service-based businesses.

The successful application of Integrated Business Planning (IBP) in service-based businesses can prove to be unique due to the nature of service delivery and customer expectations. Unlike in a product-oriented business where the primary goal is to manage the supply chain, service-based businesses encounter market variability and require a flexible planning process.

IBP helps these businesses by providing a platform to align their operational plans with strategic goals. For instance, the nature of the service can dictate the planning horizon and the frequency of revising plans. A healthcare provider may need a more immediate planning horizon compared to a consultancy firm due to the unpredictable nature of medical emergencies. Hence, IBP can be tailored to accommodate these different planning horizons.

Adapting IBP for Product-Oriented Businesses

Product-oriented businesses, on the other hand, often have tangible inventory and a visibly structured supply chain. Here, IBP comes in handy to integrate various components like sales, operations, and finance to ensure the business stays on track to achieve its strategic goals.

By synchronizing all critical business units, the company can ensure demand forecast accuracy, reduce stockouts and overstocks, and optimize cash flow. For instance, in a manufacturing business, the use of IBP can be pivotal in decisions ranging from raw material procurement to production planning to order fulfillment.

Implementing IBP in Hybrid Business Models

A hybrid business model, a mix of service and product-oriented business, calls for even more flexible application of IBP. Hybrid businesses need to balance the complexities of both models, and this can be achieved by integrating decisions about service delivery and product supply.

The outcome is a more harmonized strategic plan that accommodatively factors in both the intangible and tangible aspects of the business. For instance, a software company that offers both software products (product-oriented) and software services (service-oriented) may use IBP to synchronize the timeline for product development and service delivery.

In conclusion, while the fundamental elements of IBP remain the same, its implementation can and should be tailored to the unique needs of specific business models. The flexibility of IBP lies in its ability to adapt and accommodate the diverse patterns of businesses, ensuring alignment of strategic goals with operational plans. This is what makes IBP not just an effective planning tool, but an innovative business methodology.

The Relationship between Integrated Business Planning and Corporate Social Responsibility

In the application of integrated business planning, it’s important to consider its impact on a corporation’s social responsibility (CSR) practices. Integrated business planning has direct implications, as it can form a strategic platform for organizations to proactively manage their social and environmental responsibilities, in addition to driving financial performance.

When considering a business’s social and environmental responsibilities, it’s clear that these elements can significantly influence planning processes. This is because businesses, especially those operating in sensitive sectors such as mining or manufacturing, must account for the potential social and environmental impacts of their operations.

Effect on Planning Process

Understanding this, the planning process under an integrated business planning model needs to not only focus on traditional economic factors, but integrate CSR into the heart of their business strategies in a structured and systematic way. This might involve predicting potential social and environmental risks and planning appropriate mitigation strategies, or identifying socio-environmental initiatives and integrating them into the business’s operating model.

Asset Utilization and ESG Compliance

Moreover, integrated business planning can allow businesses to better utilize their assets in the service of both financial objectives and CSR. For instance, a manufacturing facility might plan to use more energy-efficient technologies, demonstrating commitment to environmental sustainability, while also potentially reducing operational cost.

Furthermore, a solid integrated business planning can enhance a company’s efforts in Environmental, Social, and Governance (ESG) compliance. It allows the business to consistently align its operational activities and financial planning with its CSR policies and governance standards. This, in return, may improve the public image, customer trust, and overall market reputation of the company.

Aligning Business Goals with Societal Values

Ultimately, a key aim of integrating CSR into the business planning process is to ensure that an organization’s business goals are well-aligned with societal values and environmental sustainability. Doing so not only helps businesses to fulfill their moral and civic duties, but is also increasingly recognized as a powerful driver of long-term financial performance.

Software Tools for Integrated Business Planning

In order to successfully implement integrated business planning (IBP), businesses need to make use of a variety of software tools. These tools not only make the complex process more manageable, but they also increase accuracy, improve collaborative efforts and provide meaningful insights for better decision-making.

Popular Software Tools

One popular tool is SAP Integrated Business Planning (SAP IBP) . This tool is lauded for its real-time supply chain management features. SAP IBP offers features for demand planning, supply and inventory planning, sales and operations planning, and response and supply control.

Another widely adopted software is Anaplan . Anaplan’s platform helps businesses model and visualize their data, and is known for its capability to handle extremely large data sets, making it ideal for large organizations.

Oracle Demand Management Cloud is also worth mentioning. It provides predictive analytics to understand and manage demand, and it integrates well with other Oracle applications, making it an attractive choice for businesses already using the Oracle ecosystem.

Kinaxis RapidResponse stands out for its scenario planning features, allowing businesses to simulate and compare various situations and their outcomes.

Role of Technology in IBP

Technology plays a pivotal role in IBP, simplifying and enhancing the process. With the vast amount of data businesses deal with today, manually managing such processes would be time-consuming and prone to human errors. Software tools automate most of these tasks, ensuring accuracy and efficiency.

Moreover, these tools often provide data visualization features, converting complex data into easy-to-understand charts and graphs. This not only makes data more accessible to all stakeholders, but also aids in quicker decision-making.

One significant advantage of using these tools is the ability to collaborate in real-time. Multiple users can work together on the same data sets, breaking down silos within the organization. With everyone on the same page, the alignment between different business functions improves, boosts the overall business performance.

Lastly, with features like predictive analytics and scenario planning, businesses can better anticipate future scenarios and prepare accordingly, reducing the risk associated with unforeseen changes in the market or supply chain.

Thus, with the help of software tools, integrated business planning becomes a more streamlined, accurate, and collaborative process.

Implementing Integrated Business Planning

Essential considerations for successful implementation.

To ensure a successful transition to using integrated business planning, several key aspects must be considered.

Employee Training

A central aspect of this change-over is the training of employees. Your employees need to understand the principles of integrated business planning and how they can apply these principles in their day-to-day activities. This training could be delivered through workshops, seminars, or e-courses, depending on what’s most effective for your employees.

Ongoing mentorship and support are also beneficial, helping employees adjust to the new system over time. By providing continuous learning opportunities, you keep your employees engaged and motivated, thus enhancing the adoption of integrated business planning.

Technological Requirements

The transition to integrated business planning is not only about changing mindset, but also about updating your technology stack, as this approach often relies on advanced software solutions. The exact technology needed may vary depending on the scale of your business and the nature of your operations, but a comprehensive business planning software suite is usually a baseline requirement.

Additionally, you would need to evaluate your current IT infrastructure to check if it can support the new systems. It might be necessary to upgrade certain components to ensure seamless operation. Remember, your new software should be user-friendly to promote ease of use among your employees.

Embracing Cultural Change

Implementing integrated business planning can bring about a significant shift in your company culture. As an approach that emphasizes collaboration and transparency, it requires a shift away from organizational silos. Employees at all levels need to get used to sharing information and making collective decisions.

Promoting this cultural shift can be challenging. Clear, effective communication will be crucial. Explain the advantages of the new system, engage employees in the planning process, and make sure everyone understands their responsibilities. Celebrating small victories can also help to promote positive feelings towards the change.

By paying attention to these critical aspects – employee training, technology, and culture change – you can lay the foundation for a smooth transition to integrated business planning.

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Implementing Integrated Business Planning: A Guide Exemplified With Process Context and SAP IBP Use Cases (Management for Professionals) Softcover reprint of the original 1st ed. 2019 Edition

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• ISBN-10 3030079325
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• Edition Softcover reprint of the original 1st ed. 2019
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From the back cover, about the author.

Robert Kepczynski has more than 20 years experience in supply chain management and technology. Robert does assess, design and implement people capability models, process design and delivers efficient technology solutions. He is specialized in supply chain planning processes and technologies. Robert took business roles in plant supply / production planning and sequencing, inventory and materials management, warehouse and duty operations, costing and budgeting, in market IBP and S&OP, distribution planning, and in regional & global S&OP, sales forecasting, demand planning and demand management, and process ownership. Robert led x-functional transformation programs delivering functional optimization and differentiation. He contributed to the worldwide 2nd largest SAP IBP implementation, which has started in 2013 and proved that Robert has heart, head and hand for IBP.

Ganesh Sankaran is a Supply Chain Management technology practitioner. Ganesh helps clients solve business problems and generate value from their supply chain processes, particularly in the planning domain. Ganesh possesses a skillset that combines deep theoretical insights in SCM and rich implementation experience in SAP solutions further enriched by around seven years of prior software development experience.

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Integrated planning: The key to agile enterprise performance management

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Table of contents

What is integrated planning, change as a given: the truth about plans, planning across the organization, the ultimate integrated planning solution.

• Need for real-time insights
• Integrated planning
• Agile and ready organizations
• Integrated planning drives better results

Integration is key to streamlined planning, budgeting, and forecasting. In order to adapt to today's quickly changing business conditions, you need an enterprise performance management solution that creates a single source of truth and delivers speed and agility to your planning process.

Did you know that 33 percent of critical information is delivered late?

The delay of critical information can cause a ripple effect that drives poor decision making and poor results. Today’s business simply cannot afford this type of cost in our customer-centric environment, where data is one of our most valuable assets. To stay ahead of the competition, businesses rely on a solution that can deliver acceleration, agility, and collaboration in every part of the organization.

Integrated planning ensures all parts of the organization are connected and planning is streamlined.

A must in the culture of “now.”

In virtually all industries, work has become more interactive and collaborative. More sharing is required, and more data is available than ever before. Success means integrating information across strategic and operational perspectives, as well as different functional and external sources.

Integrated planning mirrors the modern way we do business — it elevates the critical value of collaboration and cuts through data silos, driving more access to information and faster insights. Leaders use highly collaborative approaches to plan, budget, and forecast. Business planning requires accurate and complete data and buy-in across the entire organization, both from the top down and the bottom up. It sounds simple, but organizational silos are some of the biggest obstacles to accomplishing good work because they hinder critical decisions that strategically steer the business. And at the modern enterprise, silos are everywhere.

Integrated planning starts with a sophisticated planning platform that everyone in the organization can use, creating one source of truth. Data from diverse data sources such as ERPs, CRMs, and HRMs is unified, so users can access the information they need when they need it. Integrated planning helps ensure that plans, budgets, and forecasts are created with a holistic approach. Trends are easier to spot and quickly act on with more accurate and reliable plans. According to analysts at the Aberdeen Group , those organizations that champion data accessibility and collaboration between stakeholders promote organizational accountability and decrease time-to-decisions while increasing revenue. 1

The fact of the matter is that without effective communication, coordination, and collaboration between stakeholders, there is no way to improve organizational performance. 1

Bringing together people, data, and technology leaves organizations well-poised for optimal performance. Most importantly, integrated planning enables employees to be agile in responding to changing circumstances and able make the best decisions possible — all at the speed of modern business.

According to an Aberdeen study, 1 leaders who adopt enterprise performance management tools show a keen understanding of the importance of collaboration. They recognize that to make data driven decisions, they need to make all information accessible by integrating data and breaking down silos. Figure 1 shows steps taken by leaders to democratize data and drive more accurate forecasts.

Leaders put a high value on data integration and accessibility. They see the value of providing real-time data to decision makers and taking the guesswork out of forecasting. These strategies create comprehensive, actionable visibility into overall company performance and drive better results.

Gartner Predicts by 2020, at least 25 percent of large organizations will increase planning accuracy by integrating key operational planning processes with financial planning and analysis. 2

Do you have an integrated view of your data?

I do not feel confident in where to find comprehensive data, even for just my department

I have a good handle on my own departmental data (but only mine)

I have access to my data and that of other departments that impact my planning

IBM Planning Analytics helps Deutsche Bahn unite its global enterprise

Deutsche Bahn AG is a German railway company, and one of the largest IBM Planning Analytics customers with over 6,000 users worldwide. Deutsche Bahn uses IBM Planning Analytics to unite their wide-ranging operations across the globe, ensuring that the most accurate data is being used to create critical plans and forecasts that drive their business forward.

The truth about plans is that they always change. The goal of a dynamic, integrated planning approach is not to create a perfect, fixed plan. It’s to use all the resources available to create the most accurate, flexible and transparent plan possible, using a solution that does more than just plan — it analyzes data, reveals trends, and allows for real-time iteration.

Better, quicker access to data means faster and more informed decisions, laying the foundation for an organization to be agile and ready to pivot when changing business conditions demand.

If you’re reading this and thinking, “great, the finance team integrates all our plans, so we are off the hook,” think again. While we’d like to think that finance is the well-informed master of plans, miraculously weaving them together in perfect harmony and balance, that’s not always the case. In fact, it rarely is. Many, many finance teams rely on the manual collection of data into spreadsheets, which are often disconnected. Remember that much of an organization’s critical planning starts outside of finance and never gets communicated back up the chain or across the organization. There are simply too many top-down and bottom-up communication problems. Spreadsheets only complicate smooth communications. When a finance person is collecting and analyzing budget spreadsheets from across the organization, there is high risk for error in the process of combining and editing, causing confusion at the highest levels. Contradictory data can inhibit a clear picture of what is actually going on and identifying business drivers or detractors. Spreadsheets have proven over and over to be a highly imperfect yet highly common business practice.

With real-time access to data, companies take the guesswork out of planning, decreasing time involved in forecasting and increasing forecast accuracy. 3

Bye bye, silos. Hello, cross-functional planning.

A centralized, automated solution for performance data and planning allows coordination between different parts of the business and enables more streamlined, accurate plans. Leadership needs to understand what is truly driving the business — what causes increases and decreases in revenue or demand. At every level, access to a full range of data is critical to understanding how change (both internal and external) impacts the business. Though planning often starts with finance, other areas of the business can benefit from a dynamic planning solution as well. Let’s dive into a few use cases.

Supply chain planning

The term “operations” covers an enormous range of business activities. But one that’s almost universal is supply chain management. Supply chain planners are under constant pressure to reduce costs, increase efficiency and improve margins. Unfortunately, too many of them lack visibility into data and are misaligned with other teams. One centralized tool can help connect operational tactics with financial plans to allocate resources more effectively in response to market opportunities or competitive threats. This helps planners avoid mismatched data across multiple spreadsheets and enables them to pivot in the case of supply chain disruptions.

“ Our managers all have quick, easy access to the latest operational data via detailed reports that help them make better-informed decisions to improve the efficiency of the entire supply chain. ”

- Homarjun Agrahari, Director, Advanced Analytics, FleetPride

Learn more about supply chain planning

Infographic Webinar Learn more

Workforce planning

A company is only as good its people. That’s why it’s so important to hire and retain the right talent. Alignment between HR, finance and operations is crucial to ensure that the right people are in the right roles at the right time in order to meet organizational demands. This is rarely a simple task and too often it involves manual spreadsheet-based processes. Ensuring that departmental staffing targets are in sync with broader organizational objectives requires high levels of planning integration.

“ Our business is based on people. IBM Analytics is helping us manage that critical asset much more efficiently and effectively than ever before. ”

- Nadia Bertoncini, Coordinator of Governance, Projects and HR Analytics for Latin America, Natura Cosméticos

Learn more about workforce planning

Infographic Aberdeen report Learn more

Sales planning

Misalignment between finance, marketing and sales could lead to investment in the wrong initiatives, missed opportunities and inaccurate revenue forecasts that can severely hinder sales growth. And in a fast-moving market, manual processes and siloed systems are detrimental to agility. Decisions that are based on outdated information can lead to misguided sales strategies and thus lost sales and lost revenue. It’s critical to unite data under one roof for one single view to boost sales and effectively manage sales people.

“ The sheer level of detail that IBM Planning Analytics provides is very impressive … We can calculate our sales and gross margins for each SKU in IBM Planning Analytics and generate insightful reports at the click of a button. As a result, senior managers can rapidly access the comprehensive information they need to make effective strategic decisions. ”

- Vince Mertens, Group Accounting and Consolidation Manager, Continental Foods

Learn more about sales planning

Marketing planning

Constantly changing customer preferences and rising customer expectations require marketers to interpret high volumes of data and respond appropriately. But siloed data systems give only a partial picture and hinder smart decision-making. In addition, marketing teams can be fragmented and often disconnected from sales. Siloed planning causes misalignment with overall marketing goals, driving misallocated spend on the wrong elements of the marketing mix. Manual, siloed processes reduce visibility into how marketing activities affect one another, how marketing and sales touches move a lead through the funnel and how marketing helps achieve overall financial and business goals.

“ We first needed a better handle on our sales data. With so many lines of business, channels, and franchisees, collecting and consolidating this information was something that we knew we could do better. ”

- Donald Neumann, Demand Manager, Grupo Boticário

Learn more about marketing planning

Ventana report Learn more Infographic

IT planning

With IT, you need a business case for every dollar spent. But balancing the IT needs of an entire organization with digital transformation objectives and constant technology innovation is no simple task, and often requires additional resources. That’s why it’s so important leverage a planning solution that keeps IT focused on the projects that matter, automates planning tasks, gives a clear view into resources available and helps measure ROI. It’s also critical to coordinate with both finance and human resources to ensure the right resources are provided for IT initiatives and projects.

“ A few years ago, my team probably spent around half their time just keeping everything running — now it’s around 10 percent. With the move to IBM Analytics in the IBM Cloud, we have 40 percent more time to focus on working with the business to add value. Instead of asking ‘how do I make it work?’ we ask ourselves ‘how do I make it better?’ It’s a quantum shift in mindset. ”

- Vimal Dev, Vice President – IT, Global Enterprise Applications Leader, Genpact

Learn more about IT planning

Learn more IBV report

Operations, sales, marketing, human resources and other departments and disciplines all have a need for fast, flexible planning and analysis. And all of them can use the same tools to provide insight and manage performance. When people in one part of the organization see how their decisions affect other parts of the organization, all of the activities will be better coordinated and drive better results. In fact, according to Aberdeen, leading organizations are those who align planning across departments at double the rate of laggards in areas like sales, marketing and finance.

Become a leader

With IBM Planning Analytics , you can break down silos and generate an integrated view of your departmental or organizational performance. The solution enables you to create more accurate forecasts, identify potential performance gaps before they occur and make resource allocation decisions quickly and intelligently. Using multidimensional modeling and scenario analysis, IBM Planning Analytics lets you drill down into your data to examine the ripple effects of alternative courses of action and understand how your decision will affect related areas of the organization and ultimately impact the bottom line.

Using what-if scenario analysis to make smarter decisions

With IBM Planning Analytics, you can build multidimensional models and perform “what-if” analysis to explore scenarios or test business assumptions. Creating and maintaining sophisticated models with advanced sandboxing capabilities is simple. Easily test business assumptions and model scenarios to immediately see the impact of alternative courses of action on before deciding to implement changes.

IBM Planning Analytics offers all areas of your business — finance, operations, HR, sales, marketing, operations, IT and more — the ability to solve problems today and respond to new challenges with agility tomorrow.

Click on any quadrant for more information.

Headcount and staffing planning

Salary and compensation planning

Successions planning

Corporate planning and, budgeting and forecasting

Strategy planning

Operational planning

Capital planning

Expense planning

Profitability analysis

Demand planning

Sales and operations planning

IT project planning

IT budgeting

IT portfolio management

Sales territory planning and quota planning

Sales forecasting

Sales capacity planning

Resource allocation

Marketing revenue planning and forecasting

Campaign optimization

Dive deeper into the solution

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Shortfall: CFOs worry that their teams aren’t ready to weather the disruption

Here are four issues that are holding back many finance organizations and possible solutions.

Integrated Business Planning

Succession planning

Corporate planning, budgeting and forecasting

Strategic planning

Captial planning

Your Complete Starter Guide to Understanding Integrated Business Planning

Integrated business planning gives you a 360 degree view of the business by connecting all your business applications. Here's how to get started.

Create flexible and predictable sales forecasts

Integrated Business Planning (IBP) has emerged as the hallmark of businesses undertaking concentrated digital transformation efforts.

While business planning has been a standard part of every organizational strategy, it has been a disjointed process until recently. Different departments ended up formulating their own strategies which impeded the organization's growth potential. Without a cohesive planning process in place, companies were unable to get a 360° look at the business and were unable to plan for the future.

Realizing the bottlenecks created by disjointed business planning, companies are now migrating to IBP as their default strategy.

What is Integrated Business Planning?

Integrated Business Planning (IBP) can be described as a process that offers management a 360° view of organizational functions like sales, marketing, finance, accounting, and others. These insights enable decision makers to prepare a comprehensive strategy to carry the business towards a promising future marked by enhanced growth potential.

Integrated Business Planning (IBP) has been a buzzword in the corporate sector for quite a few years, but its importance has increased exponentially in the last decade. IBP can be considered as a refined mashup of financial planning, operational best practices, and supply chain optimization to not only mitigate the risks but also deliver savings, responsiveness, and speed for the company and improve customer experience .

What is an Integrated Business Strategy?

Integrated Business Strategy (IBS) is a set of processes that companies can employ to bolster their efficiency and competitiveness in the market through expansion in different avenues.

These areas could include logistics, distribution, or competition. Businesses can use the IBS to enhance their sway in the distribution network to forge ahead of the competition and have a strong market presence. When compared, IBP is more focused on creating a cohesive business strategy that is in harmony with organizational objectives, while IBS is more about executing the IBP to achieve the desired goals.

What’s the difference between Sales & Operations Planning (S&OP) vs. Integrated Business Planning (IBP)?

There is a constant debate amongst experts if there is any difference between IBP and S&OP. While some argue that these strategies are complementary, there is a slight difference between these two integral tactics. 

S&OP is described as a cross-functional planning process undertaken to maintain the balance between supply and demand through the communication of changes in market demand to management. Finance, production, and supply chain departments utilize this data to optimize their production planning and purchasing decisions. S&OP empowers the organization with shorter lead times, improved management control, better customer service, and superior supply chain management. 

In comparison, it is evident that IBP is an extension of S&OP. Where S&OP is more inward-looking, IBP attempts to strike a balance between internal and external factors. After an organization has achieved a higher maturity level in S&OP, it must embark on the journey towards incorporating IBP as a standard business process. 

What are the key benefits of integrated business planning?

In the modern business environment, management must ensure alignment across cross-functional groups to maintain a competitive edge. IBP helps an entity overcome challenges posed by disjointed business planning to augment the decision-making processes. Some of the noteworthy benefits of IBP are:

• Accountability : Departmental teams are aware of the impact of their actions on other departments and the entire organization. Managers can fix individual responsibilities of employees to determine employee accountability.
• Transparency : IBP offers a consolidated view of data that enables departments to undertake scenario planning for different possible situations in sync with other departments. Such transparency in operations bodes well for the company's future.
• Alignment: With IBP, departments can understand the overall organizational objectives and then align their operations with syncing with those objectives. 
• Optimization : Management can ensure optimal resource utilization by addressing common bottlenecks that impede the operations of multiple departments. 

What is the purpose of integrated business planning?

IBP is a process designed to enhance the efficiency of the decision-making process for the entire organization. It enables management to lay down a detailed plan for managing the enterprise with a long-term horizon. Some of the key aspects that IBP addresses are allocating crucial resources, supply chain management, personnel requirement, financial analyses, and time management to ensure a balance between profitability and customer satisfaction.

IBP is the next step in the evolution of S&OP which in itself originated in the 1980s from supply and demand balancing processes. IBP ensures alignment of all departmental functions to prepare the entity for possible scenarios through accurate strategy deployment and better cooperation between key stakeholders.

Why do you need integrated business planning?

Whether you are a start-up looking to establish a strong presence in the market or an established enterprise interested in consolidating your market position, IBP must be an integral part of your strategy. Companies need IBP to devise a set of concrete actions to achieve different objectives. 

• Quality of inputs, outputs, and processes : Companies can maintain a uniform demand and supply plan that is in sync with the financial goals by attending meetings attended by cross-functional decision makers.
• Organizational capabilities : IBP promotes cross-functional collaboration across multiple layers of the organization to encourage functional excellence and problem-solving.
• Accountability and Performance : IBP helps design incentives to encourage transparency and accountability of performance. Shared metrics made available promote collaboration between key stakeholders. 
• Data systems : IBP promotes integrating data systems across departments to deliver a single point data source for all requirements. Automated data flows and system detection promote real-time decision-making. 
• Process design : IBP helps bridge the gaps left by short-term and long-term planning by enabling flexible strategies for addressing issues arising between these two time horizons. It also promotes strategy via management-level operational planning and target setting. 

How do you implement integrated business planning for your company?

Many companies struggle with implementing IBP as crucial responsibilities and metrics are not aligned across functions. This might pose difficulties with steering the operations collaboratively. Thus, it is important to clearly understand implementing IBP for your company. 

Integrations

To save crucial time and resources for different departments, it is important to select an IBP platform that seamlessly integrates with your existing tech stack. This will help eliminate data transfer errors and reduce data consolidation time, as well as maintain critical data security standards. Therefore, the first and foremost requirement for implementing IBP is to ensure seamless integration of the IBP software with your tech infrastructure, including ERP software, CRM software, Billing Systems, Data Warehouses, and more. 

Consolidating data sources into a single source of information 

Duplicate and inconsistent data sources pose challenges for an organization at multiple levels, leading to a waste of precious resources and impacting the bottom line. It is, therefore, important to have a single source of information that can act as a reference point for multiple departments. After integrating the IBP software with your tech stack, your next focus should be ensuring accurate data collection and aggregation in real time. This approach would provide a single source of truth for all the departments, eliminating errors due to omission or duplication.

Building forecasting models

Forecasting in IBP is used for demand sensing in the short, medium, and long term. To create a forecast model with your IBP software, you must define the algorithms and key figures related to outputs and inputs. A forecast model features three steps, i.e., pre-processing, forecasting, and post-processing. But a forecast model only works as a container of functionality, and it is you who must define its aggregation level and timing of running.

Financial forecasting methods

There are different financial forecasting methods that you can opt for per specific requirements according to different situations.

• Straight Line Forecasting : - This method is used to get a simple view of continued growth at a consistent speed to derive predictions for guiding financial and budget goals.
• Moving Average Forecasting : - This method calculates average performance for different metrics in a specified time frame. Companies use this method for the identification of underlying patterns for varied financial metrics.
• Simple Linear Regression Forecasting : - This method helps create a trend line based on the relationship between an independent and dependent financial variable. 
• Multiple Linear Regression Forecasting : This method uses two or more financial variables to make a projection. This forecasting model helps understand the relationship between different financial parameters and possible outcomes.

Scenario planning

Use your IBP platform to eliminate being caught off guard while executing your strategies. You can run multiple “what-if” scenarios within minutes to analyze the aspects affecting your business. You can create new scenarios using existing scenarios and compare different scenarios per your requirements. Representations like line charts, bar diagrams, tables, and other visualizations can be used for easy understanding of data for informed scenario planning. This allows you to improve the accuracy of predictions based on a single source of truth.

Scheduled imports

With the option of scheduling data imports built-in, IBP platforms are taking the hassle out of data collection and consolidation. With the scheduling option, you can define the import requirements and get all the data presented to you in a consolidated manner. With access to real-time data, you can ensure higher data integrity and accuracy, as well as data access autonomy. You circumvent investing heavily in setting up IT infrastructure, as cloud-based IBP software solutions can operate seamlessly on your existing infrastructure.

Analytics and data visualizations

Why stick to cells, rows, and columns for data analysis when you can access stunning data visualization solutions with your IBP software? Visual analytics helps draw meaningful insights from data by offering multiple ways to look at the same dataset. IBP platforms allow you to clean and enrich your data in seconds, allowing you to spend more time on data analysis and exploration rather than on manual data collection and consolidation.

Building beautiful presentations 

The true value of data analysis lies in the decisions it enables leaders to take. Storytelling, by incorporating the data and visualizations in a beautiful presentation, is essential to reaping the benefits of an integrated planning and analytics platform. You can use your IBP platform to import and export your data from sources including Google Sheets and create impressive presentations that drive positive impact.

Measuring ROI and impact on the business

Always ensure the measurement of return on investment (ROI) with key metrics depending on the use case. For example, your Finance team might have spent several days on data preparation before achieving actual insights from financial reporting. An integrated business platform has the potential to reduce this data prep time by 80% — metrics like this can be a great way to measure your team’s efficiency post implementing an IBP.

Integrated business planning by the department

The best part of an integrated business planning platform is its ability to support a wide array of business use cases - Sales, HR, Marketing, Finance, RevOps, CX, and more:

Finance and FP&A teams 

IBP platforms empower finance teams to build, maintain, and visualize data in real-time to deliver informed forecasts. Finance teams can save considerable time and resources as they can clean and enrich data in seconds and run models in hours instead of days with up to 20x fewer formulas than Excel. 

Revenue and Sales teams 

IBP platforms enable revenue and sales teams to unlock revenue growth potential through flexible financial modeling options. Therefore, teams can spend more time on strategy by reducing planning cycles for non-productive tasks. 

Executives 

Management teams and key executives are empowered to deliver well-rounded business results as the IBP platforms offer a single data source for all stakeholders. With a 360° view of the business, informed decision-making becomes the new standard practice.

Choosing the best business planning software 

To avail the complete benefits of IBP, selecting the best business planning software is essential. When compared based on power, flexibility, and design, Pigment emerges as the clear leader and is trusted by industry leaders across domains.

Pigment is one of the most feature-rich and user-friendly business planning softwares that offers you a one-stop solution for all your planning requirements. 

Pigment allows your teams to be more efficient as they gain single-point access to enriched data and can spend more time on data analysis to draw meaningful insights.

You can quickly create impressive models with real-time previews to bring all the decision makers at speed quickly. You create a seamlessly shared understanding of numbers across multiple departments, breaking down the silos affecting operational efficiency.

Pigment removes the element of surprise from all your decisions as you can forecast and run multiple scenarios to identify suitable opportunities and risks for your business.

Book a demo today and experience the unparalleled power of Pigment for yourself.

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Integrated Business Planning

How to Integrate Planning Processes, Organizational Structures and Capabilities, and Leverage SAP IBP Technology

• © 2018
• Robert Kepczynski 0 ,
• Raghav Jandhyala 1 ,
• Ganesh Sankaran 2 ,
• Alecsandra Dimofte 3

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Walldorf, germany, sap switzerland, regensdorf, switzerland.

• Describes the Integrated Business Planning from the perspective of business and technology practitioners
• Covers in one book people, process and technology integration as key to success
• Considers operational, tactical and long term process implications

Part of the book series: Management for Professionals (MANAGPROF)

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Table of contents (9 chapters)

Front matter, recent past disconnected planning.

• Robert Kepczynski, Raghav Jandhyala, Ganesh Sankaran, Alecsandra Dimofte

Why Move to Integrated Business Planning

What makes integrated business planning, how to run ibp: use cases, how to manage organization and capability change, how to enable change with sap ibp technology, how to measure transformation success, how to build transformation path, “quo vadis” integrated business planning.

• sales and operations planning
• business transformation
• demand planning
• demand management
• finance in sales and operations planning
• organizational structures
• capabilities

About this book

Authors and affiliations.

Robert Kepczynski

Raghav Jandhyala

Ganesh Sankaran

Alecsandra Dimofte

About the authors

Robert Kepczynski has more than 20 years’ experience in supply chain management and technology. Robert does assess, design and implement people capability models, process design and delivers efficient technology solutions. He is specialized in supply chain planning processes and technologies. Robert took business roles in plant supply / production planning and sequencing, inventory and materials management, warehouse and duty operations, costing and budgeting, in market IBP and S&OP, distribution planning, and in regional & global S&OP, forecasting, demand planning and demand management, and process ownership. Robert led x-functional transformation programs delivering functional optimization and differentiation. His production plant, market and global process experiences was valued in the 2nd worldwide SAP IBP implementation, which has started in 2013. This project proved that Robert has heart, head and hand for IBP.

Raghav Jandhyala is a Senior Director of ProductManagement at SAP for SAP IBP responsible for sales and operations planning and unified planning processes and best practices in IBP. Raghav has over 16 years of experience in different fields like Supply Chain Management, Retail and Banking along with strong technical background in development and adoption of business applications. Raghav held various roles in his career as business consultant, development architect, solutions manager and product manager. Raghav is responsible for developing the roadmap for S&OP solution and works with multiple IBP Customers for new innovations and as a trusted advisor for their global rollouts.

Ganesh Sankaran is a Supply Chain Management technology practitioner. Ganesh helps clients solve business problems and generate value from their supply chain processes, particularly in the planning domain. Ganesh possesses a skillset that combines deep theoretical insights in SCM and rich implementation experience in SAP solutions further enriched by around seven years of prior software development experience.

Alecsandra Dimofte is working for SAP where she started as a supply chain management consultant. Alecsandra was involved in several IBP / S&OP implementation projects which allowed her to play different roles, from integration consultant to functional design lead. Alecsandra contributed to the development of the S&OP practice within her delivery unit and to the growth of the IBP online community by active participation in the space dedicated to IBP.

Bibliographic Information

Book Title : Integrated Business Planning

Book Subtitle : How to Integrate Planning Processes, Organizational Structures and Capabilities, and Leverage SAP IBP Technology

Authors : Robert Kepczynski, Raghav Jandhyala, Ganesh Sankaran, Alecsandra Dimofte

Series Title : Management for Professionals

DOI : https://doi.org/10.1007/978-3-319-75665-3

Publisher : Springer Cham

eBook Packages : Business and Management , Business and Management (R0)

Copyright Information : Springer International Publishing AG, part of Springer Nature 2018

Hardcover ISBN : 978-3-319-75664-6 Published: 12 June 2018

Softcover ISBN : 978-3-030-09292-4 Published: 11 February 2019

eBook ISBN : 978-3-319-75665-3 Published: 31 May 2018

Series ISSN : 2192-8096

Series E-ISSN : 2192-810X

Edition Number : 1

Number of Pages : XIII, 265

Number of Illustrations : 237 b/w illustrations

Topics : Business Process Management , Information Systems Applications (incl. Internet) , Sales/Distribution , Supply Chain Management , Business Information Systems

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Drive your Business with Integrated Business Planning

Integrated Business Planning is the next step of business planning after implementing S&OP, which helps integrate all the different departments in the planning process. This helps in aligning every department and employee of the company to work towards attaining a single goal. Home > Insight > Drive your Business with Integrated Business Planning

The business planning process is essential to running a successful business. Earlier, the business planning strategies across the supply chain were disjointed, as disparate spreadsheets and standalone business intelligence solutions provided limited knowledge, due to which companies lacked unification across the entire organization. Due to a lack of interdepartmental synchronization between the planning of the activities that impact the financial bottom line, silos were created, leading to more resource utilization and less productivity.

The traditional business planning process lacks a collaborative approach, and hence there was no accountability for overall results; every division focused on their activities rather than considering a part of one business team. Integrated business planning was introduced to overcome the problems of traditional business planning. The organization uses that to create an agreed dependable market plan to which every department has contributed.

Table of Contents

• Similarities between IBP and S&OP
• IBP vs S&OP
• Users of Integrated Business Planning
• Working Mechanism of the IBP Process
• IBP Challenges
• Significance of Integrated Business Planning
• Seeking Assistance with IBP Software

What is Integrated Business Planning (IBP)?

Integrated Business Planning (IBP) is the business planning process that uses financial and operational data from across the organization. In other words, IBP is an amalgamation of supply chain management, financial planning, and operational best practices. One of the primary benefits of integrated business planning is optimized output by linking strategic plans with sales, operations, and finances to provide better visibility of the relationships between results, resources, and capabilities. It aligns business goals and financial targets with decisions and execution across the entire business. Since this planning gathers data from across the enterprise, organizations are better at predictive analysis. Thus, if the analysis forecasts a parts shortage, supply and operations adjust and prevent customers from getting affected.

Most of the time, the argument arises that IBP is just an extended form of S&OP that includes finances and operations. While there are some similarities between IBP and S&OP, it is wrong to say that IBP is an extension of S&OP. Let’s discuss it further.

Regarding the similarities between IBP and S&OP, both processes need extensive supporting data to make correct forecasts. Both align forecasts with the capabilities, and both techniques help senior management make the right planning decisions. While there are similarities between IBO and S&OP, there are certain things that cannot be attained through S&OP alone, and to bridge that gap, IBP is used.

One of the significant differences between IBP and S&OP is that IBP aligns the different departments of an organization towards a single goal. IBP measures the performance in terms of finances, which helps in planning the business activities according to the financial target of the organization. S&OP tends to focus on medium-term planning targets, whereas the IBP process supports long-term, short-term and medium-term strategies.

Who uses Integrated Business Planning?

Integrated business planning is ideal for any company to improve the forecast through IBS, maximize profits and reduce the risks associated with the company’s growth. Companies that adopt this planning obtain several practical benefits, such as reduced holding costs, proactive customer service, demand fulfillment, less time to market for new products, and better collaboration between demand planning and completion. It makes planning and operations more transparent. Thus, companies moving to just-in-time manufacturing find it ideal. IBP is also predictive, so once the company builds up some data, it will improve customer satisfaction. Seeing the future of IBP is expected to help companies to work on strategy planning, modeling, and M&A activities with great confidence. It will also allow companies to inform stakeholders of unanticipated events that affect the business using advanced technologies like machine learning pattern recognition.

How does the IBP Process Work?

There are mainly six steps towards integrated business planning process flow.

• Determining Business Hindrances The first step in Integrated Business Planning is determining the business hindrances holding the company back. It can be a lack of growth and profitability, a complex product portfolio, or a loss of competitiveness. Proper planning and implementation are only possible after identifying the problem.
• Employee Education Once the problem is identified and goals are set, the goals must be effectively communicated to the employees at different ranks. Unless everyone is aware of the goals set by Integrated Business Planning, attaining the business goals is not possible. Companies must organize employee engagement programs to educate employees about the company goal and keep them invested in the business’s success.

What are the Challenges of Integrated Business Planning?

Once the company has appropriately implemented the S&OP processes, the next step is to implement integrated business planning, where the finance is integrated with all other departments involved in planning. Integrating finance may sound like a simple task, but it is not easy. A major challenge companies face while implementing the components of IBP is interdepartmental communication about the IBP elements and their importance. People involved in the physical side of the supply chain use a different form of language than that used by the finance people. Mostly, supply chain people talk in terms of units, product groups, and products, whereas finance people talk in terms of currency and money. This results in different KPIs used for measuring performance, creating a silo-like situation among the departments.

Other than that, communicating the goals with every company employee and maintaining the same motivation to reach that goal is another major challenge for the company management.

When a company adopts integrated business planning to improve forecasts and enhance productivity, there are some risks the company must be aware of. Below are some of the pitfalls that companies need to avoid while implementing IBP.

• All department employees do not share the same level of commitment to achieving the financial goals set by the IBP process.
• Business planning is a step-by-step process. First, companies must ensure that the S&OP process is properly implemented and stable in the business processes. Without S&OP, implementing IBP is a huge step.
• Targets and forecasts may get mixed up and take the business process off track.
• Unavailability of proper data and information is one of the biggest causes of failure of IBP.
• Discussing only short-term goals and ignoring midterm goals and assumptions can reduce the efficacy of the IBP process.
• A lack of thorough understanding of trade-offs can lead to misunderstanding between departments leading to lagging operations.
• Not using Integrated Business planning solutions such as AI/ML-based software applications for decision making.

What is the significance of Integrated Business Planning?

Research revealed that the major impacts of implementing integrated business planning are increased revenue, accurate forecast, and improved order delivery rates which signify the importance of IBP. Besides, there are several other factors of integrated business planning that ensure better performances across the business; some of the factors are discussed below:

• The primary feature of IBP is that companies buy the correct quantity of materials at the right time and at the best price to cater to market demand.
• Successful IBP also ensures more trust and better collaboration among departments, further leading to improved decision-making.
• Companies that adopt IBP have a direct line from purchasing, production, and inventory to sales and marketing, budgets, and financial targets.
• With IBP, companies can align supply chain projections, financial projects, and strategic plans into one strategy.
• With better visibility across all business departments, decision-makers can devise a single plan to drive the integrated business planning objective.
• With IBP in place, companies can easily focus on making an informed decision and reduce decision latency.

Looking for help in Integrated Business Planning Software?

As we discussed earlier, incorporating technology is the best way to consolidate and analyze big chunks of data more accurately and implement integrated business planning more efficiently. As advanced analytics technologies such as Artificial Intelligence have evolved and have been out of the lab, they are helping businesses in various ways. The benefits of using AI in business planning are proven by customer behavior analysis or business operation automation. At 3SC, we provide integrated business planning consulting services and supply chain management solutions tailor-made for businesses. We analyze the challenges faced by supply chains of different industries and find solutions to those challenges that can make business processes smooth and seamless. Our comprehensive AI/ML-based solutions, such as Visilog and Carbonex, not only optimize supply chain management and business planning but also help reduce businesses' carbon footprint and promote environmental sustainability in business.

What are the applications of Integrated Business Planning?

The application of integrated business planning makes operation and planning in different departments in a company more transparent which helps in better forecasting and implementation of data to ensure better customer satisfaction and lower business costs.

What are integrated business planning examples?

One prominent example of integrated business planning is the Uponor Group, which implemented IBP and brought down the number of SKUs from 120,000 to 10,000, bringing down the inventory costs by 50% and a 30% increase in one-time in-deliveries.

Another US-based technology company, Juniper Networks, implemented IBP, which helped them attain 55% lead time and reduce inventory costs by 15%.

What is an integrated planning tool?

An integrated business planning tool is an AI-based software that collects big chunks of data from different departments, analyzes it, and gives demand forecasts that help in the seamless and efficient planning of business processes.

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What is integrated business planning (ibp), and why is it important.

There’s nothing that can bring a business to grinding halt faster than lack of collaboration between different departments and poor visibility of processes within and between departments.

But creating a business plan that integrates all aspects of your organization can be challenging as each business process is often measured by its own, unique set of metrics, and some are more important than others, depending on which department is “running the metrics.”

For instance, while the demand forecast accuracy is a top priority for your supply chain managers, your procurement department may be more interested in reducing the price of raw materials, and your manufacturing division might aim to maximize its capacity utilization. Organizations with inconsistent planning practices risk running inefficiently, which can result in a substantial loss of time, energy, and money. 

So, how do you align the many strategies, operations and functions from each of your departments to make informed decisions about market policies, investments, and even new product or service introductions? 

One widespread method that is used to connect diverse business strategies is Integrated Business Planning (IBP). Developing and implementing an integrated business plan for your organization gives you a clearer understanding of your goals and how to plan to achieve them.

What is Integrated Business Planning (IBP)?

Companies have multiple operational functions – ranging from finance to supply chain, to product design and development, to marketing and sales, ad infinitum. By using IBP, you can link your strategic plans and be more aware of how resources, capabilities, and results relate to one another. This enables you to reach your maximum potential and enhance collaboration across supply chains. 

With digitization driving success, IBP is becoming a “best practice” tool for business planning. From sales to operations to finance, data from every facet of an organization can be incorporated seamlessly. This method of incorporation allows companies to maximize output and understand how their resources, abilities, and outcomes are all working together. It also helps companies analyze what role each sector plays in the business.

Why Is Integrated Business Planning Important?

How can your business benefit from integrated business planning? Let’s take a look at a few benefits:

• Increasing visibility Organizations can integrate data from financial reports, supply chain projections, and strategic plans into their business plans using IBP. By doing so, businesses gain insights into how each part of the supply chain works both independently and collectively. As a result, it enables businesses to discover and resolve problems in an efficient manner.
• Increasing accountability With more visibility, employees are more plugged in and aware of the impact their actions can have on the business as a whole. This makes them more accountable and provides a clear understanding of exactly what their responsibilities are, which increases employee engagement and boosts compliance with processes and procedures.
• Aligning goals and actions An organization with visibility and accountability can get a clearer picture of what it is striving for and helps to ensure that everyone is taking the necessary steps to achieve it. In addition to enabling individuals to do their jobs more effectively, this will also allow the whole organization to run more efficiently.
• Allowing for better decision making An integrated business process enhances a company’s ability to evaluate data, the relevant context, and the big picture at the same time. By analyzing the results, they can make highly informed decisions based on the information they are presented with.

These benefits are desirable for any organization, but implementing integrated business planning successfully can be a complex process. Following best practices for IBP increases your odds of success and improves your outcomes.

Tips and Best Practices for Successful Integrated Business Planning

IBP is potentially valuable for your business. However, when you try to integrate additional functions and strategic planning into your traditional sales and operations planning (S&OP) cycle, it can initially lead to many challenges. Let’s take a look at a few tips for successful integrated business planning.

• Effective governance To make an IBP work, everyone needs to work together as a team and fulfil the company’s objective. Charting the roles and responsibilities of your employees and implementing policies and incentives to create an environment where everyone can work together can help improve team cohesion.
• Clear goal Start with a clear goal for implementing an IBP and how it will benefit your business (and individual contributors).
• Organized process When your process is already designed to align with your organization, it is easier to achieve the desired outcome.
• Right talent The backbone of an organization is its workforce. Choose your employees wisely; look for the skills, experience, and core competencies that are vital to IBP. You’ll need team members who are well-versed in strategic planning, financial planning, and supply chain planning. You will be able to more successfully adopt IBP across the company if you have talented and experienced people on board.
• Insightful analytics Businesses need to be proactive to remain ahead in their respective markets. Real-time analytics enables you to adapt swiftly to disruptions and market changes and make data-driven decisions based on your business strategy.
• Powerful technology Businesses are moving ahead with digital transformation. IBP, being a cross-functional initiative, needs a strong cloud-based technology platform to perform.

IBP has become an integral element of the day-to-day operations of many businesses, ensuring transparency and efficiency throughout the fast-paced supply chain right from procurement through manufacturing and delivery. As an increasing number of companies make the shift to digitization, the implementation of an integrated business planning (IBP) approach is vital.

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• Unveiling the Power of Integrated Business Planning (IBP) in Supply Chain Excellence
• Data Analysts

Integrated Business Planning (IBP) plays a defining role in the overall growth of the business.  In the dynamic business landscape companies are looking for solutions that can seal the gap between various business functions that drive efficiency and agility.

Since the supply chain plays an integral role in the growth of the business, IBP or Integrated business planning in the supply chain becomes crucial.  

In this blog, we will delve into the intricacies of Integrated Business Planning, exploring its role in the supply chain, providing examples, understanding its implementation in SAP, exploring the framework, and deciphering the crucial processes and execution strategies.

Table of Contents

Integrated Business Planning in the Supply Chain

Integrated Business Planning is a strategic approach that integrates various business functions to streamline decision-making processes across an organization. In the context of the supply chain, IBP aims to align demand, supply, and finance functions, breaking down silos and fostering collaboration. By providing a holistic view of the entire supply chain, organizations can enhance their responsiveness to market changes, minimize risks, and optimize resource utilization.

Key Components of Integrated Business Planning

Demand planning.

At the core of Integrated Business Planning is demand planning. This component involves forecasting future demand based on historical data, market trends, and other relevant factors. By aligning demand projections with overall business objectives, organizations can optimize inventory levels and ensure a responsive supply chain.

Inventory Management

Another integral component of IBP is inventory management. This entails overseeing the entire inventory lifecycle, from procurement to storage and distribution. By integrating inventory management into the planning process, organizations can prevent stockouts, minimize holding costs, and enhance overall supply chain efficiency.

Financial Planning

Financial planning forms the financial backbone of Integrated Business Planning. This component involves aligning the budgeting and financial forecasting processes with operational plans. By integrating financial considerations into the overall planning framework, organizations can ensure that strategic decisions are financially viable and contribute to the bottom line.

Sales and Operations Planning (S&OP)

Sales and Operations Planning is the bridge that connects demand planning, inventory management, and financial planning. It involves a collaborative process where cross-functional teams work together to align sales forecasts with operational plans. S&OP ensures that all departments are on the same page, fostering coordination and minimizing conflicts.

Collaboration and Communication

While not a traditional “component,” effective collaboration and communication are intrinsic to successful Integrated Business Planning. This involves breaking down silos between departments, fostering transparency, and ensuring that information flows seamlessly across the organization. Clear communication enhances the effectiveness of the planning process.

Technology Integration

In the digital age, technology plays a pivotal role in the key components of IBP. Advanced analytics, artificial intelligence, and collaborative platforms empower organizations to make data-driven decisions. Technology integration ensures that the planning process is not only efficient but also adaptable to the dynamic nature of modern business.

Risk Management

A proactive approach to risk management is a crucial component of IBP. This involves identifying potential risks, assessing their impact on operations, and developing strategies to mitigate these risks. By incorporating risk management into the planning process, organizations can navigate uncertainties with resilience.

Scenario Planning

Scenario planning involves considering various possible future scenarios and developing strategies to address each scenario. This forward-thinking approach allows organizations to be agile in the face of changing market conditions. Scenario planning is a proactive component that adds a layer of flexibility to the IBP process.

Continuous Improvement

The final key component of IBP is a commitment to continuous improvement. This involves regularly evaluating the effectiveness of the planning process, identifying areas for enhancement, and implementing changes. A culture of continuous improvement ensures that IBP remains a dynamic and responsive strategy for the organization.

Integrated Business Planning Example

Consider a consumer goods company that utilizes IBP to align its sales forecasts with production schedules and inventory levels.

Through a unified platform, the sales team can communicate market demands directly to the production and procurement teams, ensuring that the right products are produced at the right time. This prevents overstock or stockouts, ultimately improving customer satisfaction and operational efficiency.

Nowadays companies have the option of choosing Integrated Business Planning in SAP. Through this, companies can leverage advanced analytics, machine learning, and real-time data to make informed decisions across the entire supply chain.

Integrated Business Planning Framework

Integrated Business Planning (IBP) is a strategic management process that aligns various business functions to ensure a cohesive and synchronized approach to planning and decision-making. It integrates key business processes, such as finance, sales, marketing, operations, and supply chain, to create a holistic view of the organization’s performance. Here is a general framework for Integrated Business Planning along with an example:

Strategic Planning:

• Define the organization’s long-term goals and objectives.
• Identify key performance indicators (KPIs) that align with the strategic direction.

Sales and Operations Planning (S&OP):

• Align sales forecasts with production and inventory plans.
• Create a consensus plan that balances demand and supply.

Demand Planning:

• Use historical data, market trends, and customer feedback to forecast future demand.
• Collaborate with sales and marketing teams to understand market dynamics.

Supply Planning:

• Evaluate the capacity and capabilities of the supply chain.
• Ensure that resources are available to meet demand in a timely and cost-effective manner.

Financial Planning:

• Develop a financial plan that aligns with the operational plans.
• Monitor and manage financial performance against targets.

Scenario Planning:

• Assess various scenarios and their potential impact on the business.
• Develop contingency plans to address potential disruptions.

Performance Monitoring:

• Implement key performance indicators (KPIs) to measure the success of the integrated plan.
• Regularly monitor and analyze performance data to identify areas for improvement.

Collaboration and Communication:

• Foster communication and collaboration among different departments.
• Ensure that information flows seamlessly across the organization.

Let’s consider a manufacturing company that produces electronic devices. The company wants to increase its market share over the next five years. The Integrated Business Planning framework is applied as follows:

• Set a goal to increase market share by 15% in the next five years.
• Identify KPIs, such as revenue growth, customer satisfaction, and operational efficiency.
• Align production plans with the expected increase in sales.
• Ensure that inventory levels are optimized to meet customer demand without excessive holding costs.
• Analyze historical sales data and market trends.
• Collaborate with the sales and marketing teams to understand the impact of promotions and new product launches.
• Assess manufacturing capacity and identify potential bottlenecks.
• Evaluate the reliability of suppliers and establish contingency plans for any disruptions.
• Develop a budget that supports increased production and marketing efforts.
• Monitor financial performance regularly to ensure alignment with the strategic goal.
• Consider scenarios such as supply chain disruptions, economic downturns, or unexpected increases in demand.
• Develop plans to mitigate risks and capitalize on opportunities.
• Track KPIs to measure progress toward the goal of increasing market share.
• Adjust plans as needed based on performance data.
• Facilitate regular meetings and information-sharing sessions among departments.
• Use technology and collaborative tools to enhance communication and coordination.

Integrated Business Planning Process

step-by-step explanation of the Integrated Business Planning process:

Strategic Direction:

• Objective: Define the long-term goals and strategic direction of the organization.
• Conduct a thorough analysis of market trends, competitive landscape, and internal capabilities.
• Engage with key stakeholders to establish a clear vision and strategic priorities.
• Objective: Understand and forecast customer demand for products or services.
• Analyze historical sales data, market trends, and external factors influencing demand.
• Collaborate with sales and marketing teams to gather insights and input.
• Objective: Align the organization’s capacity and capabilities with anticipated demand.
• Evaluate manufacturing capacity, production capabilities, and resource availability.
• Identify potential constraints and bottlenecks in the supply chain.
• Objective: Achieve consensus on a balanced plan that aligns demand and supply.
• Collaborate with cross-functional teams to reconcile demand and supply plans.
• Resolve conflicts and establish a unified plan that meets organizational goals.
• Objective: Develop a financial plan that supports the operational and strategic objectives.
• Align budgeting and financial forecasting with the integrated demand and supply plans.
• Monitor financial performance against established targets.
• Objective: Anticipate and prepare for potential disruptions or changes in the business environment.
• Identify various scenarios that may impact the business, such as market fluctuations or supply chain disruptions.
• Develop contingency plans and strategies for different scenarios.

Performance Monitoring and Measurement:

• Objective: Monitor key performance indicators (KPIs) to track the success of the integrated plan.
• Establish relevant KPIs for each functional area and the overall organization.
• Objective: Foster collaboration and communication across departments.
• Facilitate regular meetings and communication channels between different functional areas.
• Utilize technology and collaborative tools to enhance communication and information sharing.

Continuous Improvement:

• Objective: Iteratively refine and improve the planning process based on feedback and changing circumstances.
• Conduct regular reviews and evaluations of the IBP process.
• Solicit feedback from stakeholders and make adjustments to enhance effectiveness.

Feedback and Adjustment:

• Objective: Gather feedback from the execution of plans and adjust future plans accordingly.
• Evaluate the performance of the integrated plan against objectives.
• Adjust the plan based on lessons learned and changing business conditions.

Frequently asked questions

Why is an integrated business plan important.

An integrated business plan is crucial for aligning various functions, fostering collaboration, and adapting to market uncertainties. It ensures a unified strategy, enhancing efficiency and decision-making.

What is the difference between IBP and S&OP?

While both involve planning, Integrated Business Planning (IBP) is a broader process that includes financial planning, demand forecasting, and more. Sales and Operations Planning (S&OP) specifically focuses on aligning sales forecasts with operational plans.

What is the meaning of integrated planning?

Integrated planning refers to a holistic approach that synchronizes various organizational functions. It involves aligning strategies, processes, and resources to work cohesively toward common goals, promoting efficiency and adaptability.

What is an integrated strategic business plan?

An integrated strategic business plan combines strategic goals with operational plans, financial considerations, and cross-functional collaboration. It provides a comprehensive roadmap for an organization, ensuring that every aspect works in tandem to achieve long-term success.

In conclusion, Integrated Business Planning stands as a strategic imperative for organizations looking to enhance their supply chain efficiency.

By breaking down silos, fostering collaboration, and leveraging advanced technologies, IBP empowers businesses to make informed decisions, optimize resources, and respond swiftly to market changes.

As the business landscape continues to evolve, Integrated Business Planning will undoubtedly play a pivotal role in shaping the future of supply chain management. Additionally, newer technologies like

Data Science is reshaping the way organizations operate.

At Pickl.AI we have curated Data Science courses that will equip you with the right skills that will ensure unparalleled professional growth. To know more about it, click here.

• About The Author
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Raghu Madhav Tiwari

Introducing Raghu Madhav Tiwari, a highly skilled data scientist with a strong mathematical foundation, and a passion for solving complex business challenges. With a proven track record of developing data-driven solutions to drive business growth and enhance operational efficiency, Raghu is a true asset to any organization.

As a master of the art of data analysis, Raghu possesses a unique ability to convert raw data into valuable insights that lead to tangible results. Armed with exceptional critical thinking skills, Raghu employs a meticulous approach to problem-solving that involves leveraging cutting-edge statistical and mathematical techniques to drive informed decision-making.

In addition to his impressive analytical acumen, Raghu is also a gifted communicator and writer, regularly sharing his insights through engaging articles on various topics related to his field of expertise.

Medium: https://raghumadhavtiwari.medium.com/ Github: https://github.com/RaghuMadhavTiwari