Integrated Business Planning (IBP) is a management process that involves aligning an organization’s business plans, financial plans, and operational plans to achieve the company’s overall strategic objectives. Integrated Business Planning integrates various business functions such as sales and operations planning, finance, marketing, supply chain management, and human resources.
The primary goal of IBP is to create a holistic and coordinated approach to business planning, which enables organizations to make informed decisions that are aligned with their strategic objectives. By bringing together different business functions, IBP allows organizations to break down silos and collaborate more effectively across departments.
While Integrated Business Planning is particularly popular among organizations who want to synchronize their supply and demand numbers, it can be for any company who wants a more complete and integrated planning process, no matter which industries or departments it might be.
A McKinsey survey of 54 senior executives, only about one in four believed that the processes of their companies balanced cross-functional trade-offs effectively or facilitated decision making to help the P&L of the full business.
This is a big reason why more and more companies are looking to do Integrated Business Planning– because it improves decision making that helps the P&L of the business.
Here are some things to keep in mind that will need to be done in order to implement a successful IBP:
- Data Gathering
- Demand Planning
- Supply Planning
- Financial Planning
- Scenario Planning
- Performance Management
- Review and Adjustment
Important note: For different companies, each of the steps will look different. But even if you can’t completely finish an entire step, or don’t feel that it’s fully ready, it’s worth it to start your Integrated Business Planning process. For example, financial and scenario planning is a never ending process, so even if you don’t feel that it is complete, starting integrated business planning will help you understand what is the most important and what still needs to be done.
How to get started with integrated business planning
Conducting integrated business planning can be a complex process, but like a lot of things in life, sometimes the hardest part is just making the plan and getting started. Here are the 8 steps to conduct integrated business planning successfully:
- Define the business strategy- The first step is to define the organization’s business strategy and objectives. This involves determining the organization’s long-term goals and priorities, as well as identifying key performance indicators (KPIs) that will be used to measure progress.
- Identify stakeholders- Identify stakeholders from across the organization who will be involved in the IBP process. This includes representatives from different business functions such as sales, marketing, finance, and operations.
- Establish a cross-functional team- Establish a cross-functional team to lead the IBP process. The team should include representatives from each business function, as well as executive sponsors who can provide support and guidance.
- Develop a roadmap- Develop a roadmap for the IBP process, including timelines, milestones, and deliverables. This should include a clear outline of the steps involved in the process, as well as the roles and responsibilities of each team member.
- Identify data sources- Identify the data sources that will be used to inform the IBP process, such as historical sales data, market research, and financial projections.
- Define the IBP process- Define the IBP process and the tools and technologies that will be used to support it. This may include software platforms that can integrate different business functions and data sources, especially tools that can help with scenario planning and forecasting as well.
- Pilot the process- Begin by piloting the IBP process with a small group of stakeholders to test its effectiveness and identify areas for improvement.
- Scale the process- Once the IBP process has been successfully piloted, scale it up to include more stakeholders and business functions. Continue to refine and improve the process over time.
Conclusion
Conducting integrated business planning has many benefits including improved collaboration and agility throughout the organization which leads to better decision making and enhanced forecasting.
Overall, getting started with IBP requires a clear understanding of the organization’s business strategy and objectives, as well as the involvement of cross-functional teams and executive sponsors. By taking a structured and iterative approach to the process, organizations can successfully implement IBP and achieve their long-term goals.
