Trend # 5 – Integrated Business Planning
As I joined back SAP, continuing on the ePM trend blog series, getting out the next one which is very close to my heart ‘Integrated Business Planning’.
Organizations do lot of planning in silos. Sales folks get together and do their annual plans, and revisit them every quarter, month and even weekly. Operations – whether it is Production, Servicing Operations, HR do their own planning based on often outdated sales plans. Offcourse there is lot of maturity in the sales and operations planning, with supply coming closer to demand. On top of all this, the Office of CFO/FP&A or Finance do their budgets, financial planning, monthly forecasting at a much higher level and most often do not drive based on the plans built by sales or operations, but are their own version working with LoB managers. Finance plans basically drives the earnings forecast to be published to external stakeholders. While many big corporations have started doing a good job at each of this area, there is no connected framework that would make sure all of the plans leads to unified external forecast reporting as well as internal management alignment. This silo planning also results in different assumptions and presumptions floating around and people grappling to understand which are right, committed and agreed plan.
Integrated Business Planning is a framework that would bring all the silo planning together into a comprehensive end to end process that would result in more accurate business forecast and predictable business. While this has been a dream for many companies, it is still way behind and would be a framework we hope businesses adapt to over the next decade, supported by suitable technology.
Lets look at below picture to understand Integrated Business Planning
” Integrated Business Planning runs top down/bottom up across the pyramid with different level of detailed planning, with varying frequency. While the top most level is often more integrated across sales, operations and finance, as it goes down, there is definitely much of things happening in silos, with no communication between them. This is essentially is not optimal and leads to disjointed effort towards goals of the organization. Building a framework to integrate these silos is challenging but would be very beneficial. Also it is essential to have the monthly forecasting cycles driver based, where operational drivers drive the end financial plans, and offcourse sales targets drive the operational capacity and suppy, with overall goal of profitable revenue growth. While the main issue in integrated business planning is silo planning, there are other parts that should be covered as part of this integrated business planning initiative, looking The specified item was not found., The specified item was not found. especially to incorporate The specified item was not found., proactive addressing The specified item was not found..
The benefits of this framework would help business to overcome pressures of rising customer order fill rate expectations, The specified item was not found., better cash flows and orchestrated top down/bottom up alignment.
Integrated Business Planning is definitely a significant item for improving Enterprise Performance management. Technology solutions are gearing up to support this framework significantly. Worth trend in the ePM area for the next decade.
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