Integrated Business Planning - IBP Roadmap
This is the last blog in a series of 9 on the topic Integrated Business Planning (IBP). In these blogs we will detail our IBP Framework, the importance of a proper IBP implementation and the benefits it can bring organisations. Topic of this blog: IBP Roadmap – Closure.
IBP Framework
In this series of blog posts we highlighted our IBP Framework, which consists of the following areas:
- Main components
- Processes
- Drive
- Align
- Verify
- Control cycle
- Plan
- Do
- Check
- Act
- Resources
- People
- Processes
- Tools
- Analytics
- External forces
- Competition
- Social & Economics
- Risks & Opportunities
- Laws & Regulations
- IBP Maturity level
Integrated Business Planning is a more complex process compared to Sales & Operations Planning (S&OP), due to the fact that for IBP more internal processes and departments need to align, cooperate and share information. And Finance ‘talks’ a different language compared to Supply Chain people, HR ‘talks’ different compared to Sales & Marketing, making it more difficult to align all departments onto the one strategic direction. Each department, each profession has its own language, its own set of metrics to steer the department and its own incentives.
IBP aligns all internal processes, language and incentives to act as one, coherent organisation. The only starting point is the company’s strategy. Without this ‘dot on the horizon’, without your Northern Star, nobody knows which direction to go, which decision to make. IBP aligns Strategy with Finance and Operations. Strategy drives Finance, Finance needs to align with Operations and periodic verification is needed based on the outcomes if your organisation is still on track.
Based on the short feedback loop (Plan – Do – Check – Act), periodic checks are made to see if the organisation is still on track and where adjustments are required. All the internal resources (Process – People – Tools – Analytics) need to be aligned for the greater good, the strategic intent. External factors (Competition – Social & Economics – Risks & Opportunities – Laws & Regulations) do have a constant impact on your organisation. Make sure you are prepared as an organisation to deal with these external forces.
IBP Benefits
If you are interested in implementing IBP, to move from your current S&OP to a more mature IBP process, keep in mind this will require the right mind set from all stakeholders involved. Without top management/ C-level commitment, the implementation of IBP is doomed to fail. The implementation of IBP is mainly a transformation project to change behaviours, to change culture. As we all know, that takes time. It takes continuous commitment, communication, effort and improvement.
But the benefits will be huge! More sales, less costs, improved customer satisfaction, increased employee satisfaction, greater shareholder value, better visibility and alignment up- & downstream in your supply chain….just to name a few. These benefits far outweigh the effort to implement and sustain IBP.
Next steps
Where to start when you want to move to IBP? It seems overwhelming at first when you embark on the IBP journey. Fortunate, we have created a roadmap that defines all activities needed to reach the set mature level of the IBP processes in your organisation. Based on your current level and the to be achieved level, actions can be defined and a planning can be made. These actions and plans can be drafted from a high level to the operational level.
Besides hiring external expertise and knowledge, we strongly urge organisations to have someone with decision power to lead the IBP transformation from within. Someone experienced in the organisation and with authority to move people and departments in the required direction. Someone that connects as easy with C-level as with the production floor employees. Someone that can zoom in but also remains an eye on the bigger picture, the end goal.
Conclusion
S&OP as a profession is relative young, IBP even younger. So it is not a surprise that true IBP is rare, we do not come across many organisations that have implemented IBP and have mature processes in place. Call it S&OP+, a first attempt to transition to IBP. That means that there is still a huge potential to gain!
IBP brings many benefits, not only for your own organisation, but for all stakeholders involved. Suppliers, suppliers suppliers, customers, (local) governments, investors. And the time seems to be perfectly right for organisations to improve their bottom line results by implementing IBP. Supply Chains have never been more disruptive, there is a lot of uncertainty in different areas like availability and pricing of (raw) materials, energy and labour prices, geopolitics, shifting economic powers, wars. The need for better alignment, transparency, flexibility and agility has never been greater.
IBP can bring that next level of maturity in your organisation, making your company resilient. We are happy to discuss your next steps and how we can support your ambition! Please reach out to us at info@planadigm.com or call +316 – 5188 4701.
