The power of connected planning


Published by Jan Veerman, last updated on

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What is planning? As explained in one of my previous blogs, planning is “the process of thinking regarding the activities required to achieve a desired goal. Planning is based on foresight, the fundamental capacity for mental time travel. Planning is a fundamental property of intelligent behaviour. It involves the use of logic and imagination to visualise not only a desired result, but the steps necessary to achieve that result. An important aspect of planning is its relationship to forecasting. Forecasting aims to predict what the future will look like, while planning imagines what the future could look like.”


A theoretical explanation of planning, in real-life we do see all kinds of planning. Most striking is the siloed approach if it comes to the annual budgeting and planning process. There is no consistent plan that connects all the different departments and functions within an organisation. There is no overall approach that enables collaboration across departments, to see the effects of a change in (for example) the planning of the Marketing or the Production departments in the Profit & Loss (P&L) or Balance Sheet (BS). A siloed approach where each department creates their plans based on best efforts, minimal alignment between departments and a structural disconnect that does not reflect updates to departmental plans.


This disconnect can create all kinds of challenges for an organisation. For example, think of an allocation question. The market demand is 100, Production can only produce 80. How do we match these 80 to the demand? Different options can be used like:
– First come, first served
– Allocation principles (each customer gets about 80% of their initial demand)
– Serve the most profitable customers first


The first two options do not much alignment across departments. For the last option, you need to know the profitability per customer. This involves up-to-date financial data.  Sales, Production, and Finance are now involved to make an informed decision.


This can be achieved by implementing connected planning. A planning process and supporting tool that spans all departments, up-to-date information and transparency between the departments. A change in one of the planning parameters of a department will be visible in all departmental plans connected and the impact on bottom-line result (P&L).

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It is safe to say that most companies have a connected Demand & Supply planning process in place. Planned demand is translated into an operational plan to deliver the quantities in time. We do not see that many companies that can translate a change in the Demand & Supply plan immediately into the financial impact, the Financial plan. This connected planning, also known as Integrated Business Planning (IBP), is with the right planning processes in place and a flexible planning tool, not that complicated to implement.

But where to start? From our experience, we suggest implementing a phased approach. Connect Demand planning first, this is in most companies a good place to start. Not too complicated, and it is the driver for the rest of your organisation (o sales = no production). Once implemented, we advise starting to connect Finance. Next step is Operations (Supply Chain). Humand Resources (HR), Marketing can follow, based upon your needs and importance and impact on the plan. The process to come to a truly connected plan can take several years, but once implemented, the benefits are tremendous:
– transparency across all departments
– ability to do scenario planning
– see quickly the impact of a change in plan on bottom-line results
– solve allocation questions in times of shortages

Connected planning is the process to connect the plans of all departments within your organisation to come to one, aligned and transparent plan. True connected planning is rare, we do not see it implemented that often at companies. And that is a pity, connected planning can be of great benefit to your organisation. Thinking of implementing connected planning within your organisation? Make sure you think about connecting the planning processes, as well as selecting a flexible and easy to build and maintain planning platform to support connected planning. Process and tool go hand in hand in this case.

Let’s share your ideas and our expertise over a cup of coffee if you are interested in implementing connected planning!

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