What is Integrated Business Planning (IBP)?
Oliver Wight defines IBP as follows: Integrated business planning is a decision-making process to align strategy, portfolio, demand, supply and resulting financials through a focused and exception-driven monthly re-planning process. While the definition above restricts itself to the process, any improvement typically requires combined work on people, processes and systems.
Considerations for Implementation
There are various reasons and stages when companies decide to do this implementation. Regardless of the reason and timing, it remains a difficult journey. For starters, one must contend with the alphabet soup of S&OP, SnOP, SIOP and IBP. Are these the same thing with a different name or are these different processes? One has to think about where to start. One has to make a decision on hiring or not hiring a consultant. If a consultant is to be hired, then which one?
It is not just about the start: One needs to look at current processes and decide what stays and what goes away. This is more difficult than it sounds. Pride of ownership and resistance to change often get in the way of these changes. Then, as part of the implementation, one must decide:
- What, if any, new processes need to be brought in?
- Who will own the IBP?
- Who or which department will own which sub-process?
- How to integrate and align with the strategy into the planning process? Most planners find it easier to react in the moment and firefight. How to stop this?
- How to integrate finance into the planning process?
- What if any software needs to be implemented to support the process?
- Planning software
- Process software
- Where will the data come from?
- Does the team need any new training?
Once the issues above are ‘resolved’, one needs to worry about the sequence of implementation steps or changes. Of course, people go through different steps than processes or systems. For example, people may go through the steps of Inform => Understand => Begin use => Internalize => Champion. By contrast, systems might go through Data Collection => Analysis => Diagnostics => Options => Optimize.
Selection of a planning system can present its own issues: What and how much should be out-of-the-box standard functionality? And what should be considered a special configuration for my business? What should be automated, system driven, and what should be input by people in the business? What is the right level of detail such that approximately right (as opposed to precisely wrong) decisions can be made in the IBP process?
Register now and join us on Wednesday, March 1 at 11 a.m. ET as we discuss these challenges and more associated with the implementation process of IBP.