Integrated Business Planning (IBP) is arguably the most comprehensive framework to manage planning across an organization.
Ultimately, IBP is the evolution of Sales & Operations Planning, which is a process deeply rooted into sales and supply chain operations. Many organizations therefore manage IBP from within Operations and avoid or disregard Finance participation. But that shouldn’t be the way. Why not? Well, IBP is not an operational process. When done right, IBP is a process to help the C-suite – particularly CEOs – to deploy strategy and make faster and better decisions. And because CEOs speak the financial language, IBP should be a Finance-led process.
With the above in mind, many organizations unsurprisingly fail to get the right level of sponsorship, and their IBP initiatives fail to deliver what they should. CEOs aren’t interested in partial or biased views of a plan. Instead, they expect IBP to help them compose a neutral view that drives business performance effectively. And that’s a succinct reason that CEOs will trust and support IBP.
How, then, can you get your CEO to trust the IBP process? This blog will dive into 5 considerations to help your CEO trust IBP.
Much has been written about the lack of executive support for IBP, but not much has been written about how an IBP initiative can win your CEO’s heart and mind. The following considerations can help:
If you’ve reached this point in the post, you might be thinking that the five considerations above make sense. They aren’t trivial, however. In fact, they can be hard to achieve. How, then, do you get there?
IBP is ultimately about deploying the company strategy through structured and cohesive planning across the organization. And the considerations outlined in this post are difficult to achieve without the proper technology solution.
Often, technology during IBP implementations focuses only on reporting and visualization capabilities, disregarding other key capabilities. For instance, the capabilities below might be disregarded:
When the technology covers all these aspects, Integrated Business Planning becomes the right framework to improve business performance.
And unequivocally, modern EPM solutions are the best choice to bring all these capabilities together and establish an IBP process that serves a purpose for the CEO and C-suite.
IBP done right is ultimately a Finance-driven process. And OneStream’s Finance Platform is the only market solution capable of providing every single mission-critical process for Finance. Need proof? Look no further than Autoliv, a world-leading supplier in safety systems. Autoliv used OneStream and its unified data model approach to transform financial and operational planning to respond to market changes and make faster decisions.
In other words, the unified data model, data management and quality, financial intelligence, automation and analytical AI services in OneStream make it uniquely positioned to win your CEO’s heart and mind.
Want to learn how you can maximize the benefits of your IBP process and get your CEO onboard, read our article on how to unify IBP and maximize the benefits.Read the Article
In the previous blog post of this series, we covered why leaning on a truly single platform with an extensible data model is the most effective way to unify business strategy with planning activities across the enterprise. The prior post also laid out the framework of a unified integrated business planning (IBP) model and identified the hidden costs for organizations that implement IBP built on fragmented tools and spreadsheets.
This final post of the series shows the benefits from an IBP journey and then digs even deeper. Why? To show how an organization can maximize those benefits when the IBP implementation is underpinned by a single platform with an extensible data model.
The benefits an organization can expect from an IBP implementation are diverse. In the big picture, IBP can certainly improve financial and business performance. Figure 1 outlines some of the most remarkable KPI improvements.
The range of improvement organizations claim through those benefits can be substantial, too. According to McKinsey & Company, “The average mature IBP practitioner realizes 1 or 2 additional percentage points in EBIT. Service levels are 5 to 20 percentage points higher. Freight costs and capital intensity are 10 to 15 percent lower – and customer delivery penalties and missed sales are 40 to 50 percent lower. IBP technology and process discipline can also make planners 10 to 20 percent more productive.” McKinsey & Company also emphasizes the importance of keeping P&L owners involved in the IBP process.
Equally important to those benefits is the technology used. What’s the advantage of choosing the right technology to support the IBP process?
Simply put, the choice of technology is pivotal for achieving the highest percentile of the benefit ranges. Yet many organizations undervalue the role technology plays in achieving better results. Instead, those organizations live with sub-optimal IT architectures populated with point solutions, weak integration flows and uncontrollable spreadsheet usage. Those pitfalls only further emphasize why organizations aspiring for excellence should opt for a truly unified platform that covers the breadth of an IBP process.
Going for one platform with the right data integration model not only provides higher business benefits but also results in lower IT costs, frictionless collaboration among teams, more speed in decision-making, enhanced resilience to any changing condition (e.g., market disruptions, growth by acquisition) and less risk.
When one unified platform caters to the needs of integrated business planning, organizations can aspire to get the highest return of value from the IBP process. Having one platform that unifies business strategy with all planning activities, consolidation and reporting provides unmatched levels of performance. And this advantage is exactly what organizations get when choosing to support their IBP journey with OneStream’s Intelligent Finance Platform (see Figure 2).
OneStream’s Value Realization Report validates the platform advantage. The report details the benefits that adopters of OneStream’s Intelligent Finance Platform achieve across the different domains that pertain to corporate performance management: data management, close & consolidation, account reconciliations, reporting, and planning & budgeting. According to the report, OneStream simultaneously generated value in four different areas:
Data management is massively improved as well. According to the report, “Customers improved their data management processes, delivering results between 98% improvement when moving from a complex system with several disparate systems and 10% when upgrading from a system that is already fully integrated but needs to take advantage of more fluid flow of data and information.” This improved efficiency ties directly back to the financial and business performance KPIs introduced earlier in this blog post (see Figure 1) – i.e., significant productivity gains, better use of cash, net working capital, better EBIT, revenue and market growth, better service levels and improved DSO, DPO and DIO.
This blog series highlights why current market conditions require new approaches to integrated business planning and why many organizations struggle to implement IBP due to three main challenges: lack of leadership support, organizational resistance and underestimating the technology needs.
These challenges aren’t insurmountable, however, thanks to advanced technology solutions that truly unify business strategy with planning. And when organizations aspire only to excellence, one platform with a single extensible data model is the key to successful IBP implementations.
OneStream’s Intelligent Finance Platform delivers in that regard. Its data-first approach to integrated business planning unifies the views of strategy, planning and performance – increasing the speed of decision-making and improving business performance.
Discover OneStream’s Intelligent Finance Platform advantage here, and download the Value Realization Report
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As stated in our previous blog post titled “Why Is Integrated Business Planning So Hard?,” we examine why unifying integrated business planning (IBP) or connected planning processes enables organizations to ensure they take a data-first approach to all planning activities. Such a planning approach aims to unify business strategy with planning, budgeting and forecasting activity for all business lines and functions – providing one version of the truth within a single, seamless technology platform and user experience.
A trusted, common view of the numbers provides a robust baseline for agile decision-making and keeps all teams together, collectively trying to achieve the same corporate objectives while staying focused on specific KPIs. In other words, the different teams maintain their independence while working in unison to achieve corporate success by leveraging the same trusted and governed data.
This approach is underpinned on a single technology platform that can manage planning, budgeting & forecasting (PB&F), consolidation and reporting all in one place – without the need to duplicate data or otherwise maintain different solutions. The advantages of this approach are many:
Intelligent Finance teams lead business planning unification and foster collaboration across the organization. While the teams oversee and facilitate the planning activity, doing so should not suppress the detailed planning required between and by the different business lines and functions (e.g. Supply Chain, HR, IT).
Instead, all planning activities should focus on a central Finance planning capability that orchestrates and aligns data, strategy, processes and people across the different business units and functions (see Figure 1). This central capability is simple to understand when the main mechanisms to show market value and performance against strategy goals are financial artifacts such as P&L, balance sheet, and income and cash statement.
Unfortunately, most options for connected planning, integrated business planning are simply not built for this purpose. Why? Rather than relying on a truly unified data model, Finance and IT teams are forced to connect plans across systems and spreadsheets by moving and reconciling data. Those processes, in turn, add material risk and cost to integrated business planning efforts.
In other words, true unification matters – a lot.
Unified business planning is anchored on 3 key principles:
These principles not only provide a robust foundation throughout the IBP journey, but also facilitate the adoption of technology that truly unifies people and processes.
A data-first approach to integrated business planning unifies the views of strategy, planning and performance, increasing the speed of decision-making.
Figure 3 shows the model for unified business planning platform. In light gray, the figure shows the key processes that must be part of the same platform under one data model to reap the benefits of this approach. The figure also displays a representation of an IBP process with a closed loop between planning and execution – a loop that remains aligned to the business strategy because everything relies on the same data and technology.
Unifying integrated business planning brings data and people together, helps the organization model the right behaviors, and removes the friction of traditional technology silos and spreadsheets.
Today, Finance leaders have the organizational influence to lead an IBP process based on a unified approach. However, unifying integrated business planning requires one single platform and extensible data model, not an integrated set of connected modules from the same vendor. This approach offers the most effective way to unify business strategy, planning and performance.
By not taking a unified and data-first approach to IBP process implementation, organizations face the hidden costs of dealing with archaic and fragmented technology:
Learn how to maximize the benefits of Integrated Business Planning in our next blog:
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Planning for business is becoming increasingly more complex, requiring new approaches supported by sophisticated planning technologies. Recent research even indicates that business strategy, financial and other planning activities (operational, HR, sales, etc.) are better together. Thus, Connected or Integrated Business Planning (IBP) has become a hot topic for leaders who want to thrive in this challenging business context. But why is IBP so hard to implement?
This blog series looks to answer that question by diving into why companies aren’t successful when adopting Integrated Business Planning. In doing so, the series explores why the CFO is best positioned to lead the change. Part 1 explores why Integrated Business Planning is difficult.
Connecting or integrating business planning activities across the enterprise is not a new idea. In fact, concepts like xP&A aim to respond to this need from a technology perspective, and terms like Integrated Business Planning have been around for decades. However, today’s unique market volatility combined with failed attempts at connected planning shows why the topic needs to be elevated to the C-level.
Organizations encounter various obstacles when implementing an Integrated Business Planning process. And those organizations invest significant resources and time trying to overcome challenges and get the process to work. Amid a long list of challenges, 3 stand out as the most difficult to overcome:
So…what are the options? Well, many of the solutions out there cannot adapt to current needs due to being made of multiple modules that must be integrated or simply not having the depth and breadth required to support varied planning needs. The alternative, then, is spreadsheet abuse that’s slow, laborious and prone to error. And those organizations that manage to integrate all these modules from different software vendors do it at a high cost and effort, living up with an infrastructure that doesn’t scale and a tremendous technical debt. In other words, the alternative is high RISK and high COST.
Since culture change is never easy and most technology can’t address the needs of truly unified planning, leaders are discouraged from embarking on an IBP journey and stall with sub-optimal processes and technologies.
This sub-optimal status often means a higher impact from risks and uncertainty due to a sluggish decision-making process. Ultimately, that impact translates into the loss of business opportunities and a higher cost of doing business.
Even with strong alignment and commitment around the IBP process, a closer look into the problem shows that organizations struggle to achieve the promised benefits for a specific reason. Primarily, a consensus among planning activities that effectively links strategic & finance goals with financial and extended planning (xP&A) is complicated when technology isn’t fit for the task.
The Pulse Survey launched by BPM Partners in 2021 (Figure 1) displays some of the main challenges an organization can face with budgeting and planning activities:
Collectively, such challenges are strongly correlated to the flawed technology solutions that organizations use to support these processes.
Often, many organizations undertake the implementation of IBP from a process and organizational standpoint, leaving the technology discussion for later.
However, if one set of numbers is a non-negotiable in IBP, why not address the technology trap for starters? Wouldn’t collaboration be easier with a common foundation of data and information? Wouldn’t it be easier for top leadership to execute flawlessly when all planning is based on the same numbers? Why wait for a perfectly fine-tuned process when the right technology can accelerate the adoption of IBP?
When business planning isn’t unified, the leadership team can’t really get quality insights fast enough to improve the business performance. Because planning is a cornerstone to budgeting and forecasting processes, both are impacted when the planning processes are carried out in a containerized way supported by inferior technology. The different departments and functions suffer the consequences of a fragmented planning approach.
Despite the many attempts to join and synchronize all planning activities, these planning processes remain disconnected because they rely on different technologies and systems that cannot provide a common data structure.
But a (better) way forward exists, one where the CFO leads the change by implementing a collaborative planning approach with business lines and other functions. Whether that occurs through xP&A, integrated business planning or connected planning, ultimately what CFOs really need to do is unify business planning.
By unifying IBP or connected planning processes, organizations ensure they take a data-first approach to all planning activities. Such planning approach aims to unify business strategy with planning, budgeting and forecasting activity for all business lines and functions – providing one single version of the truth. That single version is verifiable and certified in just one technology platform.
Learn how to unify Integrated Business Planning in our next blog:
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