objectives of integrated business planning

A better way to drive your business

Managing the availability of supply to meet volatile demand has never been easy. Even before the unprecedented challenges created by the COVID-19 pandemic and the war in Ukraine, synchronizing supply and demand was a perennial struggle for most businesses. In a survey of 54 senior executives, only about one in four believed that the processes of their companies balanced cross-functional trade-offs effectively or facilitated decision making to help the P&L of the full business.

That’s not because of a lack of effort. Most companies have made strides to strengthen their planning capabilities in recent years. Many have replaced their processes for sales and operations planning (S&OP) with the more sophisticated approach of integrated business planning (IBP), which shows great promise, a conclusion based on an in-depth view of the processes used by many leading companies around the world (see sidebar “Understanding IBP”). Assessments of more than 170 companies, collected over five years, provide insights into the value created by IBP implementations that work well—and the reasons many IBP implementations don’t.

Understanding IBP

Integrated business planning is a powerful process that could become central to how a company runs its business. It is one generation beyond sales and operations planning. Three essential differentiators add up to a unique business-steering capability:

• Full business scope. Beyond balancing sales and operations planning, integrated business planning (IBP) synchronizes all of a company’s mid- and long-term plans, including the management of revenues, product pipelines and portfolios, strategic projects and capital investments, inventory policies and deployment, procurement strategies, and joint capacity plans with external partners. It does this in all relevant parts of the organization, from the site level through regions and business units and often up to a corporate-level plan for the full business.
• Risk management, alongside strategy and performance reviews. Best-practice IBP uses scenario planning to drive decisions. In every stage of the process, there are varying degrees of confidence about how the future will play out—how much revenue is reasonably certain as a result of consistent consumption patterns, how much additional demand might emerge if certain events happen, and how much unusual or extreme occurrences might affect that additional demand. These layers are assessed against business targets, and options for mitigating actions and potential gap closures are evaluated and chosen.
• Real-time financials. To ensure consistency between volume-based planning and financial projections (that is, value-based planning), IBP promotes strong links between operational and financial planning. This helps to eliminate surprises that may otherwise become apparent only in quarterly or year-end reviews.

An effective IBP process consists of five essential building blocks: a business-backed design; high-quality process management, including inputs and outputs; accountability and performance management; the effective use of data, analytics, and technology; and specialized organizational roles and capabilities (Exhibit 1). Our research finds that mature IBP processes can significantly improve coordination and reduce the number of surprises. Compared with companies that lack a well-functioning IBP process, the average mature IBP practitioner realizes one or two additional percentage points in EBIT. Service levels are five 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.

When IBP processes are set up correctly, they help companies to make and execute plans and to monitor, simulate, and adapt their strategic assumptions and choices to succeed in their markets. However, leaders must treat IBP not just as a planning-process upgrade but also as a company-wide business initiative (see sidebar “IBP in action” for a best-in-class example).

IBP in action

One global manufacturer set up its integrated business planning (IBP) system as the sole way it ran its entire business, creating a standardized, integrated process for strategic, tactical, and operational planning. Although the company had previously had a sales and operations planning (S&OP) process, it had been owned and led solely by the supply chain function. Beyond S&OP, the sales function forecast demand in aggregate dollar value at the category level and over short time horizons. Finance did its own projections of the quarterly P&L, and data from day-by-day execution fed back into S&OP only at the start of a new monthly cycle.

The CEO endorsed a new way of running regional P&Ls and rolling up plans to the global level. The company designed its IBP process so that all regional general managers owned the regional IBP by sponsoring the integrated decision cycles (following a global design) and by ensuring functional ownership of the decision meetings. At the global level, the COO served as tiebreaker whenever decisions—such as procurement strategies for global commodities, investments in new facilities for global product launches, or the reconfiguration of a product’s supply chain—cut across regional interests.

To enable IBP to deliver its impact, the company conducted a structured process assessment to evaluate the maturity of all inputs into IBP. It then set out to redesign, in detail, its processes for planning demand and supply, inventory strategies, parametrization, and target setting, so that IBP would work with best-practice inputs. To encourage collaboration, leaders also started to redefine the performance management system so that it included clear accountability for not only the metrics that each function controlled but also shared metrics. Finally, digital dashboards were developed to track and monitor the realization of benefits for individual functions, regional leaders, and the global IBP team.

A critical component of the IBP rollout was creating a company-wide awareness of its benefits and the leaders’ expectations for the quality of managers’ contributions and decision-making discipline. To educate and show commitment from the CEO down, this information was rolled out in a campaign of town halls and media communications to all employees. The company also set up a formal capability-building program for the leaders and participants in the IBP decision cycle.

Rolled out in every region, the new training helps people learn how to run an effective IBP cycle, to recognize the signs of good process management, and to internalize decision authority, thresholds, and escalation paths. Within a few months, the new process, led by a confident and motivated leadership team, enabled closer company-wide collaboration during tumultuous market conditions. That offset price inflation for materials (which adversely affected peers) and maintained the company’s EBITDA performance.

Our research shows that these high-maturity IBP examples are in the minority. In practice, few companies use the IBP process to support effective decision making (Exhibit 2). For two-thirds of the organizations in our data set, IBP meetings are periodic business reviews rather than an integral part of the continuous cycle of decisions and adjustments needed to keep organizations aligned with their strategic and tactical goals. Some companies delegate IBP to junior staff. The frequency of meetings averages one a month. That can make these processes especially ineffective—lacking either the senior-level participation for making consequential strategic decisions or the frequency for timely operational reactions.

Finally, most companies struggle to turn their plans into effective actions: critical metrics and responsibilities are not aligned across functions, so it’s hard to steer the business in a collaborative way. Who is responsible for the accuracy of forecasts? What steps will be taken to improve it? How about adherence to the plan? Are functions incentivized to hold excess inventory? Less than 10 percent of all companies have a performance management system that encourages the right behavior across the organization.

By contrast, at the most effective organizations, IBP meetings are all about decisions and their impact on the P&L—an impact enabled by focused metrics and incentives for collaboration. Relevant inputs (data, insights, and decision scenarios) are diligently prepared and syndicated before meetings to help decision makers make the right choices quickly and effectively. These companies support IBP by managing their short-term planning decisions prescriptively, specifying thresholds to distinguish changes immediately integrated into existing plans from day-to-day noise. Within such boundaries, real-time daily decisions are made in accordance with the objectives of the entire business, not siloed frontline functions. This responsive execution is tightly linked with the IBP process, so that the fact base is always up-to-date for the next planning iteration.

A better plan for IBP

In our experience, integrated business planning can help a business succeed in a sustainable way if three conditions are met. First, the process must be designed for the P&L owner, not individual functions in the business. Second, processes are built for purpose, not from generic best-practice templates. Finally, the people involved in the process have the authority, skills, and confidence to make relevant, consequential decisions.

Design for the P&L owner

IBP gives leaders a systematic opportunity to unlock P&L performance by coordinating strategies and tactics across traditional business functions. This doesn’t mean that IBP won’t function as a business review process, but it is more effective when focused on decisions in the interest of the whole business. An IBP process designed to help P&L owners make effective decisions as they run the company creates requirements different from those of a process owned by individual functions, such as supply chain or manufacturing.

One fundamental requirement is senior-level participation from all stakeholder functions and business areas, so that decisions can be made in every meeting. The design of the IBP cycle, including preparatory work preceding decision-making meetings, should help leaders make general decisions or resolve minor issues outside of formal milestone meetings. It should also focus the attention of P&L leaders on the most important and pressing issues. These goals can be achieved with disciplined approaches to evaluating the impact of decisions and with financial thresholds that determine what is brought to the attention of the P&L leader.

The aggregated output of the IBP process would be a full, risk-evaluated business plan covering a midterm planning horizon. This plan then becomes the only accepted and executed plan across the organization. The objective isn’t a single hard number. It is an accepted, unified view of which new products will come online and when, and how they will affect the performance of the overall portfolio. The plan will also take into account the variabilities and uncertainties of the business: demand expectations, how the company will respond to supply constraints, and so on. Layered risks and opportunities and aligned actions across stakeholders indicate how to execute the plan.

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Trade-offs arising from risks and opportunities in realizing revenues, margins, or cost objectives are determined by the P&L owner at the level where those trade-offs arise—local for local, global for global. To make this possible, data visible in real time and support for decision making in meetings are essential. This approach works best in companies with strong data governance processes and tools, which increase confidence in the objectivity of the IBP process and support for implementing the resulting decisions. In addition, senior leaders can demonstrate their commitment to the value and the standards of IBP by participating in the process, sponsoring capability-building efforts for the teams that contribute inputs to the IBP, and owning decisions and outcomes.

Fit-for-purpose process design and frequency

To make IBP a value-adding capability, the business will probably need to redesign its planning processes from a clean sheet.

First, clean sheeting IBP means that it should be considered and designed from the decision maker’s perspective. What information does a P&L owner need to make a decision on a given topic? What possible scenarios should that leader consider, and what would be their monetary and nonmonetary impact? The IBP process can standardize this information—for example, by summarizing it in templates so that the responsible parties know, up front, which data, analytics, and impact information to provide.

Second, essential inputs into IBP determine its quality. These inputs include consistency in the way planners use data, methods, and systems to make accurate forecasts, manage constraints, simulate scenarios, and close the loop from planning to the production shopfloor by optimizing schedules, monitoring adherence, and using incentives to manufacture according to plan.

Determining the frequency of the IBP cycle, and its timely integration with tactical execution processes, would also be part of this redesign. Big items—such as capacity investments and divestments, new-product introductions, and line extensions—should be reviewed regularly. Monthly reviews are typical, but a quarterly cadence may also be appropriate in situations with less frequent changes. Weekly iterations then optimize the plan in response to confirmed orders, short-term capacity constraints, or other unpredictable events. The bidirectional link between planning and execution must be strong, and investments in technology may be required to better connect them, so that they use the same data repository and have continuous-feedback loops.

Authorize consequential decision making

Finally, every IBP process step needs autonomous decision making for the problems in its scope, as well as a clear path to escalate, if necessary. The design of the process must therefore include decision-type authority, decision thresholds, and escalation paths. Capability-building interventions should support teams to ensure disciplined and effective decision making—and that means enforcing participation discipline, as well. The failure of a few key stakeholders to prioritize participation can undermine the whole process.

Decision-making autonomy is also relevant for short-term planning and execution. Success in tactical execution depends on how early a problem is identified and how quickly and effectively it is resolved. A good execution framework includes, for example, a classification of possible events, along with resolution guidelines based on root cause methodology. It should also specify the thresholds, in scope and scale of impact, for operational decision making and the escalation path if those thresholds are met.

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In addition to guidelines for decision making, the cross-functional team in charge of executing the plan needs autonomy to decide on a course of action for events outside the original plan, as well as the authority to see those actions implemented. Clear integration points between tactical execution and the IBP process protect the latter’s focus on midterm decision making and help tactical teams execute in response to immediate market needs.

An opportunity, but no ‘silver bullet’

With all the elements described above, IBP has a solid foundation to create value for a business. But IBP is no silver bullet. To achieve a top-performing supply chain combining timely and complete customer service with optimal cost and capital expenditures, companies also need mature planning and fulfillment processes using advanced systems and tools. That would include robust planning discipline and a collaboration culture covering all time horizons with appropriate processes while integrating commercial, planning, manufacturing, logistics, and sourcing organizations at all relevant levels.

As more companies implement advanced planning systems and nerve centers , the typical monthly IBP frequency might no longer be appropriate. Some companies may need to spend more time on short-term execution by increasing the frequency of planning and replanning. Others may be able to retain a quarterly IBP process, along with a robust autonomous-planning or exception engine. Already, advanced planning systems not only direct the valuable time of experts to the most critical demand and supply imbalances but also aggregate and disaggregate large volumes of data on the back end. These targeted reactions are part of a critical learning mechanism for the supply chain.

Over time, with root cause analyses and cross-functional collaboration on systemic fixes, the supply chain’s nerve center can get smarter at executing plans, separating noise from real issues, and proactively managing deviations. All this can eventually shorten IBP cycles, without the risk of overreacting to noise, and give P&L owners real-time transparency into how their decisions might affect performance.

P&L owners thinking about upgrading their S&OP or IBP processes can’t rely on textbook checklists. Instead, they can assume leadership of IBP and help their organizations turn strategies and plans into effective actions. To do so, they must sponsor IBP as a cross-functional driver of business decisions, fed by thoughtfully designed processes and aligned decision rights, as well as a performance management and capability-building system that encourages the right behavior and learning mechanisms across the organization. As integrated planning matures, supported by appropriate technology and maturing supply chain–management practices, it could shorten decision times and accelerate its impact on the business.

Elena Dumitrescu is a senior knowledge expert in McKinsey’s Toronto office, Matt Jochim is a partner in the London office, and Ali Sankur is a senior expert and associate partner in the Chicago office, where Ketan Shah is a partner.

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What is integrated business planning (ibp) a complete guide.

Integrated Business Planning (IBP) is a strategic management process that aligns business operations with financial goals by connecting various organizational departments. By integrating functions such as Sales, Marketing, Finance, Supply Chain, and Operations, IBP creates a unified view of the company's performance and future direction.

In this blog post, we'll provide a thorough guide to IBP, detailing what it involves and how Finance can leverage it to drive business results and foster collaboration across the organization.

What Is Integrated Business Planning (IBP)?

What is the difference between s&op and ibp, 10 key benefits of integrated business planning.

• How the Integrated Business Planning Framework Works

The Pillars of the Integrated Business Planning Framework

Core elements and stages of the ibp process, key performance indicators (kpis) for integrated business planning, technological enablers for integrated business planning.

• Integration Business Planning Challenges

10 Integrated Business Planning Best Practices

Onestream enables seamless and unified integrated business planning, faqs about integrated business planning.

While the business world and Finance have always had shared language and acronyms, some new (and reimagined) acronyms may now be flooding your feed. One such topic you may be hearing a lot about lately is Integrated Business Planning (IBP). Yet the concept of IBP isn't new. In fact, it's related to Sales & Operations Planning (S&OP) , a concept that's been around awhile.

Still, IBP may seem overwhelming in the context of all the different acronyms related to financial and operational planning floating around lately. For example, IBP, S&OP, eXtended Planning and Analysis (xP&A) and others are just a few acronyms muddying the waters. But this comprehensive guide to all things IBP aims to help demystify the process.

So, what is the meaning of IBP?

IBP ultimately aims to unify business strategy with planning, budgeting and forecasting activity for all business lines and functions – providing one version of the numbers. In turn, a trusted, common view of the numbers provides a robust baseline for agile decision-making. That common view also keeps all teams 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.

The bottom line? IBP is about aligning strategy intent, unifying planning processes and bringing the organization together.

While Sales and Operations Planning (S&OP) is essential for balancing supply and demand and optimizing operational efficiency, IBP takes a more comprehensive approach by integrating strategic, financial, and operational planning. IBP provides a holistic business view, aligning all functions to drive sustainable growth and competitive advantage.

By integrating data from sales, marketing, finance, supply chain, and operations, IBP provides a unified view of the company's performance and strategic direction. This collaborative and data-driven method ensures that all departments work together seamlessly to achieve common goals. Here are some top integrated business planning benefits:

• Enhanced Decision-Making: Provides comprehensive, data-driven insights to inform strategic decisions.
• Improved Financial Performance: Aligns operational plans with financial objectives, driving profitability.
• Better Risk Management: Identifies potential risks early and enables proactive mitigation.
• Increased Collaboration: Fosters cross-functional collaboration and breaks down departmental silos.
• Greater Agility: Enhances adapting to market changes and evolving business conditions.
• Operational Efficiency: Optimizes resource allocation and improves overall operational efficiency.
• Strategic Alignment: Ensures all business functions are aligned with the company's strategic goals.
• Customer Satisfaction: Improves meeting customer demand accurately and on time.
• Performance Visibility: Provides a holistic view of business performance across all functions.
• Continuous Improvement: Encourages ongoing refinement and enhancement of business processes.

How Integrated Business Planning Framework Works

The IBP process is a framework to address the C-suite needs and help implement the business strategy and manage uncertainty to improve decision-making. So what's the secret sauce of IBP to make all of that happen? A collaboration between the different teams under a single view of the numbers that must unequivocally be tied to financial performance. That's how the C-suite gets value from IBP. Consequently, Finance plays a central role in the IBP process.

IBP typically focuses on horizons of 24-60 months, as opposed to the short term. That focus equates to Integrated Tactical Planning or Sales and Operations Planning and Execution. Since the process must be fully integrated, it removes the departmental silos. Plus, the IBP process must adapt to the organizational construct of every business (IBP isn't a one-size-fits-all type of process).

• Data Collection and Analysis: Gathering relevant data (e.g., sales forecasts, production capacities, inventory levels, and financial projections) from different departments.
• Demand Planning: Predicting future demand based on historical data, market trends, customer feedback, and sales forecasts.
• Supply Planning: Determining the resources and capabilities (e.g., materials, production capacity, and distribution channels) needed to meet the forecasted demand.
• Financial Planning: Developing financial plans and budgets aligned with the demand and supply forecasts, considering factors such as revenue targets, cost structures, and investment requirements. Learn more about financial planning and analysis (FP&A) .
• Scenario Planning: Creating alternative scenarios to assess how different strategies, market conditions, or external factors impact business outcomes.
• Management Business Review: Collaborating across departments to make informed decisions on resource allocation, investments, pricing strategies, and operational adjustments.
• Execution and Monitoring: Implementing the plans, tracking performance against targets, and continuously monitoring key metrics to identify deviations and take corrective actions.

The most efficient way to foster this collaboration is through a unified solution and data model that caters to the needs of the various agents involved in each review. In fact, Figure 1 shows how one solution gathering all the capabilities in the greyed area under a unified data model is the most efficient approach to IBP.

Figure 1: A Unified Data Model for IBP

Exploring the core elements and stages of the IBP process provides essential insights into how organizations align strategic planning with operational execution. Let’s delve into the fundamental components that underpin IBP:

• Governance Structure: Establishing a cross-functional team with representatives from key departments to oversee the IBP process, define roles and responsibilities, and ensure alignment with organizational goals.
• Data Integration:  Integrating data from different systems and sources to create a single source of truth for decision-making, using technologies such as enterprise resource planning (ERP) systems, Corporate Performance Management (CPM) tools, business intelligence (BI) tools, and data analytics platforms.
• Collaborative Planning: Encouraging collaboration and communication between departments to share insights, align objectives, and develop consensus-based plans that support overall business objectives.
• Continuous Improvement: Implementing feedback loops, performance reviews, and process refinements to enhance the effectiveness and agility of the IBP process over time.

Key Performance Indicators are crucial metrics that organizations use to measure the success of their Integrated Business Planning and execution. These indicators provide valuable insights into various aspects of business performance, from financial health to operational efficiency and customer satisfaction. Let’s look at some essential KPIs tailored for IBP:

• Forecast Accuracy : Comparing actual sales or demand with forecasted figures to assess the accuracy and reliability of forecasting models.
• Inventory Turnover : Calculating how often inventory is sold and replaced within a specific period indicates efficiency in inventory management.
• Customer Service Levels : Monitoring metrics like on-time delivery, order fulfillment rates, and customer satisfaction scores to measure service performance.
• Financial Metrics : Evaluating financial KPIs such as revenue growth, gross margin, operating profit, and return on investment (ROI) to gauge overall business performance.
• Supply Chain Performance : Assessing metrics like lead times, supplier performance, inventory levels, and supply chain costs to optimize supply chain operations.

Learn more about demand planning KPIs .

In today's digital age, technological advancements are pivotal in enhancing the effectiveness and efficiency of Integrated Business Planning processes. Let’s explore the key technological enablers that facilitate IBP implementation, enabling businesses to achieve greater agility, foresight, and alignment between strategic goals and operational execution:

• ERP Systems : Integrated ERP systems consolidate data from different departments, automate processes, and provide real-time visibility into business operations.
• BI and Analytics Tools : Business intelligence tools and analytics platforms enable data visualization, trend analysis, scenario modeling, and predictive analytics for informed decision-making.
• Collaboration Platforms : Cloud-based collaboration tools facilitate communication, document sharing, and workflow management among cross-functional teams involved in IBP.
• Advanced Planning Software : Specialized IBP software solutions offer capabilities for demand planning, supply chain optimization, financial modeling , scenario planning, and performance monitoring.
• AI and Machine Learning : AI-driven algorithms and machine learning techniques can enhance forecasting accuracy, identify patterns, optimize resource allocation, and automate repetitive tasks in IBP processes.

By leveraging these technological enablers, finance professionals can streamline the IBP process, improve decision-making, and drive business growth.

Integrated Business Planning Challenges

IBP can present several challenges that organizations must address to ensure successful implementation and execution. Here are some key challenges:

• Data Integration : IBP requires integrating data from multiple sources across different departments, which can be complex and time-consuming. Data accuracy, consistency, and compatibility across systems are crucial for making informed decisions.
• Cross-Functional Alignment : Achieving alignment among various departments, such as sales, marketing, finance, and operations, is essential but challenging. Each department may have its own goals, priorities, and timelines, making synchronizing efforts toward common objectives difficult.
• Change Management : Implementing IBP often requires significant organizational change. Employees may resist new processes or technologies, requiring effective change management strategies to ensure organizational buy-in and adoption.
• Technology Infrastructure : Having the right technology infrastructure to support IBP is critical. Organizations need robust software solutions for data management, analytics, and collaboration to facilitate seamless integration and real-time decision-making.
• Forecast Accuracy : IBP heavily relies on accurate demand forecasting and market insights. Inaccurate forecasts can lead to overstocking or stockouts, which can impact inventory management, production planning, and customer satisfaction.
• Cultural and Behavioral Challenges : Cultural differences and varying levels of departmental collaboration can hinder the IBP process. Building a culture of transparency, communication, and collaboration is essential for overcoming these challenges.
• Performance Measurement : Establishing KPIs and metrics that accurately measure IBP effectiveness can be challenging. Organizations need clear benchmarks and performance indicators to track progress, identify areas for improvement, and drive continuous optimization.
• External Factors : External factors such as economic changes, regulatory requirements, and market disruptions can impact IBP outcomes. Organizations need flexibility and agility to adapt their plans and strategies in response to external changes.

Implementing Integrated Business Planning effectively requires following best practices to ensure alignment across various business functions and achieve strategic objectives. Here are some key best practices for IBP:

• Executive Sponsorship : IBP requires strong executive sponsorship to drive organizational alignment and prioritize resources. Executives should champion the IBP process, communicate its importance across the organization, and allocate necessary resources for implementation.
• Cross-Functional Collaboration : Foster collaboration among departments such as sales, marketing, finance, supply chain, and operations. Encourage regular meetings and workshops to discuss forecasts, strategies, and performance metrics, ensuring alignment with overall business goals.
• Data Integration and Analytics : Invest in robust data integration tools and analytics platforms to collect, consolidate, and analyze data from various sources. Accurate and real-time data insights are crucial for informed decision-making and forecasting accuracy.
• Scenario Planning : Conduct scenario planning to anticipate and mitigate risks, respond to market changes, and capitalize on opportunities. Develop alternative plans based on different scenarios to enhance agility and resilience in the face of uncertainties.
• Continuous Improvement : Implement a culture of continuous improvement by regularly reviewing and refining IBP processes. Solicit stakeholder feedback, monitor KPIs, and adjust strategies to optimize performance and adapt to evolving business conditions.
• Technology Enablement : Leverage advanced IBP software solutions that support collaborative planning, data visualization, and predictive analytics. These tools facilitate seamless communication, scenario modeling, and decision support across the organization.
• Performance Metrics : Define clear KPIs aligned with IBP goals to measure progress and success. Monitor KPIs regularly to track performance, identify areas for improvement, and drive accountability across departments.
• Change Management : Implement effective change management strategies to overcome resistance and foster the adoption of IBP processes. Communicate the benefits of IBP, provide training and support to employees, and celebrate successes to reinforce commitment to the process.
• Risk Management : Integrate risk management into IBP processes to identify, assess, and mitigate risks that could impact business performance. Develop contingency plans and monitor external factors to manage risks and ensure continuity of operations proactively.
• Communication and Transparency : Promote open communication and transparency throughout the IBP process. Ensure stakeholders understand their roles and responsibilities, share information openly, and collaborate to achieve shared objectives.

Integrated Business Planning (IBP) is a strategic method that unifies business functions, leverages data-driven insights, and promotes teamwork to attain operational excellence, financial stability, and a competitive edge. By adopting a strong IBP process powered by technology and emphasizing continuous improvement, finance professionals can drive sustainable growth, reduce risks, and stay agile in changing market conditions.

Curious about maximizing the benefits of your IBP process and getting leadership on board? Check out our eBook, Unifying Integrated Business Planning Across Finance and Supply Chain . You'll discover how to align IBP across both teams with real-world use cases as proof points. Plus, gain insights into the unique capabilities of OneStream’s Intelligent Finance Platform in unifying Finance and Supply Chain planning activities.

Learn how OneStream can help you unleash the power of finance and request a demo .

Did you know OneStream also offers a weekly live demo webinar every Friday for 1 hour on a specific topic? View a replay of any of our recent webinars.

H3: Why Is Integrated Business Planning Important?

Integrated Business Planning (IBP) is essential for aligning strategic objectives with operational activities across departments like sales, marketing, finance, and supply chain. Integrating data insights and fostering collaboration, IBP enhances decision-making, optimizes resource allocation, mitigates risks, and adapts to market changes, ensuring cohesive business operations and sustainable growth.

What Integrated Business Planning Software Is Available?

Apart from OneStream’s robust solution, IBP software encompasses a range of solutions tailored to integrate and streamline business functions such as finance, supply chain, sales, and operations. Examples of popular IBP software include Oracle's Enterprise Planning and Budgeting Cloud Service, SAP Integrated Business Planning, and Anaplan. These platforms provide robust data integration, forecasting, scenario planning, and performance management capabilities, supporting organizations in achieving synchronized planning across departments and enhancing decision-making processes.

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Integrated planning: The key to agile enterprise performance management

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Table of contents

What is integrated planning, change as a given: the truth about plans, planning across the organization, the ultimate integrated planning solution.

• Need for real-time insights
• Integrated planning
• Agile and ready organizations
• Integrated planning drives better results

Integration is key to streamlined planning, budgeting, and forecasting. In order to adapt to today's quickly changing business conditions, you need an enterprise performance management solution that creates a single source of truth and delivers speed and agility to your planning process.

Did you know that 33 percent of critical information is delivered late?

The delay of critical information can cause a ripple effect that drives poor decision making and poor results. Today’s business simply cannot afford this type of cost in our customer-centric environment, where data is one of our most valuable assets. To stay ahead of the competition, businesses rely on a solution that can deliver acceleration, agility, and collaboration in every part of the organization.

Integrated planning ensures all parts of the organization are connected and planning is streamlined.

A must in the culture of “now.”

In virtually all industries, work has become more interactive and collaborative. More sharing is required, and more data is available than ever before. Success means integrating information across strategic and operational perspectives, as well as different functional and external sources.

Integrated planning mirrors the modern way we do business — it elevates the critical value of collaboration and cuts through data silos, driving more access to information and faster insights. Leaders use highly collaborative approaches to plan, budget, and forecast. Business planning requires accurate and complete data and buy-in across the entire organization, both from the top down and the bottom up. It sounds simple, but organizational silos are some of the biggest obstacles to accomplishing good work because they hinder critical decisions that strategically steer the business. And at the modern enterprise, silos are everywhere.

Integrated planning starts with a sophisticated planning platform that everyone in the organization can use, creating one source of truth. Data from diverse data sources such as ERPs, CRMs, and HRMs is unified, so users can access the information they need when they need it. Integrated planning helps ensure that plans, budgets, and forecasts are created with a holistic approach. Trends are easier to spot and quickly act on with more accurate and reliable plans. According to analysts at the Aberdeen Group , those organizations that champion data accessibility and collaboration between stakeholders promote organizational accountability and decrease time-to-decisions while increasing revenue. 1

The fact of the matter is that without effective communication, coordination, and collaboration between stakeholders, there is no way to improve organizational performance. 1

Bringing together people, data, and technology leaves organizations well-poised for optimal performance. Most importantly, integrated planning enables employees to be agile in responding to changing circumstances and able make the best decisions possible — all at the speed of modern business.

According to an Aberdeen study, 1 leaders who adopt enterprise performance management tools show a keen understanding of the importance of collaboration. They recognize that to make data driven decisions, they need to make all information accessible by integrating data and breaking down silos. Figure 1 shows steps taken by leaders to democratize data and drive more accurate forecasts.

Leaders put a high value on data integration and accessibility. They see the value of providing real-time data to decision makers and taking the guesswork out of forecasting. These strategies create comprehensive, actionable visibility into overall company performance and drive better results.

Gartner Predicts by 2020, at least 25 percent of large organizations will increase planning accuracy by integrating key operational planning processes with financial planning and analysis. 2

Do you have an integrated view of your data?

I do not feel confident in where to find comprehensive data, even for just my department

I have a good handle on my own departmental data (but only mine)

I have access to my data and that of other departments that impact my planning

IBM Planning Analytics helps Deutsche Bahn unite its global enterprise

Deutsche Bahn AG is a German railway company, and one of the largest IBM Planning Analytics customers with over 6,000 users worldwide. Deutsche Bahn uses IBM Planning Analytics to unite their wide-ranging operations across the globe, ensuring that the most accurate data is being used to create critical plans and forecasts that drive their business forward.

The truth about plans is that they always change. The goal of a dynamic, integrated planning approach is not to create a perfect, fixed plan. It’s to use all the resources available to create the most accurate, flexible and transparent plan possible, using a solution that does more than just plan — it analyzes data, reveals trends, and allows for real-time iteration.

Better, quicker access to data means faster and more informed decisions, laying the foundation for an organization to be agile and ready to pivot when changing business conditions demand.

If you’re reading this and thinking, “great, the finance team integrates all our plans, so we are off the hook,” think again. While we’d like to think that finance is the well-informed master of plans, miraculously weaving them together in perfect harmony and balance, that’s not always the case. In fact, it rarely is. Many, many finance teams rely on the manual collection of data into spreadsheets, which are often disconnected. Remember that much of an organization’s critical planning starts outside of finance and never gets communicated back up the chain or across the organization. There are simply too many top-down and bottom-up communication problems. Spreadsheets only complicate smooth communications. When a finance person is collecting and analyzing budget spreadsheets from across the organization, there is high risk for error in the process of combining and editing, causing confusion at the highest levels. Contradictory data can inhibit a clear picture of what is actually going on and identifying business drivers or detractors. Spreadsheets have proven over and over to be a highly imperfect yet highly common business practice.

With real-time access to data, companies take the guesswork out of planning, decreasing time involved in forecasting and increasing forecast accuracy. 3

Bye bye, silos. Hello, cross-functional planning.

A centralized, automated solution for performance data and planning allows coordination between different parts of the business and enables more streamlined, accurate plans. Leadership needs to understand what is truly driving the business — what causes increases and decreases in revenue or demand. At every level, access to a full range of data is critical to understanding how change (both internal and external) impacts the business. Though planning often starts with finance, other areas of the business can benefit from a dynamic planning solution as well. Let’s dive into a few use cases.

Supply chain planning

The term “operations” covers an enormous range of business activities. But one that’s almost universal is supply chain management. Supply chain planners are under constant pressure to reduce costs, increase efficiency and improve margins. Unfortunately, too many of them lack visibility into data and are misaligned with other teams. One centralized tool can help connect operational tactics with financial plans to allocate resources more effectively in response to market opportunities or competitive threats. This helps planners avoid mismatched data across multiple spreadsheets and enables them to pivot in the case of supply chain disruptions.

“ Our managers all have quick, easy access to the latest operational data via detailed reports that help them make better-informed decisions to improve the efficiency of the entire supply chain. ”

- Homarjun Agrahari, Director, Advanced Analytics, FleetPride

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Workforce planning

A company is only as good its people. That’s why it’s so important to hire and retain the right talent. Alignment between HR, finance and operations is crucial to ensure that the right people are in the right roles at the right time in order to meet organizational demands. This is rarely a simple task and too often it involves manual spreadsheet-based processes. Ensuring that departmental staffing targets are in sync with broader organizational objectives requires high levels of planning integration.

“ Our business is based on people. IBM Analytics is helping us manage that critical asset much more efficiently and effectively than ever before. ”

- Nadia Bertoncini, Coordinator of Governance, Projects and HR Analytics for Latin America, Natura Cosméticos

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Sales planning

Misalignment between finance, marketing and sales could lead to investment in the wrong initiatives, missed opportunities and inaccurate revenue forecasts that can severely hinder sales growth. And in a fast-moving market, manual processes and siloed systems are detrimental to agility. Decisions that are based on outdated information can lead to misguided sales strategies and thus lost sales and lost revenue. It’s critical to unite data under one roof for one single view to boost sales and effectively manage sales people.

“ The sheer level of detail that IBM Planning Analytics provides is very impressive … We can calculate our sales and gross margins for each SKU in IBM Planning Analytics and generate insightful reports at the click of a button. As a result, senior managers can rapidly access the comprehensive information they need to make effective strategic decisions. ”

- Vince Mertens, Group Accounting and Consolidation Manager, Continental Foods

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Marketing planning

Constantly changing customer preferences and rising customer expectations require marketers to interpret high volumes of data and respond appropriately. But siloed data systems give only a partial picture and hinder smart decision-making. In addition, marketing teams can be fragmented and often disconnected from sales. Siloed planning causes misalignment with overall marketing goals, driving misallocated spend on the wrong elements of the marketing mix. Manual, siloed processes reduce visibility into how marketing activities affect one another, how marketing and sales touches move a lead through the funnel and how marketing helps achieve overall financial and business goals.

“ We first needed a better handle on our sales data. With so many lines of business, channels, and franchisees, collecting and consolidating this information was something that we knew we could do better. ”

- Donald Neumann, Demand Manager, Grupo Boticário

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IT planning

With IT, you need a business case for every dollar spent. But balancing the IT needs of an entire organization with digital transformation objectives and constant technology innovation is no simple task, and often requires additional resources. That’s why it’s so important leverage a planning solution that keeps IT focused on the projects that matter, automates planning tasks, gives a clear view into resources available and helps measure ROI. It’s also critical to coordinate with both finance and human resources to ensure the right resources are provided for IT initiatives and projects.

“ A few years ago, my team probably spent around half their time just keeping everything running — now it’s around 10 percent. With the move to IBM Analytics in the IBM Cloud, we have 40 percent more time to focus on working with the business to add value. Instead of asking ‘how do I make it work?’ we ask ourselves ‘how do I make it better?’ It’s a quantum shift in mindset. ”

- Vimal Dev, Vice President – IT, Global Enterprise Applications Leader, Genpact

Learn more about IT planning

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Operations, sales, marketing, human resources and other departments and disciplines all have a need for fast, flexible planning and analysis. And all of them can use the same tools to provide insight and manage performance. When people in one part of the organization see how their decisions affect other parts of the organization, all of the activities will be better coordinated and drive better results. In fact, according to Aberdeen, leading organizations are those who align planning across departments at double the rate of laggards in areas like sales, marketing and finance.

Become a leader

With IBM Planning Analytics , you can break down silos and generate an integrated view of your departmental or organizational performance. The solution enables you to create more accurate forecasts, identify potential performance gaps before they occur and make resource allocation decisions quickly and intelligently. Using multidimensional modeling and scenario analysis, IBM Planning Analytics lets you drill down into your data to examine the ripple effects of alternative courses of action and understand how your decision will affect related areas of the organization and ultimately impact the bottom line.

Using what-if scenario analysis to make smarter decisions

With IBM Planning Analytics, you can build multidimensional models and perform “what-if” analysis to explore scenarios or test business assumptions. Creating and maintaining sophisticated models with advanced sandboxing capabilities is simple. Easily test business assumptions and model scenarios to immediately see the impact of alternative courses of action on before deciding to implement changes.

IBM Planning Analytics offers all areas of your business — finance, operations, HR, sales, marketing, operations, IT and more — the ability to solve problems today and respond to new challenges with agility tomorrow.

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What is IBP? Process, Strategy & Benefits

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The platform for orchestrating performance.

Integrated business planning (IBP) continues to grow in popularity and adoption. And no wonder—when implemented, it provides a solid foundation to meet key goals. But with many stakeholders and processes involved, it’s not always easy. Where should you start in order to succeed on your journey to true IBP?

What is Integrated Business Planning (IBP)

Integrated business planning — the subject of a new report from the Association for Finance Professionals (AFP) — is a single holistic plan that seamlessly connects strategic plans with sales plans, operational plans, and financial plans while balancing practical constraints about the availability of resources and funding with the business’s financial objectives.

Benefits of Integrated Business Planning

When you’re looking for IBP best practices, a great place to begin is by taking advice from experts like Ken Caron and Ken Olsen of Deloitte. In a webinar (now available on demand), they shared their definition of IBP, discussed some core ideas behind it , and described how you can kick-start your efforts to incorporate IBP into your enterprise. We’ve recapped some of their message here, starting with an important question: Why should a company do IBP? They offered three reasons:

• Alignment and accountability. Instead of spending time and energy debating which plan to follow, all stakeholders agree on one plan—and understand their role in accomplishing the goals of that plan.
• Better decisions and actions. The structured process that comes from a well-built IBP approach enables companies to focus on making better-informed decisions and taking the best action based on those decisions.
• Increased visibility. IBP enables companies to incorporate insights from supply chain projections, financial projects, and strategic plans. And the more insights incorporated into projects, the better informed a company’s decisions will be, which, in turn, will be more likely to contribute to business goals like profitability and efficiency.

So now that you know the potential benefits of IBP, where should you begin?

6 Tips to Succeed at Integrated Business Planning

You need executive alignment and a clear vision before starting anything else. Find an executive willing to sponsor your efforts, “sell” the process, align stakeholders, and consult on change management. When you have a champion in high places, you’re on the right track.

IBP is a journey, so you need a roadmap of prioritized actions that drive quick wins and sustainable benefits. But before you can plan that roadmap, you need to understand the basic elements of an IBP framework, which we detail below, along with the benefits each element brings to the table.

• Effective governance. Clear roles, decision rights, policies, and incentives create an atmosphere that enables everyone to work together as an organized unit to achieve the company’s mission.
• Clear mission. A defined aim sets the path for IBP and defines what IBP will deliver.
• Organized process. When processes are cross-functional and designed to align the organization toward one desired outcome, you can focus on meeting the goal instead of maintaining the process.
• Right talent. Build a talent base with the skills and core competencies essential to IBP, such as strategic planning, financial planning, and supply chain planning . With skilled and experienced employees on board, you’ll be able to more effectively implement IBP across the enterprise.
• Insightful analytics. With access to real-time analytics, you can run “what-if” scenarios, quickly respond to disruptions and market adjustments, and make insight-driven decisions the core of your business planning. This helps you be proactive and stay ahead of your market instead of relying on reactive decisions.
• Powerful technology. Since IBP is a cross-functional initiative, you need an agile, flexible, cloud-based technology to provide a central platform for IBP collaboration and execution.

In their webinar, our two Deloitte experts are joined by Vivek Soneja, Global Head of Supply Chain Solutions at Anaplan. They discuss how you can make IBP a success, as well as some common reasons why IBP initiatives fail. To learn more about how you can succeed at IBP, watch the webinar.

Strengthen the connection between business and supply chain