Integrated Business Planning technology: Well prepared, half accomplished

1. Start with the ambition
In my view, the best way to embark on an IBP transformation is to start with the core ambition – and through that, creating a clearly articulated rationale that captures the hearts and minds of people. Remember, few people want to change just for the sake of change, so leaders will not only have to work to clarify the direction and path for change, but also igniting the passion among people and building that shared sense of purpose and commitment to take the organisation to the next level when it comes to integrated planning.

A core ambition will also give you the chance to ask some very fundamental questions about the success criteria of your IBP journey, for example how can your future IBP setup be the steering wheel of your end-to-end value chain? How can IBP govern your aligned and integrated plan across functions? How can IBP enable timely and informed business decisions? How can it enable agile scenario planning on risk and opportunities? And how can IBP serve as the direct link between your strategy and execution whilst making sure that you are living your values throughout your value chain?

2. Set the baseline using a multi-dimensional approach
Once you have a clear and aligned ambition, you need to establish the starting point of your IBP transformation, which is your baseline. Because, as the saying goes: “You do not know how far you have come unless you know where you came from.” That is also very true in the world of business.

What is important here is that benefits can be measured in different dimensions, spanning across tangible and intangible benefits. For example, consider:

• Process behaviours: How does the current behaviour of different participants in the planning cycle align with your future ambition?
• Key Performance Indicators (KPIs): How do current KPIs align with the IBP ambition, and do they effectively enable your transformation?
• Value drivers: How do the current planning KPIs align with the overall value drivers of your company, and again, does the current setup support future transformation?
• Process success: To what extent does your current planning process deliver on the defined success criteria?

3. Use top-down verification AND bottom-up authentication
When setting the ambition for an IBP transformation, most companies will apply some kind of top-down verification by which the management team commit to the ambition and frame it within the wider strategic direction of the company. Similarly, benchmarking KPIs against industry performance also gives an indication of which improvements can be expected from an IBP transformation – and experience from software providers and consultancies can be used to give an indication of the financial benefits that can be expected from an IBP transformation.

This is not a wrong approach at all. However, it is essential that the top-down verification is augmented through performing a bottom-up authentication by the people who work with IBP every day. With a bottom-up authentication, the leadership team is able to assess whether there is in fact a commitment to behavioural change within the organisation, whether this behavioural change is sufficient to drive KPI improvement, and whether the improvement of the identified KPIs will actually lead to the desired financial results.

4. Enable and reinforce the targeted benefits
Paving the way for transformation also means having the right reinforcement mechanisms in the organisation. Part of this work touches upon the softer sides of transformation (fostering understanding and conviction, developing talent and skills, having your leaders act as role models, etc.), but it might also come from the more formal structures of changing roles and responsibilities, tying benefit realisation to performance targets as well as being very clear about the consequences of non-compliance on both the individual and organisational level.

For some, this might sound old-fashioned in a modern, purpose-driven organisation, but all experience shows that true cross-functional collaboration is hard to achieve, which is why it is important to reward those that actually foster teamwork, knowledge-sharing and transparency – and ultimately are ready to sacrifice their own agenda to see the whole organisation succeed.

So, to sum things up:

• A successful IBP transformation starts with taking your time to set the right ambitions.
• Your baseline should be expressed and measured on different dimensions, including process behaviours, KPIs, financial measures and process satisfaction.
• Bottom-up authentication is just as essential as leadership commitment to ensure that the benefits realisation targets are realistic.
• Benefits should be reinforced through various enablers such as training, communication and performance management.

Finally, remember that benefits are enabled through change, and therefore a robust change management approach addressing the transformation is required right from the start. At the end of the day, organisations do not change unless individuals do. For an IBP transformation to be successful people need to know WHAT needs to be done differently, WHO should behave differently, HOW does new behaviour translate into success, and WHY is it important. Those are fundamental questions that should never be neglected – and the reason why preparation is everything.