No chain is stronger than the weakest link. So is the case for Integrated Business Planning. If you work with IBP or S&OP, you know this already: You might have the right technology, but the wrong processes – or you might have the right people, but inadequate technology, and so on. In any case, not getting things right means reducing – or simply missing out on – many of the essential benefits of IBP, including linking strategy to execution, creating end-to-end visibility through the value chain, enabling timely business decisions, cross-functional collaboration, agility and resilience, and more.
Why are some companies missing out? Well, typically organisations approach the IBP challenge from one of two angles. Many start from a technology perspective, using the latest technology to integrate tactical planning all the way through Marketing, Sales, Supply Chain and Finance in a single IT solution – and thereby aligning the entire organisation behind one optimised plan. Other companies have decided to approach IBP from the process side and are looking to transform their S&OP process into IBP, zooming in on risk and opportunity identification, scenario planning and decision making.
There is absolutely nothing wrong with these approaches, and both technology and processes are vital parts of IBP; however, what’s important is that one’s focus does not become a tunnel vision, and that we realise that technology and process optimisation are only two of the many enablers that need to come together to allow you to enter a whole new era of transparency and control.
Getting the enablers right
In Deloitte, we help companies implementing Integrated Business Planning every day, and it’s honestly fantastic to see how they are taking leaps into a digital, sustainable and collaborative future. It’s also during this work that we’ve identified six crucial enablers for transforming into Integrated Business Planning, and thus reaping the benefits of a truly collaborative IBP process where tactical plans across portfolio, customers, production- (or service-) resources are aligned with business targets – and where the executive team is provided with a transparent overview of the company’s situation and thus the opportunity to make the appropriate decisions in time.
The six enablers are:
- Purpose: Few people want to change just for the sake of change, meaning that there has to be a clear purpose that captures the hearts and minds of people – and clearly aligns with the strategic intent, including understanding the external and internal business challenges, risk & ops – while also aligning functional targets and KPIs in the end-to-end process. For some companies, this means asking some very fundamental questions about what exactly the IBP process should deliver, for whom, when and why.
- Governance: Effective governance is vital to succeed with IBP, and many companies will need to look for more effective governance in order to mature, enhance and optimize the IBP process, including having roles and responsibilities clearly defined, understood and embedded in process behaviours. Some companies also appoint a fully dedicated IBP manager who is independent from day-to-day functional tasks, often reporting directly to the CFO or CEO to stay unbiased from functional agendas.
- Process: When it comes to the IBP process, focus should be on the mid- and long-term horizon, rather than the past. Underlying processes must have sufficient scope and maturity, adjacent processes should be aligned to the drumbeat, including embedded risk & opportunity modelling and scenario planning. Today, many companies struggle to discuss beyond 3 months, particularly since most meetings start with KPI review and year to date. Why not start with the future? Here, things can actually be impacted and shaped.
- People: No one can change without having the necessary skills, knowledge and capability to do so. Even experienced supply chain practitioners may need to learn and implement a new skill set. The same goes for leaders who need to show the way for trustful collaboration between functions.
- Technology: Planning technology is a whole chapter in itself, but what we’re generally seeing right now is that planning technology is finally living up to its promise to support agile and resilient supply chain and planning processes – and offer more capabilities at a lower cost than ever before. With the right technology in place, functional plans can finally be fully integrated in the end-to-end process, even globally. Planning applications can also be used to provide the latest concepts and deep-dive features within each process area.
- Data: Data quality has to be persistent throughout the end-to-end process, and data to support the different process steps should be easily and readily available. Unfortunately, many companies still operate on incomplete, fragmented and siloed data, often hidden in static spreadsheets. For IBP to work successfully, organisations will have to have one centralized data model connecting all key functions through a digital core – something many companies are investing in at the moment, and also an area where we’re seeing huge improvements as companies transition into the digital economy.
Finally, in transformational change, leadership is even more important than during incremental change due to the complex, multi-dimensional nature of the activities undertaken. The value of role models cannot be overestimated, and companies that intentionally manage their cultures through passionate change champions almost always outperform companies that do not.
Forfatter spotlight
Camilla Thuge Lund
Camilla Thuge Lund is partner in the Supply Chain & Network Operations offering at Deloitte Denmark. She is an expert in Integrated Business Planning, S&OP & IT with more than 20 years of experience from high performing clients and companies. Camilla's core experiences lies within business architecture, governance, change management, benefits realization and IT capabilities across end-to-end planning, where Camilla has acted as project manager as well as subject matter expert. Camilla has further worked with system selections, Transformations, Global Implementation & Rollout. Camilla is the founder and facilitator of the Danish S&OP network.