Integrated business planning
Integrated Business Planning is a planning process that integrates across two or more functions in a business or government entity referred to as an enterprise to maximize financial value.
The specific functional areas in a company as well as the industry domain associated with the company defines the specific type of IBP process. Examples of IBP processes are:
->Sales and Operations Planning
->Strategic Corporate Performance Management
->Planning and scheduling across multiple plants in a factory
The key requirement for IBP is that two or more functional process areas must be involved and maximizing (optimizing) of financial value should be done.
Corporate executives, business unit heads and planning managers use IBP to evaluate plans and activities based on the economic impact of each consideration.
Bridging Corporate Performance Management and S&OP There has been a lot of focus on Integrated Business Planning in the context of Sales and Operations Planning. Gartner (www.gartner.com) refers to a 5-stage S&OP Maturity model wherein IBP is referred to as the Phased 4 & 5.
Integrated Business Planning however is more broader than S&OP. It is an approach that that combine enterprise performance management (EPM) and sales and operations planning (S&OP) to provide incremental capabilities that neither provides individually. In so doing, IBP platforms address long-standing challenges that financial and operational professionals have struggled to overcome. The result: opportunities for step change improvements to how manufacturers plan, manage and govern their business.
As illustrated right, planning is integrated across the enterprise, which enables decision makers to identify the activities that deliver the greatest financial impact across the company.
Companies use IBP to translate insight into financial impact by providing analyses such as:
- Identification of top financial (profit) drivers
- Answers to "what-if" questions
- Optimization to any variable or ratio, including balance sheet, profitability, NPV, cash flow, etc.
- Intelligent sensitivity analysis
- Modeling infeasibilities
- Understanding of unique performance driver relationships
- Opportunity costs and marginal economic value
IBP transforms planning into a decisive competitive advantage by:
- Providing an integrated planning platform across marketing, operations and finance
- Generating a holistic understanding of performance drivers
- Quantifying the financial impact and interdependencies across planning alternatives
- Optimizing strategic planning and resource allocation
- Balancing sales and operations planning for profitability
- Quantifying financial risk
- Increasing business flexibility
IBP has been used to model and integrate the planning efforts in a number of applications, including:
- Product profitability
- Customer profitability
- Capital expenditures
- Manufacturing operations
- Supply chain
- Business processes (human and information-based)
- Business policy
- Market demand curves
- Competitive strategy
- https://www.gartner.com/doc/2587021/introducing-fivestage-sales-operations-planning. Missing or empty
- "IBP Industry Week cite web".
|Wikimedia Commons has media related to Integrated Business Planning.|