Integrated business planning
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Integrated business planning (IBP) refers to the technologies, applications and processes of connecting the planning function across the enterprise to improve organizational alignment and financial performance.
IBP represents an abstract model of the company in order to link strategic planning and operational planning with financial planning. The process that achieves this is called SiMPLE ( Smart Integrated Market-driven PLanning & Execution).
Corporate executives, business unit heads and planning managers use IBP to evaluate plans and activities based on the economic impact of each consideration.
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
- Aguilar, Omar (2003). "How strategic performance management is helping companies create business value". Strategic Finance 84.7. p. 44.
- Payne, T. "Integrated business planning fills the gap between strategic planning and S&OP. Gartner, Inc." (2008).
- Smith, Larry, Joseph C. Andraski, and Stanley E. Fawcett (2010). "Integrated business planning: a roadmap to linking S&OP and CPFR". The Journal of Business Forecasting 29.4: 4.
- Cubeplan, an IBP tool
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