In fact, these traits today even translate to the customer — according to McKinsey, agile organizations can improve the customer experience by up to 30%.
Integrated business planning (IBP) has emerged as a best practice for enterprises to achieve this level of agility while effectively managing all of their moving parts — human, technological, and otherwise.
Read on to learn more about what integrated business planning really means, its benefits, and 4 keys to successful implementation.
- Integrated business planning (IBP) connects data and strategies from operations, finance, and business strategy functions.
- IBP has foundations in traditional sales and operations planning (S&OP).
- Benefits of integrated business planning include greater alignment, central visibility, and real-time insights.
- Buy-in and commitment is required from executive-level leadership to implement IBP.
- Choosing the right team and technologies are essential to IBP success.
What is IBP?
Integrated business planning (IBP) is the process of linking data and strategies across the entire value chain to maximize company-wide performance. IBP includes operations, finance, and business strategy functions and takes a holistic approach to organizational planning that levels up key KPI results over the long term.
Integrated business planning is considered to be an extension of traditional Sales & Operations Planning (S&OP). It embraces many of the principles, such as simplified processes, an emphasis on culture, and an analytical approach. S&OP is considered by many experts to be a necessary precursor to achieving true IBP.
Integrated business planning encompasses the entire organization to create an end-to-end view of how companies are operating and earning revenue. It utilizes data analytics and sophisticated business technology tools to achieve a centralized, single source of truth that establishes high levels of visibility, transparency, and accountability.
Ultimately, IBP creates organizations that are more flexible, agile, proactive, and data-informed. Let’s take a deeper look at 5 key benefits you can experience from integrated business planning.
Benefits of Integrated Business Planning
Integrated business planning creates better alignment across your core teams and business functions. This happens through collaborative strategy and goal setting at the leadership level. It’s also facilitated by the ability to view data from across the organization, creating a better understanding at every level of how each function contributes to larger business objectives.
Central visibility as it relates to integrated business planning means a single source of data truth — one that is captured on a centralized platform or dashboard viewable to employees across the organization. Central visibility enables better decision making that’s informed by knowledge of how decisions make an impact beyond its own silo. It also allows for greater insight into potential issues that may arise, and higher accountability overall across teams.
Real-time data insights achieved through effective integrated business planning facilitates several important capabilities. It allows for more precise resource planning and allocation that can easily be adjusted as needed. Finance teams can use real-time insights to make more accurate and adaptive revenue forecasts, and in turn teams can plan with better budgeting and spending strategies.
Integrated business planning helps leaders build an organization-wide innovative culture — an essential for staying competitive in today’s fast-moving business environment. With IBP, innovation becomes possible because employees are informed by insights. Not only can they see progress toward goals, they can recognize new growth opportunities and identify problems that need resolution.
Shared goals made possible by integrated business planning also encourages collaboration, a key driver of innovation in business settings. Today, nearly 60% of market-leading CEOs say they’re not just pursuing incremental improvements — they want to achieve true disruptive innovation. IBP can be the key to unlocking that potential.
The hallmark of integrated business planning is its inclusion of end-to-end company data. As a result, analytics are more sophisticated and take into account more contributing factors than is possible with traditional and/or manual methods. IBP is powered by technology tools built with AI and machine-learning capabilities that transform data analytics into actionable insights.
4 Keys to Successful Integrated Business Planning
Get leadership buy-in
Integrated business planning begins at the highest levels of the organization. During the launch of a new IBP strategy and even after implementation, clear and effective governance is essential to success. Buy-in and commitment is required from executives at your organization (CEO, COO, CFO, and CIO all included).
Develop a documented strategy
By nature, integrated business planning maintains a range of moving parts (including human, product, and technology resources). As such, it’s best practice to have a documented plan that leaves no question open about execution steps. Not only does a documented plan keep everyone accountable, but sharing it can encourage unification and serve as a guide to all who play a role in its success.
Set clear goals
Integrated business planning puts a heavy emphasis on key KPIs. These KPIs of course vary by function — for example, length of sales cycle may be a key metric for your sales team while product development is looking to shorten time to market. Some KPIs are important to multiple teams within your organization (like revenue) and those teams each have their own role to play in achieving it.
Setting goals at both the team and organizational level keeps larger objectives top-of-mind while maintaining clarity around the individual KPIs that must be achieved to get there.
Build the right team
Integrated business planning succeeds when the people driving it are equipped with the right skills and experience. Build your team intentionally — both by choosing the right people internally and hiring the right people when needed — to lead and execute your IBP strategy with confidence.
Choose the right technology tools
Technology is a requirement for implementing an IBP strategy at scale. The right software platform not only centralizes your data, it has the capability to integrate other systems, migrate legacy data, and provide the centralized visibility you need. An important step, then, is to evaluate and choose technology tools that both have IBP capabilities and are the right fit for your organization.
RevOps as an IBP building block
We know that S&OP is considered a key prerequisite for integrated business planning. But what about RevOps? After all, finance is one of the additional functions encompassed under IBP, and revenue is one of your most important KPIs.
With a strong RevOps foundation in place, you can ready your finance teams and leaders to make an on-going, high-value contribution to your new IBP strategy.
Xactly offers a set of solutions that can revolutionize your revenue operations and transform your growth capabilities. Schedule your demo today to learn more!