Implementing next-generation integrated business planning—the Deloitte perspective
Merging upstream operational and financial planning to deliver integrated business planning (IBP) is hardly a new concept. The joint attractions of allowing managers to make better-informed decisions and enabling the enterprise to become more agile have meant the idea has been much discussed. Traditionally, however, IBP implementations were difficult and prohibitively expensive.
Today, the advent of collaborative planning platforms such as Anaplan means that is no longer the case, and practitioners in consulting organizations like Deloitte have taken advantage of this new technology to build IBP solutions for their clients. Along the way, they have gained considerable practical experience of what constitutes best practices. Bart Hughes, a director in Deloitte’s technology, media, and telecommunications practice, recently took time out to share some of those valuable insights, including:
Integrate the different levels of planning
Although planning in different departments takes place with different frequencies throughout the year and typically involves differing levels of granularity, Bart stressed the importance of using technology to tie together the three different levels of planning: strategic planning, financial and operational planning, and ongoing analysis and corrective actions. For example, when all types of planning are done on a single platform that allows for different time periods and levels of detail, plans and budgets will be better aligned with strategic priorities, organizational alignment will improve, and it will be easier and quicker to do “what-if” analyses.
Incorporate all departmental aspects of planning
Whenever IBP is mentioned, people tend to think about inter-functional planning, (i.e., collaboratively sharing data across business functions). Bart suggested, however, that organizations will compromise their agility unless they also incorporate intra-functional and sub-functional planning, such as territory planning and price and quotation management in a sales organization. It’s things that may have been classified as being “out of scope” in a traditional budgeting implementation and left on a plethora of disconnected spreadsheets. But Bart takes the view that a flexible and easy-to-use platform such as Anaplan provides the much needed “planning glue” that enables these isolated “islands of planning” to be quickly and easily incorporated into the solution.
But first, focus on the key enablers
Before you get too deep into the details, Bart stressed the importance of first addressing what he calls the key enablers: the important aspects of inter-functional planning such as sales planning, revenue planning, and demand planning, which—when connected with core financial processes—make rolling reforecasts quicker, easier, and more accurate. Once these essential links are in place, sub-functional planning needs such as transfer pricing and warranty cost analysis can be built around the central IBP framework.
Bart also stressed that his guidance on best practices is just that—guidance. An organization can choose how to roll out IBP. He explained that as long as you keep the end goal of IBP front and center, it pays to first address the obvious planning gaps that deliver the greatest impact. However, if you decide to adopt such an iterative approach to implementation, Bart emphasized that that selecting a flexible planning platform is crucial to avoid limiting your ability to grow and scale.
For more information on how next-generation integrated business planning can benefit your business and the steps you can take to get there, watch the complete webinar.
Keyword: Integrated Business Planning