Question A division in my company is wanting to take several sets of high-level plans and forge an integrated plan from them. The integrated plan will be used to drive a number of projects forward. I would like to know: what should the high-level plans contain to ensure we have the right information to start with? What are the inputs, processes and deliverables used to create an itegrated plan? How do we measure the quality/value of the integrated plan? Please recommend any books you think useful. Much thanks.
Answer PETER,
IBP is an useful tool overall and has a lot of positive benefits.
The only factor to take care of ---RISK MONITORING AND
RISK MANAGEMENT of all the individual units.
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 accurately represents a holistic model of the company in order to link strategic planning and operational planning with financial planning. By deploying a single model across the enterprise and leveraging the organization’s information assets, corporate executives, business unit heads and planning managers use IBP to evaluate plans and activities based on the true economic impact of each consideration.
Planning is integrated across the enterprise, which enables decision makers to identify the activities that deliver the greatest financial impact across the company.
Recent developments and successes in the areas of business intelligence and performance management are accelerating the adoption of integrated business planning. While IBP has been a vision for many years; the technology required for modeling, optimization and scaling was non-existent.
In broad terms, the use of mathematical representations and extensive knowledge bases enable users to build the massive, multivariable models required for Integrated Business Planning.
Analyses
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
- Simulation
- 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
Benefits
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 Applications
IBP has been used to successfully 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
BUSINESS OBJECTIVE
Not simply about matching demand and meeting customer needs. Considers several plan alternatives and chooses one that best represents the business drivers. Objective is revenue and profit
PROCESS USED
Process is more rules and exception based
TECHNOLOGY
Technology enables the processes through workflows
FREQUENCY
Monthly and by exceptions
FOCUS
Collaborative and outward focused
IBP is the strategic modeling the strategic planning and consistency framework that unifies the plans across business functions and integrates those plans to the corporate key performance indicators. One of its key outputs is to convert the strategic plans into meaningful financial plans that show the impact of the high-level strategies on the key financial reports of the organization. IBP, therefore, has a very strong connection into the company's CPM strategy and processes. The S&OP process sits under the IBP layer and connects the integrated, and financially validated, strategic plans (an output of the IBP process) with the operational plans at the functional/business operations level in the company. Having these three process layers (CPM, IBP and S&OP) in place provides an integrated top-down and bottom-up performance management and planning environment that will significantly improve the overall supply chain performance of an enterprise through shared metrics, strategic what-ifs, evaluations and alignment, and integrated operational planning.
"Integrated Business Planning will enable companies to model and align business strategies, ensuring significantly improved supply chain and business performance.
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ONE MAJOR PROBLEM AREA IS THE RISK MONITORING
AND MANAGEMENT.
SOME UNITS MAY NEED CLOSE WATCH ON THE PERFORMANCE
AS COMPARED TO OTHERS.
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BOOKS
1.DEMAND MANAGEMENT BEST PRACTICES.
[integrated business management]
by
COLLEN CRUM AND GEORGE E. PALMATIER
--------------------------------
2.TOTAL INTEGRATED ENTERPRISE
BY
THOMAS E MILLER AND DARYLE .W .BERGER
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HERE ARE SOME USEFUL CASE STUDIES.
www.cornwall.nhs.uk/CornwallPartnershipTrust/TheTrust/Integrated_Business_Plan.aspx
www.whnt.nhs.uk/document_uploads/Foundation%20Trust/MAINWHNTIBP0712.pdf -
www.medway.nhs.uk/Foundation_Trust_/Integrated_business_plan/index.html - 16k
www.slb.com/content/services/resources/casestudies/software/merak_zadco.asp - 38k
