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What is integrated business planning (IBP)?

Could integrated business planning (IBP) help your departments to act in a more unified way — and enable your organization to make wiser planning decisions based on better insights? It's worth asking the question: "What is IBP?" and exploring its potential advantages.

In 2021, Gartner examined figures that confirm what many business leaders know already from painful personal experience: 83% of strategies can fail due to faulty assumptions and 67% of key functions are not aligned with business unit and corporate strategies.

Gartner didn't pull its punches either: "History is littered with examples of organizations that hit severe growth stalls because of strategies based on flawed assumptions about customers, competitors or internal capabilities,".

At the business planning stage, companies often struggle because different teams have conflicting cultures, goals, and poor data. Planning can be hampered because it relies on manual processes and inflexible tools that inhibit collaboration across units.

A disconnect appears between strategy and operational activities. Units can focus on their own objectives rather than the company's goals. What might start out as a fresh, bright vision for the future in the boardroom becomes dogged by misalignment, errors, and inconsistencies at the planning level — ultimately becoming mired in confusion and frustration.

This can be a problem at the best of times. But effective planning becomes even more challenging during uncertain periods, as such pandemics, lockdowns, and supply chains issues.

What is IBP?

What is integrated business planning? It’s an approach that aims to seamlessly align strategic plans, business goals, and financial targets with operational plans and decisions across the entire business. As a result, you can see the relationships between resources, actions, and results. For example, you can connect sales, operational, and financial plans — and see the impact on the financial bottom line. But that's just the start when it comes to the IBP benefits available.

So where do you start? Well, because IBP is "integrated" by definition, organizations cannot have data trapped inside departmental silos. There needs to be a single source of truth, available to all. This requires a single, common data basis for planning as well as reporting, analysis, and consolidation. From here, a planning model can flexibly integrate all sub-plans — such as sales, production, and HR — right through to financial results.

In addition, organizations should have clear roles and processes for how each unit can use integrated business planning, so everyone can work together successfully. And this relies on having the right tools.

What is IBP software?

IBP tools must be easy to use so teams are able to achieve quick results through collaboration and execution. Because IBP is cross-functional, you need simple and immediate access for teams — and so a flexible, cloud-based, central platform is the logical answer.

The integrated business planning solution you choose must be flexible too, allowing for opportunities to adapt, grow, and develop in the way you manage your business planning. For example, the real-time analytics you handle should also allow you to run “what-if” scenarios, so you can make informed business decisions — and stay one step ahead of any market changes that are set to emerge.

You may be wondering: What is integrated business planning's value to the enterprise? Here are five IBP benefits within reach:

1. You can deliver on your overall company mission

IBP builds the framework for true integration and a unified approach. It can cover all your organization’s financial planning needs. This can include planning cash flow, managing operational budgets, or forecasting your sales, costs, and revenue.

Now all your stakeholders can understand their role in achieving the goals of your company's mission. There's full alignment between strategic goals and operational activities — with a common platform and key performance indicators behind everything you do, thanks to integrated business planning.

2. Everyone has visibility and accountability

IBP is a great way to help overcome cultural, departmental barriers — where data may be  withheld and outcomes obscured. Departments can now see where they fit in the overall picture and their contribution and impact on agreed plans by using integrated business planning.

With one shared view of data, you can finally get transparency over the relationship between outputs from different departments — and how these contribute to your overall goals, including in areas such as profitability and efficiency.

3. Better decisions create greater agility

The more data and insights available to your IBP system, the better your projections and decisions. Now these have a structural base that's informed by data coming from all areas of the business, which will in turn lead to significant IBP benefits.

But these decisions aren't just at the high level. Integrated business planning helps to support workflow management, so teams across departments can take the right actions at the right time. As a result, the organization can react faster to new challenges and opportunities in a host of areas, from ironing out snags in production to finding new ways to enhance the customer experience.

4. You can forecast with confidence

Previously, business forecasts could be tilted towards the expectations of one department or another. Alternatively, you may have struggled to form a realistic picture when the source information was so fragmented.

However, the "one version of the truth" advantage of integrated business planning helps you to plan, manage and mitigate risks more effectively, while also identifying new opportunities as they arise. You can be proactive and stay ahead of competitors by basing your decisions on trustworthy assumptions and reliable what if scenarios.

5. You can switch resources to value-added tasks

Before adopting an IBP approach, many organizations may devote huge amounts of time and money to manual methods of pulling plans together — and then restarting the process when they fail.

But with integrated business planning, instead of endlessly debating objectives, everyone is on the same page. There's true alignment between strategic goals, operational activities, and financial results.

IBP makes it easier to gather data, create reports, and make them accessible to all — for action. As a result, resources within teams can be devoted to areas that give their organizations the edge. These IBP benefits can include faster planning and budgeting, scenario simulations, and rapid risk assessments.

What is IBP to me?

Specialist software solutions are essential in today's business world of rapid change — where organizations need to work as one. It's essential to find a planning solution that meets your requirements in terms of your technical, functional, and organizational elements.

Today you can drive success by harnessing the power of fully aligned teams and Unit4’s intelligent Financial Planning & Analysis (FP&A) software. You can experience integrated business planning at its best and experience the full range of IBP benefits.

Our solutions are cloud-based, powerful, and intuitive. They combine automated, AI-infused financial planning and analysis, budget management, and financial forecasting with highly interactive dashboards and powerful, pre-configured models. This is what today's agile enterprises need to thrive.

Take the next step with Unit4

If you can see the value of integrated business planning and the significant IBP benefits, then take a look at Unit4's FP&A software. Our solutions can give your teams better and faster ways to achieve smarter planning, budgeting and forecasting, reporting, visualization, scenario planning and analytics.

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