Building resilience and agility with integrated business planning
Business disruption is a fact of life, but it doesn’t have to spell disaster. By following a structured, integrated business planning process across the organisation, companies can put in place robust processes, supported by technologies, that let them anticipate and mitigate impacts of disruptive events, writes Oliver Wight partner Mike Snape.
Severe events with widespread and often global consequences, known as “black swan” events, can take companies by surprise. Natural disasters, financial crises, the introduction of new legislation, technology and supply chain disruption, or healthcare emergencies such as Covid-19 can result in far-reaching impacts for organisations in every sector.
If there’s one thing that the Covid-19 “black swan” has taught leaders of organisations of all sizes, it’s that business agility is key for resilience and growth.
The ability to adapt efficiently, cost effectively and quickly, and the ability to meet changing customer expectations, have become mantras for success and future viability.
Integrated business planning
By running an integrated business planning (IBP) process, organisations can gain the agility to process data quickly and make smart and informed decisions. In this way, they can move fast to adapt and disrupt changing markets.
Successfully adopting integrated business planning requires three key elements:
Reliable processes
Centralised, standardised, and integrated processes across all business units and functions enable streamlined workflows and help employees work more efficiently and collaboratively. Meanwhile, having a unified, process-driven approach helps improve visibility across operations, so planners can quickly access the information needed to support data-driven decision-making.
Capable technology
Advanced enterprise software supports digitalised and automated processes that enable employees to carry out day-to-day tasks efficiently. Furthermore, by establishing a single source of truth across the organisation, companies can run enterprise-wide reports in real time.
The right behaviour
Comprehensive, integrated processes guide employees’ behaviour so they are working as efficiently as possible – in compliance with key requirements for each task – while enabling tracking, monitoring, and reporting on core KPIs.
However, if processes are disjointed and unreliable, people invent their own ways of working with silo-focused KPIs and success definitions. This behaviour results in a proliferation of spreadsheet-based management systems, creating data silos that can make reporting a challenge.
Reaping the rewards
Integrated business planning supports a wide range of capabilities that enable organisations to become more efficient at detecting and proactively adjusting to changing markets. In this way, they can:
Look further into the future
Scenario modelling lets planners explore the options in the case of potential disruptions, such as a delay in the delivery of a raw material or what would happen if VAT changes in a particular market. By running a wide range of scenarios across the organisation, companies can anticipate the impacts on their ability to meet demand and the load on the supply chain as well as any financial consequences.
Then, companies can identify specific vulnerabilities or emerging opportunities and take appropriate decisions to prepare for them.
Furthermore, extending the planning horizon beyond the next year is also critical if businesses are to track and respond proactively to changing markets. A planning horizon of at least 36 months enables companies to constantly align themselves to developing market requirements and detect new trends that may affect specific product development requirements or peaks in demand.
Spend time on analysis, not data collection
Unified data management eliminates the need to manually compile reports from multiple sources. Furthermore, with robust processes supported by advanced technological capabilities in place, employees have the time to run scenarios and carry out analysis rather than collecting and collating data.
Intelligent AI and machine learning analytics help ensure easy access to meaningful insights, meaning that planning executives can focus on business critical decision-making.
Make data-driven decisions based on the latest information
Too often, strategy is determined on gut feel rather than in-depth analysis of the market. Where decision-making is based on data, yearly budgeting practices can mean that information is out of date.
By shifting to a rolling financial forecast, companies can help ensure that decisions are made based on the very latest data driven predictions. In this way, planners are not simply making decisions based on historical data but are instead navigating their way forward using the very latest insights into market trends and opportunities. Meanwhile, constant re-evaluation of market conditions enables businesses to pivot quickly and change direction if circumstances change.
