Integrated Business Planning at the Speed of Light: Three Fundamentals
The pace of business change is greater than most of our abilities to understand and react to it. Managers are expected to respond immediately with live data, but often lack the tools to do so. Here are three fundamentals that can help improve your Integrated Business Planning (IBP) processes and improve your bottom-line.
For those of you who were in the workforce when fax machines and voicemail came of age, think back to what this meant to your communications – and integrated business planning – capabilities. Up to then, decisions were made based on communications sent by “snail-mail”, with several days of lag time, or information gathered in face-to-face meetings. Or, key information was shared by telephone, which too often devolved into dreaded “phone-tag” territory – minus the benefit of voicemail.
Nowadays, it is unthinkable to imagine planning your personal or work life with hours or even days of lag time between each individual communication. As an example, just try planning a trip without the internet!
There is no doubt that improved communications capabilities have impacted all facets of personal and business life, and we suspect most would see those impacts as positive ones. But, they have also presented management challenges. Today, managers like you are expected to respond virtually instantly to questions and changing business situations. You are expected to put forward-looking operations and/or sales plans in place to pursue new opportunities while side-stepping unforeseen risk events. And you’re expected to be able to base your decisions on your enterprise’s “live” data – data points that now involve more products and customers and a greater breadth of competitors than ever before. This means that the range of possible solutions, or ‘answers,’ to a given business planning problem is exponentially greater than it was for generations past.
That’s where improving your Integrated Business Planning processes can help. Following the three fundamentals listed below can go a long way towards helping fine-tune your decision-making process and improve your bottom-line in today’s increasingly demanding business environment.
FUNDAMENTAL #1: Data Connectivity
A fundamental requirement of integrated business planning is using a connected platform that allows optimal data integration. Gone should be the days of tracking intricate data and decision points on hundreds, if not thousands, of worksheets.
Today’s speed-of-light communications capabilities means that there is simply no excuse to not take advantage of tools designed to make your job easier…all while making you more agile when it comes to decision-making. Imagine how much better your productivity (and peace of mind) could be if you could access virtually countless alternatives on a live basis? Cloud-based business planning solutions like Anaplan (https://www.anaplan.com) - which we happen to use to run our own business - deliver the power to combine disparate types of data such as sales, foreign exchange rates, and costs & prices…and even rule-sets to help identify constraints or preferences. Regardless of whether you are in a Financial Planning function or looking to implement Activity Based Costing, data connectivity gives you the ability to test drive different scenarios to help you determine your best plans of action.
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FUNDAMENTAL #2: Immediate Access to Relevant Live Data
A second requirement is to understand and define which types of data must be live and which ones can be older or averaged.
For example, some companies operate on such a time-sensitive basis that knowing exactly where goods are at a moment in time is critical knowledge; others, such as airlines, are dependent on live weather and booking information (notwithstanding the fact that most airlines are quite happy to sell the same seat twice). Therefore, this type of information must be available to all users on a live, or near-live basis; relying on day old, or even hours old data, may be useless or even potentially damaging.
On the other hand, most manufacturers likely do not make global procurement decisions based on hourly or even daily fluctuations in foreign exchange rates, and therefore a weekly or monthly average forecast is likely sufficient.
It’s also important to recognize that having live updates of a particular piece of data can be critical knowledge to one part of a business while weekly or monthly averages are quite adequate for other parts of that same business. For example, an investment advisory firm might require live foreign exchange rate information in order to buy or sell foreign equities, but a monthly average is all that is needed to report account values to clients.
Immediate access to live data, where it is needed, helps you fine-tune or pivot your business planning with confidence.
FUNDAMENTAL #3: Real-time Collaboration with Those “Closest to the Action”
Responsibility for capturing “live” data must be diffused across the organization and put in the hands of those closest to the action, be it sales representatives, production schedulers, or service center managers. Many cloud-based solutions like Anaplan provide this functionality in very user-friendly ways, greatly facilitating the process of maintaining and updating key data.
Once real-time information is captured & validated at the source, it can be shared with other managers and executives, triggering conversations and analyses about the interpretation of the data and actions that might be taken.
Planning at high speed requires the use of an Integrated Business Planning solution – an online, interconnected platform that holds all your organization’s key data, and maintained virtually live. By following our three key fundamentals, you and your management team can better see, assess, and plan for alternative future scenarios, both at the micro level of individual products or customers and in aggregate across business units and geographies.
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