In my previous blog post, I discussed how an integrated performance framework is essential for Finance and Operations to operate cross functionally. The next step is to implement a technology solution that supports and enhances this framework. In this blog post, I’ll address the considerations that businesses should be aware of when looking for technology to support their IBP process.
An obvious choice, but not always the best option, is to opt for a Corporate Performance Management (CPM) platform. The warning here is that ‘CPM speak’ immediately off sides the operational stakeholders. The word ‘corporate’ also points to certain conventional technologies, which leave other necessary IBP considerations as parallel silos. If a business does go down this route, the CPM product must be proven across the operational and strategic use cases, and it must appeal to their broad audience. Although some vendors claim their CPM products are IBP friendly, they may not be sufficiently sophisticated or advanced.
What IBP support technology should be able to do:
- Model future performance based on multiple scenarios in real-time, top down and bottom up.
- Integrate with key applications, including Sales and Operation Planning, Demand, Supply Chain Management, HR, Finance, Marketing, and IT.
- Integrate people, processes and data across the wider value chain.
- Provide senior managers and other relevant stakeholders with complete visibility over performance, plans and forecasts.
- Provide process managers and other relevant stakeholders with complete visibility over IBP process performance and tracking.
- Support collaboration through business cases, commentary, notation, workflows, alerts, and task tracking.
- Provide integrated context driven business intelligence, decision support and analytics.
- Meet the many users’ needs in a common integrated logical platform, driving adoption, acceptance, and a return on investment for each type of user.
- Potentially bridge functional gaps in key applications. For example, deliver demand planning or financial budgeting, as opposed to requiring other investments as sources for IBP.
- Minimise risk and reliance on office tools, such as spreadsheets.
- Work across systems as they come and go in a complex environment, as opposed to being tied exclusively to a single core system.
- Have a governance model that addresses the complexities of the enterprise structure.
Many organisations will naturally have applications in place servicing the discrete areas that IBP is dependent on. These will be at various stages of maturity. However, investments may still be necessary.
Often I hear people say “I have a Demand Planning application” or “We have a budgeting tool”. Firstly, these assets can remain part of the IBP landscape, but they are often not capable of scaling to meet the wider IBP requirement. Many ERP applications or modules operate within the planning time fence. They don’t have the flexibility to model scenarios beyond lead times, do top down simulations to assess vulnerabilities and opportunities, and financialise the results. Nor can many handle the cross-functional process and collaborative requirements.
The rewards for choosing a technology that is sophisticated enough to cope with the requirements needed for IBP are therefore high. According to Aberdeen Group Research, top performing businesses deliver budgets two weeks faster than average and have more time to spend on analysis, because they are freed up from tedious data gathering.
Contact Professional Advantage for help implementing the right platform. We offer proven, enterprise-grade, software products with a strong history of IBP success, that can report, analyse, simulate, scorecard, dashboard, plan, budget, forecast, and model.