The 80/20 rule in Integrated Business Planning!
The good old 80/20 rule: 20% of what we do produces 80% of our outcomes.
In a business context then, it is critical that the 20% effort is right; that it is properly planned and understood.
Our ERP (Enterprise Resource Planning) solutions are great at providing understanding of actuals. What about the future? How can we effectively and easily generate scenarios to cover uncertainties and quickly see the impact of a changed assumption?
To get that 20% spot on, we need an integrated approach to planning (see IBP – Integrated Business Planning if you are interested), not the traditional siloed approach. In addition to people skills, knowledge and process, to support this planning, particularly to accurately and easily (responsive and quick) forward plan – access scenarios, update assumptions, we need the help of the right enabling technology.
Planning software tools are not a new concept by any means, however in recent years the technology has evolved significantly to support this integrated approach. Adoption is on the rise, up to 58% in 2018 from 30% in 2017 (Dresner Advisory Services). Capability and flexibility exists to support the future looking integrated planning including predictive planning, simulation and analysis of scenarios.
What are some of the business benefits technology brings to the integrated business planning process?
- An intersection of data from different sources, from multiple business systems as well as external sources such as supplier and market data.
- The built-in logic to leverage the power of data and translate it in to actionable insights.
- Empowers decision makers to run different scenarios and develop a Plan B and C.
- Reduce the complexity in the process of integrating plans from multiple business units.
- Give a single aggregated view of performance and planning.
- Improved data integrity.
In a recent interview with Oliver Wight partner Stuart Harman, we discussed the importance of technology in the IBP process.
Are you currently using spreadsheets to support your business planning process? Check out our eBook on ‘9 Reasons why spreadsheet-based planning is risky for your business‘ to see if your process identifies with any of the common pitfalls we come across when planning with spreadsheets.
For more information on Professional Advantage and Integrated Business Planning, click here.