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How Integrated Business Planning Minimizes Fires

by Vanguard Software

It happens every day in business. A company meets demand, puts out a “fire” or urgent problem that occurred in a department, and later they discuss it over drinks after work or in their next morning meeting. While they’re likely experts at putting out fires efficiently and being a reactionary organization, a greater concern is the business may not have adequate integrated business planning (IBP) software and/or processes in place to reduce the risk of those fires starting in the first place and being more proactive.

With proper IBP, companies can avoid urgent requests and the rush to assemble more manpower. They can also reduce accidents, improve safety, and ensure smoother operations and the allocation of resources.  They become an organization that anticipates future demands versus reacting to them.

Why companies struggle with strategic planning

Gartner defines IBP as a means to fill the “planning gap” and yet many businesses struggle with strategic planning. Instead of driving decisions based on determining factors like sales, new products, demand, and customer history, they have what Industry Week refers to as “fragmented strands of strategic, financial, and operational planning and performance management.” The key to optimizing financial returns rests with the businesses willing to implement changes with IBP software.

IBP is a best practice model that takes a common sense approach to align people, resources, equipment, and revenue. It eliminates unplanned events (like all those fires managers have to put out), reduces failures in business processes, incorporates automation, and integrates technology into all business processes. Put more bluntly, when departments aren’t integrated, they’re fragmented and work too much on crisis management and become reactive instead of working together proactively.

Benefits of integrated business planning

For businesses unsure about IBP, it’s different from standards and operating procedures (S&OP) in that it aligns all of the functions in a business that might include logistics, operations, finance, sales, and marketing, into one cohesive plan to maximize financial value. It also fixes the gaps that can occur when departments run separately.

IBP benefits businesses in the following ways:

  • Explores current market trends: From metrics and scorecards to specific budgeting processes and models that integrate with technology and machine learning, IBP includes advanced analytical capabilities that can help busy supply chains maintain a competitive edge in a tech-savvy industry.
  • Assists with benchmarking: By weighing current metrics and assessing costs, IBP helps weigh performance against competitors to equip businesses with key insights for advanced decision making.
  • Considers best practices: IBP addresses whether the right people are in place for future decision making by looking at staffing and accountability as well as disciplines and employee skill sets.
  • Provides the most advanced technology features: From alternate sourcing locations to evaluating capacity and feasibility plans, to compete with larger supply chains, IBP provides enhanced technology that’s best-in-class and can maximize all aspects of a busy supply chain from warehouses to shipping and transportation needs.
  • Provides strategic planning processes: IBP helps maximize efficiencies by targeting clear goals and objectives, optimizing business options, identifying imbalances and gaps, and ensuring the best reporting. This includes “what if” planning and least-cost scenarios.

For businesses to succeed with IBP, they will need to drive their end-to-end decision making to optimize financial returns. Some businesses will include demand planning software and demand forecasting software with their supply chain software for help with forecasting and analysis.

Businesses that transition to IBP software solutions will have the tools they need to reconcile supply and demand and optimize their business plans for future success.

About Vanguard Software
Vanguard Software introduced its first product for decision support analysis in 1995. Today, companies across every major industry and more than 60 countries rely on the Vanguard Predictive Planning platform. Vanguard Software is based in Cary, North Carolina.

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