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Leverage Data to Move From Silos to Whole System Planning

Move beyond S&OP to integrated business planning.

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  • Existing technological solutions fail to enable new processes and reduce the acceptance of change management.
  • Siloed data is not easily accessible and transformed for use across the organization.
  • A lack of awareness on how integrated data can be better used within business processes and decision-making.

Our Advice

Critical Insight

Integrated business planning provides a holistic view of the organization’s financial, buying, and inventory strategy and, when underpinned by a solid data strategy and systems that support the process, allows for impactful cross-department collaboration through efficient and informed decision-making from forecasting to production planning and inventory management.

Impact and Result

  • Clarify your business capabilities and value proposition.
  • Identify how your data capabilities align and support your organizational goals.
  • Develop an incremental technological and process implementation plan
  • Share the IT strategic vision to replace systems and regularly engage with business leaders.

Leverage Data to Move From Silos to Whole System Planning Research & Tools

1. Leverage Data to Move From Silos to Whole System Planning Deck – This research provides insight into an implementing IBP process and helps CIOs optimize their organization’s efforts in implementing change.

This research provides insight into the function of IBP and how CIOs can support their organizations in implementing an integrated business planning (IBP) process.

2. IBP Maturity Assessment – A tool to help CIOs understand how aligned the organization is on people, process, and technology in relation to supporting a successful IBP implementation.

The IBP Maturity Assessment helps you determine your maturity level for implementing IBP.

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Move beyond S&OP to integrated business planning.

Analyst perspective

A successful integrated business planning (IBP) implementation begins with an IT strategy.

Integrated planning provides organizations with a unified approach to decision-making. Organizations have a variety of integrated planning approaches to utilize to build out a unified planning organization where each approach has varying degrees of maturity, complexity, and value to add to the organization. The key factor that underlies each type of integrated planning approach is the data that supports the process.

The integrated planning approach this research will be focusing on is integrated business planning (IBP), which is an evolution of sales and operations (S&OP) and how organizations align their strategic and operational goals. IBP breaks down silos and provides a holistic approach to planning and decision-making, enhancing the agility and responsiveness of the organization. As businesses face increasing volatility and competition in the marketplace, the adoption of IBP is not only beneficial but essential to maintaining a competitive advantage.

Successful IBP implementations require a committed executive sponsor, a robust technology foundation with a focus on data, to shift the business to a data-driven, collaborative decision-making organization. Organizations that plan and invest in integrated tools that provide data visibility across the business will see the best success.

Donnafay MacDonald

Donnafay MacDonald
Research Director, Retail
Info-Tech Research Group

Executive summary

Your Challenge

Common Obstacles

Info-Tech’s Approach

IBP process is being implemented to better align the business strategy across the organization and IT is in the unique position to support the process change. Challenges include:

  • Existing technological solutions fail to enable new processes and reduce the acceptance of change management.
  • Siloed data is not easily accessible and transformed for use across the organization.
  • A lack of awareness on how integrated data can be better used within business processes and decision-making.

To be successful when partnering with the business, CIOs must understand that failures can happen due to the following:

  • Reluctance of the business teams to adopt new technology.
  • Departments that use similar but different data to make key business decisions and are reluctant to see there is a better way.
  • Real and perceived disruptions to existing workflows.
  • Clarify your business capabilities and value proposition.
  • Identify how your data capabilities align and support your organizational goals.
  • Develop an incremental technological and process implementation plan.
  • Share the IT strategic vision to replace systems and regularly engage with business leaders.

Info-Tech Insight

Integrated business planning provides a holistic view of the organization’s financial, buying, and inventory strategy and, when underpinned by a solid data strategy and systems that support the process, allows for impactful cross-department collaboration through efficient and informed decision-making from forecasting to production planning and inventory management.

Sales and operations ecosystems must align to improve decision-making

Sales and operations (S&OP) is a cross-functional monthly planning process that aligns a company’s sales forecast to its operational capabilities. The result of an established S&OP process is an aligned and unified plan that balances demand with supply and results in a more agile and responsive organization. It enables improved demand forecasting, better inventory management, and a clearer understanding of the financial implications of operational decisions.

The image contains a screenshot of a diagram that demonstrates sales and operations.

Technology’s rapid evolution is why S&OP is no longer sufficient

S&OP has been around as a consolidated process since the 1990s and has evolved as new technology emerged. In addition to the evolution of S&OP due to new technology, the recent digital disruptions have added additional pressure on retailers to be operationally efficient and, more than ever, position themselves to expect the unexpected and adapt with speed to stay relevant and competitive.

Consumers are more technologically connected than ever as they shift their buying priorities, driven by price, toward curious consumerism, barrier-breaking product, experiential personalization, and convenience. This new consumer, driven by the impact of inflation, is using technology to cross-shop across retailers in search of best price, where 46% of shoppers are using AI to help them find the best deals (Statista, Sept. 2023).

Retailers must be as efficient as possible in running their business and must look to adapt and elevate their S&OP processes and start working toward more integrated planning processes within their organizations.

The integrated planning processes that enhance the S&OP process include integrated business planning (IBP), demand excellence (DE) and collaborative planning, fulfilment, and replenishment. This research piece will focus on IBP.

The image contains a screenshot of three graphs that demonstrate why S&OP is no longer sufficient.

Sources: Info-Tech, 2023; Statista, Sept. 2023; Statista, 2023.

Integrated business planning (IBP) transforms operations

Sales and operations planning (S&OP) is most likely to come to mind as a strategic planning process over IBP. To put this into perspective, based on a survey completed by APQC, over 64% of respondents are either exploring or using S&OP, whereas 29% are exploring or using IBP as a process. Retailers who use either S&OP or IBP as their main process for aligning the business are seeing better customer benefit outcomes, resulting in improved financial performance; however, there are key differences between IBP and S&OP.

The objective of S&OP is to determine the overall production plan and associated activities, such as capacity planning, scheduling, resourcing, inventory management, supplier coordination, cost management, etc., to effectively meet planned sales targets while achieving the broader business goals of profitability, productivity, and competitive lead times that are part of the overall business objectives.

IBP is a comprehensive business planning process that advances S&OP principles across the entire organization with greater emphasis on integration with business planning and financial forecasting. IBP is a strategic management process that aligns and unifies the organization across functional areas, including product, sales, finance, operations, and marketing. The aim of IBP is to optimize planning, forecasting, and buying activities of an organization through a real-time feedback loop and, unlike traditional planning activities that operate in silos, IBP encourages collaboration through data-driven decision-making by providing a dynamic and holistic view of the business. The integration of financial, product, and operational plans allows companies to quickly respond to market changes and customer demands.

Ultimately, both processes improve transparency across the organization, leading to better alignment and decision-making across the organization. However, IBP is the winner over S&OP due to the significant advantage it delivers to an organization’s bottom-line by allowing it to fully integrate across the business and to better anticipate and respond to market conditions.

The image contains a screenshot of a graph that demonstrates current and planned future use of S&OP and IBP.

Over three out of five companies are currently using or planning to use S&OP, versus less than two out of five companies who use or are planning to use IBP.
Source: SDC Executive, 2023

Evolution to integrated business planning

The image contains a screenshot of the evolution to integrated business planning.

Through the evolution of integrated business planning, the underlying theme is collaboration across the entire organization, where additional data points and functional departments are added to the process of traditional S&OP; the culmination being the present iteration where technology helps organizations link their enterprise resource plans (ERP) to their IBP process.

CIOs are in a unique position to help their organizations adopt IBP and the technology that underpins the process by being a partner to the business, educating and communicating the benefits of IBP, and freeing up budget for technology that supports the IBP process.

“Disconnected plans and strategies breed sub-optimal performance in companies. For more than 30 years, business leaders have used Integrated Business Planning to connect strategy to portfolio, demand, supply, and resulting financial plans. The result: Improved business and financial performance. The foresight to adapt to changing business conditions. Leadership and management teams operating with unity.”

– “Integrated Business Planning,” Oliver Wight, n.d.

Reconcile the differences between S&OP and IBP

Components

Sales & Operation Planning

Integrated Business Planning

Time Horizon

  • Typically short-term, monthly, quarterly
  • Some sophisticated S&OP also include a long-term view
  • Long-term view that ties back to short-term decision-making

Scope

  • Tactical, operational plans
  • Alignment between supply and demand
  • Integrated across all areas of the organization through data from product, strategic, financial, and operational plans

Objectives

  • Balance and optimize inventory to demand
  • Production capacity planning
  • Operational plans align with strategic goals
  • Ties back to business performance, profitability, and growth
  • Scenario planning

Ownership

  • Supply chain
  • Sponsored by executive team & driven by Commercial and/or Finance

Collaboration

  • Siloed decision-making
  • No aggregation back to financial/strategic plans
  • Cross-functional collaboration
  • Comprehensive view of the business with integration with finance

Tools & Technology

  • Fragmented software platforms across the organization
  • Supply chain management (SCM)
  • Higher use of Excel spreadsheets for:
  • Financial planning
  • Portions of sales & product planning
  • Enterprise resource planning (ERP)
  • Enterprise performance management (EPM)
  • Human resource management (HRMS)
  • Financial planning (FP&A)
  • Customer relationship management (CRM)
  • Business intelligence (BI) tools
  • Integrated software platforms across the organization
    • Supply chain management (SCM)
    • Sales & product planning software
      • Store, product objective setting, sales & demand planning, assortment planning, space planning, inventory management, price & promotion planning, in-season management including allocation & replenishment
    • Enterprise resource planning (ERP)
    • Enterprise performance management (EPM)
      • Human resource management (HRMS)
      • Financial planning (FP&A)
    • Customer relationship management (CRM)
    • Business intelligence (BI) tools

Info-Tech Insight

Integrated business planning is a process that aligns functional teams across the organization, aligning plans and speaking the same language. Sales and operations planning works as siloed functional teams, focused on tactical plans of aligning supply and demand.

Representation of the key components underpinning IBP

IBP is a holistic business planning process that aligns business objectives across functional areas. The term IBP was coined by Oliver Wight in 2005 and has been around for years. Its purpose is to break down functional siloes across the organization through a collaborative process of decision-making and information sharing. The outcome of a successful IBP implementation is a nimble organization that can anticipate, rapidly respond, and optimize their operations, maximizing profits while minimizing risk.

Ensuring alignment in the implementation, planning, and execution of an IBP process within an organization involves the following elements where critical factors include a strong executive sponsor and cross-functional collaboration that is predicated on robust data and analytics capabilities:

The image contains a screenshot of the key components.

The ultimate goal of IBP is to create a cohesive, integrated, and agile planning environment that improves the financial performance of an organization while maintaining a level of quality and excellence expected by its customers.

Underpinning IBP success is the consolidation of data

At its core, IBP compels the consolidation of data from multiple sources, and it is here that IT leaders can help transform and support their organizations’ change management toward improved planning by aligning data governance with business strategy, employing master data management best practices, and defining a data practice that moves the organization toward an autonomous enterprise.

The image contains a screenshot of a diagram that demonstrates consolidation of data.

Working with data brings big rewards along with challenges. Only seven percent of businesses are set to fully utilize the data available to them due to a lack of data competence within the organization.

Source: Statista, Feb. 2024

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Donnafay
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About Info-Tech

Info-Tech Research Group is the world’s fastest-growing information technology research and advisory company, proudly serving over 30,000 IT professionals.

We produce unbiased and highly relevant research to help CIOs and IT leaders make strategic, timely, and well-informed decisions. We partner closely with IT teams to provide everything they need, from actionable tools to analyst guidance, ensuring they deliver measurable results for their organizations.

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Author

Donnafay MacDonald

Contributors

4 anonymous company contributors

Search Code: 106497
Last Revised: January 6, 2025

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