There’s never going to be a perfect time to take a more holistic approach to budgeting. The only perfect time is now.
You can’t procrastinate on the financial close. There’s no putting off forecasting. Annual reports cannot, by definition, come out less than once a year. But integrated business planning? That may feel like something that can wait.
To be fair, there may be many organizations that haven’t even heard of integrated business planning, or IBP, or have only heard it referenced vaguely and haven’t taken the time to dive deep into the benefits it can bring. In other cases, though, there may be a tendency to believe that you need to get other ducks in a row first – perhaps a certain level of growth, or having all the right tools – before you can really dive in.
Research The Hackett Group, for example, recently painted a picture of what the ideal IBP-oriented firm might look like – and it may be a far cry from what many finance departments feel reflects their everyday reality.
“Developing integrated planning processes throughout the organization, ensuring that the right people are in place and accountable for the planning execution, and the necessary tools and systems are available to fully support the IBP process are fundamental elements that drive IBP performance,” the Hackett Group said. “When implemented effectively, integrated business planning can support sales growth, reduce costs to serve and improve working capital.”
On the other hand, an article on European Business Review actually suggested that some business leaders take their time with IBP due to external factors. Firms operating in more volatile developing markets, perhaps, might assume they’re not ready. Think again:
“To view Integrated Business Planning as just an enhancement to a business already in a stable, predictable environment is fundamentally wrong. It is not about being in a business environment suitable for IBP, it’s about implementing IBP to create a successful strategic response to existing market conditions, regardless of its volatility.”
So how to get started? The Hackett Group post actually went on to suggest it’s more or less as straightforward as any other business transformation. Start by taking a good, honest look at where integrated planning is definitely not happening across the organization today – and maybe look for the pockets where it’s primed for success. Try things out, tweak them, and then repeat.
Adopting IBP may not make everything perfect in the organization, any more than it takes a perfect organization to explore it in the first place. This is about taking action that gets you at least a little closer to that ideal end state, and recognizing that the time to take that action is now. This means learning about the technologies and best practices that can put your organization on the road to smarter and faster financial decisions based on trusted operational insights.