Integrated Business Planning (IBP) is continuing to gain popularity as companies look to find better ways to align their strategic plans with the diverse functions of their organisations. But what exactly is Integrated Business Planning and what impact is the increasing adoption of IBP having on the market for talent?
We talk to Six Degrees Associate Director, Alastair Pennie about IBP and the search for IBP talent…
What is Integrated Business Planning?
Integrated Business Planning (IBP) is a holistic business management process which aims to seamlessly align a company’s strategic plans with its sales plans, operational plans and financial plans while integrating other functions including supply chain, product and customer portfolios and customer demand.
IBP is the industry best practice planning model. It is the extension of Sales and Operations Planning (S&OP) which executive leadership teams have traditionally used to achieve alignment among the diverse functions of an organisation.
What are the benefits of IBP?
Integrated Business Planning offers financial integration and the ability to connect the company’s strategy to its various business plans. IBP includes regular product, demand, supply, reconciliation, and management business reviews and thereby ensures improved decision-making because it is a continuously developing and evolving process.
Led by senior management, IBP helps companies to allocate their resources, including people, equipment, inventory, materials, time and money to most effectively satisfy their customers. According to Oliver Wight, the company that originated Sales and Operations Planning (S&OP), companies that do Integrated Business Planning well are more efficient, more effective, and make more money than those that don't.
The gap between best practice and reality
Despite its increasing popularity, there is still a gap between IBP best practice and reality. While most businesses today have planning processes, very few have true Integrated Business Planning processes – the majority of these are done through extracting data to Excel without the support of the executive leadership team and lacking ‘whole of business’ engagement.
The fast-moving consumer goods (FMCG) sector is leading the way in advanced IBP processes but there are still very few businesses that would be considered by Oliver Wight as “Class A”.
One of the challenges to doing IBP well is that organisations need to be mature enough and ready to deploy IBP to experience the benefits, otherwise the advantages are likely to be short-lived and costly if the organisation reverts back to previous planning processes.
It takes time – at least 12 months – to transform from basic demand planning to full Integrated Business Planning. Furthermore, IBP needs to be driven and owned by the CEO, so if there isn’t support from the executive leadership team, IBP will rarely work.
What impact is IBP having on talent in the market?
As more businesses adopt Integrated Business Planning processes there will be increased demand for planners who have both analytical and stakeholder engagement abilities. This is a tricky combination of skills to find, so clients may need to look beyond traditional sources and change their perception of salary in order to find the right candidates.
Demand and supply planners who have integrated experience and the personality to engage with a sales and marketing audience are already in high demand and the good candidates are being well looked after in their current positions, so the talent pool for quality candidates with the right skills for delivering IBP is slim.
In order to find candidates with the unique mix of skills required to deliver IBP effectively, clients will need to look outside of traditional industry sectors and not be so product focussed. They also need to look at different skills that can fulfil these roles or look to offer more pay. A common perception is that the market rate for a demand planner is $80K + Super but in order to get a good pool of talent who can deliver IBP effectively, this needs to be shifted closer to $100K + Super.
Talk to Alastair Pennie and his team about sourcing Supply Chain Managers, Planning Managers and Demand & Supply Planners for Supply Chain and Procurement in Sydney.
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