integrated business planning cycle

What Is Integrated Business Planning and Why Is It Important?

Think of modern integrated business planning, or IBP, as a mashup of supply chain optimization, financial planning and analysis (FP&A) and operational best practices, powered by a companywide culture that’s all about delivering the speed, savings and responsiveness today’s consumers demand while managing risk.

Note that IBP as a fuzzy, buzzword-laden process methodology has been around for years. It’s usually implemented by expensive consultants in sprawling, global corporations that know they need to unify siloed sales, supply, financial and operational resources — before more nimble competitors relegate them to the former Fortune 500 list.

We’re here to argue that IBP deserves a second look for any company that wants to maximize profits and minimize the risks associated with growth. No six-figure consultant required.

What Is Integrated Business Planning?

On paper, IBP is a process for aligning a company’s business goals with its finance, supply chain, product development, marketing and other operational functions. Think parts suppliers that work with automakers and need to constantly retool to accommodate design changes, or food producers operating on razor-thin margins that must manage both uncertain supply chains and fickle customer tastes.

Lag, and a competitor is standing by to take that business. Move quickly but in a disjointed manner and you may keep customers, but at the expense of higher cost of goods sold (COGS) and lower profitability.

For example, consider PickerBots, a fictional maker of custom machinery for manufacturing and warehouse operations. When the company launched in 2017, it found a niche in restaurant supply, but when that business slowed significantly in 2020 the founders decided to retool. Rather than simply changing up its marketing, the firm set out to revamp its business strategy. A top-down scenario planning exercise led to realigning its R&D, demand forecasting, profitability and revenue analysis, supply chain planning and marketing and sales strategy.

The company culture was already strong on innovative thinking, but the founders realized that the link between strategic planning and day-to-day operations could use improvement. Enter a new COO with the chops to align operations with product demand planning and sales and marketing while weighing in on financial targets and budgets.

Key Takeaways

• In a company that embraces IBP, there’s a direct line from purchasing, production and inventory to sales and marketing to financial targets and budgets.
• A key IBP benefit is that materials are bought at the right price, at the right time and in just the right quantity to fulfill market demand.
• Successful IBP delivers closer collaboration and more trust among departments, leading to improved decision-making.
• IBP may require significant cultural change and cannot be successful without unwavering commitment from the executive team.

Integrated Business Planning Explained

Many organizations mistake IBP for a supply-chain-centric exercise. While linking supply chain planning with other departments, from sales and operations through finance, is important, that’s just one element.

IBP aligns business g oals and financial t argets with decisions and execution across the entire business.

There is overlap with financial planning and analysis (FP&A). Because an IBP initiative gathers data from across the enterprise, companies get better at predictive analysis. Now, when purchasing forecasts a parts shortage, supply and operations can adjust before customers are affected.

It’s also not a one-and-done exercise. PickerBots’ new COO advises looking a minimum of 36 months out. Leaders will need to keep their eyes on that long-range plan while continually reviewing, revising and communicating financial and operating results. What supply chain gaps have opened up, and how can we close them? Do we need to update our scenario planning? Are we tracking the right financial KPIs?

A crucial element of IBP is that it integrates financials with operations. Here’s a structure that PickerBots plans to follow.

Why Is Integrated Business Planning Important?

Companies that undertake IBP realize a number of practical benefits, including reduced holding costs, more responsive customer service and demand fulfillment, shorter time to market for new products and an improved correlation between demand planning and fulfillment.

After PickerBot’s scenario planning and strategy session, the company decided to jump into the emerging collaborative robot, or cobot, market. A collaborative robot is designed to safely interact with human workers. PickerBot’s leaders believe demand will increase for “pick and place” cobots with fine motor skills for use on manufacturing lines as well as in agricultural settings.

Now that the company has its strategic direction, the COO wants to focus on three higher-level concepts before delving into more practical areas, like financial planning and analysis and supply chain optimization. That’s because without goal-setting, PickerBots won’t be able to define success.

Alignment and accountability 

All executives must agree on three things: What are our corporate goals? What does success look like for each? How will I and my team contribute and be accountable?

The company’s goals are grouped into four areas: industry-focused, operations and supply chain, financial and marketing and sales. The management team will review all goals to make sure they align with strategy and are both actionable and achievable.

Industry-focused goal: Offer the most innovative cobots on the market

What success looks like: Develop a product that can match or exceed a human worker in its ability to pick fragile crops without damage.

Who will execute: The R&D team

Financial goal: Diversify revenue streams

What success looks like: Minimize dependence on one market/industry. Add a services arm to generate recurring revenue from maintenance contracts, powered by sensors built in to all new products.

Who will execute: Cross-functional led by CEO and finance

Other goals might be “control costs at each step and deliver cobots to customers on time and to specifications” with an expectation to lower COGS by 10% and raise the company’s Net Promoter Score by 25% within one year. Or for sales, “find 10 new customers for the company’s agricultural cobots and bundle maintenance contracts with each sale.” That ties back to revenue diversification.

An important point: Every manager is accountable for every goal, not just those that lie within their purviews.

Informed decisions and actions 

Planning across PickerBots’ supply chain was disjointed, with engineers purchasing materials direct and little central planning or cost control. As part of the IBP process, the company will adopt sales and operations planning (S&OP) principles to improve its supply chain and logistics.

Actionable goals here include building visibility into how each department is working and tying the impact of decisions to financial goals. For example, by having R&D build in sensors that can automatically collect and transmit data on a cobot’s operational status, PickerBots can proactively perform preventative maintenance so the devices are almost never down — an important selling point and a way to contribute to maintenance income.

Organizationwide, divisions need to focus less on their own needs and view actions through the lens of all goals. That means the company needs to collect a lot of timely data and use it to issue reports so managers can make better decisions, more quickly. That may require an investment in ERP and other software.

Transparency/visibility 

All department heads will take part in a monthly business review, where the group will assess progress in achieving the company’s objectives. The strategic plan is also available to all staff members, and quarterly all-hands meetings will be held to gather ideas and insights and walk through KPIs.

Four success metrics for the IBP process include:

1. Getting all stakeholders to buy in to corporate goals so that everyone agrees and understands what the business wants to achieve and how it will get there. There are clear responsibilities for each function in the pursuit of goals.

2. Basing business decisions on data. The integration of finance into product, demand and supply functions is key here, as are selecting the right KPIs.

3. Tying decision-making to outcomes and improving accountability. Because every department is responsible for providing accurate numbers and projections, there’s less risk that the CFO and finance team are left holding the bag if revenues fall short.

4. Shifting the culture to embrace cross-functional collaboration. An IBP process encourages openness and trust, and as a result more deeply engages and empowers employees. As an action item, each R&D and manufacturing team member will spend a week annually accompanying sales reps on customer calls.

What Is the Difference Between S&OP and IBP?

The term “IBP” was coined by management consultancy Oliver Wight to describe the next iteration of the sales and operations planning (S&OP) process Wight developed in the early 1980s.

The big difference between IBP and S&OP is that the latter has become the domain of supply chain and logistics specialists, particularly those involved in supply-and-demand balancing and planning. S&OP is execution-focused and involves a traditional budgeting process.

In contrast, IBP takes a more cross-functional and holistic approach to weaving business goals through every function. As a result, in theory, supply chain management is proactive and optimized.

IBP includes S&OP processes but because it involves cultural change, without executive buy-in, IBP will not be successful.

Some major differences between S&OP and IBP are:

6 Steps in the Integrated Business Planning Process

Now that its goals are set, PickerBots can take the next steps in its IBP journey.

1. Determine what is holding the company back. Is it a lack or growth or profitability? Is the product portfolio too complex? Has the business lost competitiveness in its space? For our manufacturing firm, the main problem was overfocus on one niche market.

2. Engage and educate employees. Once leadership buys in to goals, that enthusiasm must trickle down through the ranks. Unless everyone is committed to integrated business planning, success will be elusive. The COO recognizes that a formal employee engagement program will keep workers invested in the success of the business and actively working to meet strategic goals.

3. Set up a tiger team. IBP success comes from tight coordination, constant communication and accountability for KPIs. It’s a cultural shift that will take time to propagate throughout the business. To jumpstart things, PickerBots identified engaged employees within each functional area and assigned them to a daily 20-minute standup call. Now, say a shipment of RFID readers needed by manufacturing will be two weeks late. The purchasing team member shares that information promptly so that sales can manage customer expectations and finance can account for delayed revenue. If the problem recurs, the company can seek out new suppliers. No more surprises.

4. Establish a project/product prioritization process. IBP takes discipline. Only projects that forward the company’s strategic goals get resources. Same for products. That might mean sunsetting a line that’s still selling but lacks growth potential. All managers who require resources or have a product or service launch idea fill out a cost-benefit analysis template that is tailored to reveal whether expected benefits and costs align with goals. Leadership prioritizes using this process. No more sacred cows.

5. Expand the finance team’s influence. Finance needs to sit in on product planning, supply chain optimization and sales strategy meetings. Specifically, choose a finance team member well-versed in FP&A functions. FP&A professionals inform major decisions made by the executive team and collect and analyze financial data from across the organization to create reports that reveal whether goals are being met — and if not, why not? How do we fix the problem? Like many smaller firms, PickerBots doesn’t have a dedicated FP&A staffer, so the head of finance assigns an accounting team member who knows the business and has an aptitude for data collection and number crunching.

6. Adopt technology and tools to support IBP. If the forecasting process is seen as a quarterly or annual exercise imposed by finance and yielding little benefit to departments, IBP can’t succeed. Companies with static, point-in-time budgets need to adopt rolling forecasts to make sure the business stays on track. And, finance teams need to be able to easily access the data they need from each operational area. Both rolling forecasts and better use of data require technology and a commitment to transparency. You can’t manage what you can’t measure.

Traditional vs. Rolling Forecasts

5 tips to succeed at integrated business planning.

Some ways the COO plans to set PickerBots up for success include:

1. Sell IBP as a way to bring order from chaos. For example, large companies, especially those that have engaged in a number of mergers and acquisitions, may have thousands of SKUs and product codes. One big manufacturer Oliver Wight worked with used IBP to whittle 120,000 item numbers down to about 10,000 and reduce inventories by 50% while improving on-time, in-full delivery by up to 20%. For a smaller company, IBP can prevent ever getting in a situation where it needs to slash 90% of SKUs.

2. Adopt a continuous improvement mindset. All parts of any production or service system, particularly people, are interconnected, inform one another and are mutually dependent on generating successful outcomes. This practice’s origin comes from Kaizen, a Japanese term meaning “change for the better.” Originating in Japan, the business philosophy looks to continuously improve operations and involve all employees, from assembly line workers to the CEO. It’s a way to reinforce IBP.

3. Get buy-in from the CIO. PickerBots’ CIO came up through the ranks of manufacturing IT and is familiar with the concept of Total Quality Management (TQM), which has overlap with IBP. That went a long way in communicating the benefits of IBP and freeing up budget for technologies that can make IBP work, like ERP, enterprise performance management (EPM), supply chain management and real-time-capable accounting and finance software — especially important to realize the “one set of numbers” value proposition.

4. Apply risk management principles. Disasters large and small happen. While the zen of IBP skews toward positive and upbeat, make sure department heads are doing scenario planning and what-if analyses to model operational risk — like overdependence on one market. Consider assigning your tiger team a secondary function as a crisis management strike force.

5. Don’t forget HR. Labor is likely your company’s biggest operating expense, so ensure that it’s working for your IBP effort, not against it. A human resources professional can identify traits in applicants — like team players who are data driven and comfortable with transparency — that predict whether they will be contributors to IBP success.

Benefits of Integrated Business Planning

Research shows that the main benefit of implementing IBP is increased revenue, followed by forecast accuracy and improved Perfect Order Delivery rates.

Three additional key benefits:

Real-time insights: Once companies have instituted rolling forecasts, for example, finance can more quickly and accurately answer questions on spending and cash flow. Expect more accurate KPIs across the board.

Ownership: The flip side of accountability is that in a company fully embracing IBP, all employees assume responsibility for meeting all goals. So you’d better make sure that authority to make decisions is decentralized and tied to responsibility for outcomes, because there are few bigger morale killers than accountability without the power to effect success. Companies can further nurture a culture of ownership by tying rewards to meeting or exceeding goals.

Improved customer satisfaction: While more on-time, in-full deliveries make customers happy, that’s not the only way IBP improves Net Promoter Scores. Better planning yields better insights into what customers want, and a strong company culture often leads to improved customer empathy and its associated benefits.

Integrated Business Planning Adoption Challenges

Where a business starts with IBP depends on its maturity. Companies with dog-eat-dog cultures and highly siloed processes have a lot of work to do. These tend to be firms with traditional top-down management structures, static annual budgeting with little ability to generate forward-looking projections and dated business plans that are misaligned with current customer needs.

While all are thorny structural challenges, a leadership team that’s averse to placing trust and decision-making authority at lower levels of the organization is in even worse shape. Companies with autocratic, command-and-control styles must be willing to decentralize authority if they hope to realize IPB’s benefits.

Even businesses with mature, integrated processes and egalitarian cultures often get tripped up by “top down” versus “bottom up” KPI reporting and budgeting. IBP requires businesses to focus less on finance developing a top-line budget and then handing departmental budgets down from on high. Rather, they need to become comfortable with a bottom-up process, where departments start with a plan of what they want to achieve, calculate what it will cost and then feed a number up to the finance team, which uses that input to calculate the total budget.

Companies not already using at least a somewhat flexible budgeting process are likely to find this shift difficult. One way to jump-start the transformation might be a modern form of zero-based budgeting.

Steps of Zero-Based Budgeting for 2021

• Create a strategic vision for ZBB: Identify cost targets, relevant KPIs and goals.
• Evaluate business units to select ZBB candidates (also referred to as “decision units,” or any organ of the business that operates independently with its own budget).
• Start selected budgets from scratch (i.e., from zero).
• Each decision unit provides “decision packages,” which break down each activity in terms of its objective, funding needs, justification in the context of company goals, technical viability and alternative courses of action.
• Evaluate each proposed item to determine its value-add to the company and whether the entire cost is justified. What does the expenditure bring back to the company?
• Prioritize costs based on company goals. Reduce or cut expenses in areas that no longer produce significant value.
• Allocate funds among areas that are productive and aligned with the business’s growth drivers.

Elements of Integrated Business Planning

Integrated business planning takes place at a regular cadence; every month is most common, so we’ll use that in our example.

These steps are standard for IBP consultants, adaptable to most industries and bake in the PickerBots COO’s virtuous cycle of market research and strategic planning, R&D and manufacturing, demand forecasting and predictive analysis, profitability analysis, supply chain optimization and marketing and sales strategy.

1. Product management review. This includes all elements of product portfolio management. A cross-functional team meets monthly to review the overall status of all of product-related projects: Are they on track? Have we identified new risks and opportunities? Are the most high-value products or services prioritized? The goal is aligning the product portfolio with business goals and making sure needed raw materials and manufacturing floor capacity are lined up. Product managers revise as needed and publish an updated master plan, along with the resources it’ll take to deliver any changes.

2. Demand planning picks it up. This is a cross-functional process that helps businesses meet customer demand for products while minimizing excess inventory and avoiding supply chain disruptions. Demand planning can increase profitability and customer satisfaction and lead to efficiency gains. This team brings together members of sales, marketing and finance to determine whether they’re targeting the right markets, the right way. They work up an optimized demand plan. Relevant KPIs include sales forecast accuracy, inventory turns, fill rates and order fulfillment lead times.

3. Then, the ball goes to the supply planning team. These supply chain experts work out the optimal way to meet projected demand in a cost-effective way. The key is to have visibility into complex supply chains; a formal supply chain visibility (SCV) project helps spot and fix weaknesses, such as inventory shortfalls or order fulfillment issues, before they become major problems. Lower cost of goods sold (COGS) is the North star.

4. The integrated reconciliation team pulls together the initial product, demand and supply plans and consolidates them into one holistic business plan based on a 24- or 36-month projection; for iterative updates, teams highlight material changes. Decisions that could not be made by individual teams are prepared for executive review.

5. The executive team resolves conflicts and rolls the updated plan out to the entire company.

Integrated Business Planning Components

The components of integrated business planning comprise three buckets: Plan, execute and monitor and adjust.

Specific actions falling into each bucket vary depending on the consultancy or technology supplier. Some are more aligned with supply chain planning, while others center on S&OP or financial planning with plug-ins to other functional areas. Others are very industry-specific.

Let’s look at Oracle’s IBPX (Integrated Business Planning and Execution) for Manufacturing solution as an example. Key components include:

• Top-down and bottom-up, driver-based planning and forecasting
• Risk modeling for M&A and strategic initiatives
• Full financial statement structure for strategic and operational planning
• Predictive and prescriptive analytics and planning
• A preseeded S&OP process
• Near-real-time demand and supply balancing
• Real-time backlog management
• Automation of predictions and correction actions based on actuals
• AI-enabled operational planning, such as for sales territories and quotas
• IoT and sensor data flows integrated with automated decisions

Items like backlog management and enhanced support for IoT and sensor data are important to manufacturers like PickerBots. A retailer might be more interested in advanced inventory management. What’s important is that any solution, whether purchased as a suite or pulled together by an integrator or in-house team, supports the ability to do long- and medium-range and short-term planning based on a single, up-to-date data set that’s accessible to all authorized stakeholders.

Also look for the ability to easily model “what-if” scenarios, robust budgeting and costing and a roadmap to advanced technologies like AI and predictive analytics.

Integrated Business Planning Examples

We mentioned the Oliver Wight customer that whittled 120,000 SKUs down to about 10,000. That firm, Uponor Group, looked to IBP after a string of acquisitions left it with swelling inventories, an extremely complex portfolio and a lack of communication between siloed functions and far-flung locations. The Finnish company sells products for drinking water delivery as well as radiant heating and cooling equipment and has 3,900 employees in 30 countries. Uponor had a hard time getting a singular view of financial information across its subsidiaries, and each unit had its own practices for inventory management. Small events, such as holidays, would drive some sites to build up “just in case” inventory, and double-stocking in warehouses was common. Subsidiaries in different countries had different SKUs for the same items, and R&D was localized, with no collaboration across the company.

Upinor focused first on its supply chain and implemented S&OP processes, then advanced to IBP the following year. The results have been an increase in net sales of $1.1 billion euros, a 30% improvement in on-time in-full deliveries, a 50% reduction in inventories and increased visibility.

U.S.-based technology provider Juniper Networks also undertook an IBP project focused on implementing a digital supply chain with IBP, where the business planning process would extend S&OP throughout the supply chain, product and customer portfolios, customer demand and strategic planning.

Since undertaking the project, Juniper’s lead-time attainment is up 55%. and its inventory costs are down by 15%, allowing it to realize a positive ROI on the IBC project.

History of Integrated Business Planning

Oliver Wight developed S&OP in the 1980s as a methodology for a client that wanted to balance supply-and-demand volume. In the years since, the process evolved to integrate financials, inventory and new-product introductions.

The consultancy renamed S&OP as integrated business planning in the late 1990s to reflect the process of integrating all functions of the business behind one optimized plan. Since then, a newer term, “enterprise integrated business planning,” has emerged. EIBP includes scenario planning and extended supply chain collaboration and discusses how large companies will adopt new technologies, such as AI, big data and advanced analytics.

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Applications of Integrated Business Planning

IBP makes planning and operations much more transparent, so it’s ideal for companies moving to “just in time” manufacturing. It’s also predictive, once a company builds up some data. That can help with customer satisfaction.

PickerBots, as an example, found that it typically sees constrained supply chain capacity for motherboards in Q3. With that insight, sales and marketing can work to encourage customers to take delivery of systems in Q2 or Q4, manufacturing can prebuild products and supply chain leaders can work on alternate sources for parts that pose challenges.

Looking ahead to the future of IBP, we expect it to help companies:

• Work on ever-longer-range strategy planning, modeling and M&A activities with a higher degree of confidence.
• Detect and notify stakeholders of unanticipated events before they impact the business by using advanced technologies, including real-time sensor information and machine learning (ML) pattern recognition.

As companies build comfort with automation, advanced IBP systems can be set to take action based on analysis without human intervention. Consider a chain of bakeries; a system plugged into a long-range weather forecast system might detect a tropical storm that could raise the price of vanilla and automatically order extra.

Cloud-based technology such as ERP underpins all these advances. For example, PickerBots always set its sales goals monthly. But often these plans were delayed to let the executive team review and approve any changes, meaning operations was caught unawares. A tool like NetSuite Planning and Budgeting automates planning processes and centralizes company financial and operational data, so finance teams can disseminate updates quickly.

The next frontier? Expending IBP to business partners and suppliers, even customers. But first, companies need to get their own cultural and technology houses in order.

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Imagine a symphony orchestra where each musician plays their own tune without listening to others. The result would be chaotic and dissonant, right? Similarly, in the business world, when decision-making happens in silos and planning processes are disconnected, it’s like having a group of individuals playing their own instruments without any coordination. The harmony is lost, and the organization becomes inefficient, misses opportunities, and struggles to keep up with the fast-paced market.

Integrated Business Planning (IBP) addresses these challenges by providing a comprehensive framework that integrates strategic, operational and financial planning, analysis, and reporting to drive better business outcomes.    A retail company experiences a sudden surge in online sales due to a viral social media campaign. Integrated planning incorporates supply chain planning, demand planning, and demand forecasts so the company can quickly assess the impact on inventory levels, supply chain logistics, production plans, and customer service capacity. By having real-time data at their fingertips, decision-makers can adjust their strategies, allocate resources accordingly, and capitalize on the unexpected spike in demand, ensuring customer satisfaction while maximizing revenue.   This blog explores the significance of IBP in today’s modern business landscape and highlights its key benefits and implementation considerations.

Integrated business planning framework

Integrated Business Planning (IBP) is a holistic approach that integrates strategic planning, operational planning, and financial planning within an organization. IBP brings together various functions, including sales, marketing, finance, supply chain, human resources, IT and beyond to collaborate across business units and make informed decisions that drive overall business success. The term ‘IBP’ was introduced by the management consulting firm Oliver Wight to describe an evolved version of the sales and operations planning (S&OP process) they originally developed in the early 1980s.

Making up the Integrated Business Planning framework are six key pillars:

1. strategic planning.

Integrated Business Planning starts with strategic planning. The management team defines the organization’s long-term goals and objectives. This includes analyzing market trends, competitive forces, and customer demands to identify opportunities and threats. Strategic planning sets the direction for the entire organization and establishes the foundation for subsequent planning roadmap.

2. Operational planning

Operational planning focuses on translating strategic goals into actionable plans at the operational level. This involves breaking down the strategic objectives into specific targets and initiatives that different departments and functions need to execute.

For example, the sales department might develop a plan to enter new markets or launch new products, while the supply chain department focuses on inventory optimization and ensuring efficient logistics. The key is to align operational plans with the broader strategic objectives to ensure consistency and coherence throughout the organization.

3. Financial planning

Financial planning ensures that the organization’s strategic and operational plans are financially viable. It involves developing detailed financial projections, including revenue forecasts, expense budgets, and cash flow forecasts. By integrating financial planning with strategic and operational planning, organizations can evaluate financial profitability, identify potential gaps or risks, and make necessary adjustments to achieve financial targets.

 4. Cross-functional collaboration

A fundamental aspect of IBP is the collaboration and involvement of various functions and departments within the organization. Rather than working in isolation, departments such as sales, marketing, finance, supply chain, human resources, and IT come together to share information, align objectives, and make coordinated decisions.

5. Data integration and analytics

IBP relies on the integration of data from different sources and systems. This may involve consolidating data from enterprise resource planning (ERP) systems, customer relationship management (CRM) systems, supply chain management systems, and other relevant sources. Advanced analytics and business intelligence tools are utilized to analyze and interpret the data, uncovering insights and trends that drive informed decision-making.

6. Continuous monitoring and performance management

The Integrated Business Planning process requires continuous monitoring of performance against plans and targets. Key performance indicators (KPIs) are established to measure progress and enable proactive management. Regular performance reviews and reporting enable organizations to identify deviations, take corrective actions, and continuously improve their planning processes.

What are the benefits of Integrated Business Planning?

By integrating strategic, operational, and financial planning organizations can unlock the full potential of IBP and drive business success and achieve their goals.

Enhanced decision-making

IBP facilitates data-driven decision-making by providing real-time insights into various aspects of the business. By bringing together data from various departments, organizations can develop a holistic view of their operations, enabling them to make better-informed decisions.

Improved alignment

By aligning strategic objectives with operational plans and financial goals, IBP ensures that every department and employee is working towards a common vision. This alignment fosters synergy and drives cross-functional collaboration.

Agility and responsiveness

In the rapidly changing business landscape, agility is crucial. IBP allows organizations to quickly adapt to market shifts, demand fluctuations, and emerging opportunities. By continuously monitoring and adjusting plans, businesses can remain responsive and seize competitive advantages.

Optimal resource allocation

Integrated Business Planning enables organizations to optimize resource allocation across different functions. It helps identify bottlenecks, allocate resources effectively, and prioritize initiatives that yield the highest returns, leading to improved efficiency and cost savings.

Risk management

IBP facilitates proactive risk management by considering various scenarios and identifying potential risks and opportunities. By analyzing data and conducting what-if analyses, companies can develop contingency plans and mitigate risks before they materialize.

Essential steps for implementing Integrated Business Planning

Implementing an effective IBP process requires careful planning and execution that may require substantial effort and a change of management, but the rewards are well worth it. Here are some essential strategic steps to consider:

1. Executive sponsorship

Establish leadership buy-in; gain support from top-level executives who understand the value of Integrated Business Planning and can drive the necessary organizational changes. Leadership commitment, led by CFO, is crucial for successful implementation.

2. Continuous improvement

Continuously monitor and adjust; implement mechanisms to monitor performance against plans and targets. Regularly review key performance indicators (KPIs), conduct performance analysis, and generate timely reports and dashboards. Identify deviations, take corrective actions, and continuously improve the planning processes based on feedback and insights.

3. Integration of people and technology

To foster cross-functional collaboration, the organization must identify key stakeholders, break down silos, and encourage open communication among departments. Creating a collaborative culture that values information sharing and collective decision-making is essential.

Simultaneously, implementing a robust data integration system, encompassing ERP, CRM, and supply chain management systems, ensures seamless data flow and real-time updates. User-friendly interfaces, data governance, and training provide the necessary technological support. Combining these efforts cultivates an environment of collaboration and data-driven decision-making, boosting operational efficiency and competitiveness.

4. Technology

Implement advanced analytics and business intelligence solutions to streamline and automate the planning process and assist decision-making capabilities.  These solutions provide comprehensive functionality, data integration capabilities, scenario planning and modeling, and real-time reporting.

Integrated Business Planning software

From a tech perspective, organizations need advanced software solutions and systems that facilitate seamless data integration and collaboration to support IBP. Here are some key components that contribute to the success of integrated business planning:

1. Corporate performance management

A platform that serves as the backbone of integrated business planning by integrating data from different departments and functions. It enables a centralized repository of information and provides real-time visibility into the entire business.

2. Business intelligence (BI) tools

Business intelligence tools play a vital role in analyzing and visualizing integrated data from multiple sources. These tools provide comprehensive insights into key metrics and help identify trends, patterns, and opportunities. By leveraging BI tools, decision-makers can quickly evaluate financial performance, make data-driven business decisions and increase forecast accuracy.

3. Collaborative planning and forecasting solutions

Collaborative planning and forecasting solutions enable cross-functional teams to work together in creating and refining plans. These planning solutions facilitate real-time collaboration, allowing stakeholders to contribute their expertise and insights. With end-to-end visibility, organizations can ensure that plans are comprehensive, accurate, and aligned with business strategy.

4. Data integration and automation

To ensure seamless data integration, organizations need to invest in data integration and automation tools. These tools enable the extraction, transformation, and loading (ETL) of data from various sources. Automation streamlines data processes reduces manual effort and minimizes the risk of errors or data discrepancies.

5. Cloud-based solutions

Cloud computing offers scalability, flexibility, and accessibility, making it an ideal choice for integrated business planning. Cloud-based solutions provide a centralized platform where teams can access data, collaborate, and make real-time updates from anywhere, at any time. The cloud also offers data security, disaster recovery, and cost efficiencies compared to on-premises infrastructure.

6. Data governance and security

As organizations integrate data from multiple sources, maintaining data governance and security becomes crucial. Establishing data governance policies and ensuring compliance with data protection regulations are vital steps in maintaining data integrity and safeguarding sensitive information. Implementing robust data security measures, such as encryption and access controls, helps protect against data breaches and unauthorized access.  

IBM Planning Analytics for Integrated Business Planning

IBM Planning Analytics   is a highly scalable and flexible solution for Integrated Business Planning. It supports and strengthens the five pillars discussed above, empowering organizations to achieve their strategic goals and make better data-driven decisions.  With its AI- infused advanced analytics and modeling capabilities, IBM Planning Analytics allows organizations to integrate strategic, operational, and financial planning seamlessly. The solution enables cross-functional collaboration by providing a centralized platform where teams from various departments can collaborate, share insights, and align their plans.  IBM Planning Analytics also offers powerful data integration capabilities, allowing organizations to consolidate data from multiple sources and systems, providing a holistic view of the business. The solutions’s robust embedded AI predictive analytics uses internal and external data and machine learning to provide accurate demand forecasts. IBM Planning Analytics supports continuous monitoring and performance management by providing real-time reporting, dashboards, and key performance indicators (KPIs) that enable organizations to track progress and take proactive actions.  As the business landscape continues to evolve, embracing Integrated Business Planning is no longer an option but a necessity for organizations. To succeed in this dynamic environment, businesses need an integrated approach to planning that brings all the departments and data together, creating a symphony of collaboration and coordination.

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Complete Guide to Integrated Business Planning (IBP)

Integrated Business Planning, or IBP for short, is a strategic management process that connects various organizational departments to align business operations with financial goals. How? By integrating business functions – such as Sales, Marketing, Finance, Supply Chain and Operations – to create a holistic view of the company’s performance and future direction. This blog post offers a comprehensive guide to discuss what precisely IBP entails and how Finance can drive business results and collaboration within the organization via a robust and comprehensive IBP process.

What Is IBP?

While the business world and Finance have always had shared language and acronyms, some new (and reimagined) acronyms may now be flooding your feed.  One such topic you may be hearing a lot about lately is Integrated Business Planning (IBP).  Yet the concept of IBP isn’t new. In fact, it’s related to Sales & Operations Planning (S&OP) , a concept that’s been around awhile.

Still, IBP may seem overwhelming in the context of all the different acronyms related to financial and operational planning floating around lately.  For example, IBP, S&OP, eXtended Planning and Analysis (xP&A) and others are just a few acronyms muddying the waters.  But this comprehensive guide to all things IBP aims to help demystify the process.

So what, exactly, is IBP?

IBP ultimately aims to unify business strategy with planning, budgeting and forecasting activity for all business lines and functions – providing one version of the numbers.  In turn, a trusted, common view of the numbers provides a robust baseline for agile decision-making.  That common view also keeps all teams collectively trying to achieve the same corporate objectives while staying focused on specific KPIs. In other words, the different teams maintain their independence while working in unison to achieve corporate success by leveraging the same trusted and governed data.

The bottom line?  IBP is about aligning strategy intent, unifying planning processes and bringing the organization together.

How IBP Works

The IBP process is a framework to address the C-suite needs and help implement the business strategy and manage uncertainty to improve decision-making.  So what’s the secret sauce of IBP to make all of that happen?  A collaboration between the different teams under a single view of the numbers that must unequivocally be tied to financial performance.  That’s how the C-suite gets value from IBP. Consequently, Finance plays a central role in the IBP process.

IBP typically focuses on horizons of 24-60 months, as opposed to the short term.  That focus equates to Integrated Tactical Planning or Sales and Operations Planning and Execution.  Since the process must be fully integrated, it removes the departmental silos.  Plus, the IBP process must adapt to the organizational construct of every business (IBP isn’t a one-size-fits-all type of process).

A typical IBP process involves several stages:

• Data Collection and Analysis :  Gathering relevant data (e.g., sales forecasts, production capacities, inventory levels and financial projections) from different departments.
• Demand Planning:  Predicting future demand based on historical data, market trends, customer feedback and sales forecasts.
• Supply Planning:   Determining the resources and capabilities (e.g., materials, production capacity and distribution channels) needed to meet the forecasted demand.
• Financial Planning :  Developing financial plans and budgets aligned with the demand and supply forecasts, considering factors such as revenue targets, cost structures and investment requirements.
• Scenario Planning:   Creating alternative scenarios to assess how different strategies, market conditions or external factors impact business outcomes.
• Management Business Review :  Collaborating across departments to make informed decisions on resource allocation, investments, pricing strategies and operational adjustments.
• Execution and Monitoring :  Implementing the plans, tracking performance against targets, and continuously monitoring key metrics to identify deviations and take corrective actions.

The most efficient way to foster this collaboration is through a unified solution and data model that caters to the needs of the various agents involved on each review.  In fact, Figure 1 shows how one solution gathering all the capabilities in the greyed area under a unified data model is the most efficient approach to IBP.

Figure 1: A Unified Data Model for IBP

Core Elements and Stages of the IBP Process

The IBP process includes the following core elements:

• Governance Structure :  Establishing a cross-functional team with representatives from key departments to oversee the IBP process, define roles and responsibilities, and ensure alignment with organizational goals.
• Data Integration :  Integrating data from different systems and sources to create a single source of truth for decision-making, using technologies such as enterprise resource planning (ERP) systems, Corporate Performance Management (CPM) tools, business intelligence (BI) tools and data analytics platforms.
• Collaborative Planning :  Encouraging collaboration and communication between departments to share insights, align objectives and develop consensus-based plans that support overall business objectives.
• Continuous Improvement :  Implementing feedback loops, performance reviews and process refinements to enhance the effectiveness and agility of the IBP process over time.

Want to learn how you can maximize the benefits of your IBP process and get leadership on board with the plan?  Check out our eBook Unifying Integrated Business Planning Across Finance and Supply Chain .  You’ll learn how to unify IBP across Finance and Supply Chain teams and read about use cases as proof points.  Plus, you’ll gain an understanding of the unique capabilities OneStream’s Intelligent Finance Platform brings to unify Finance and Supply Chain planning activities.

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Integrated Business Planning

For integrating functional plans, deploying business strategy, and driving business management, what is integrated business planning (ibp).

Integrated Business Planning (IBP) is a common-sense process designed for effective decision-making and led by your leadership team. True business integration means senior management can plan and manage the entire organization over a 24-36 month horizon, aligning strategic and tactical plans each month, and allocating critical resources, people, equipment, inventory, materials, time, and money; to satisfy your customers in the most profitable way.

Integrated Business Planning represents the evolution of Sales and Operations Planning (S&OP) from the supply and demand balancing process developed in the early 1980s. Today it is a process that drives the alignment of all functions across an organization, models and creates readiness for alternate outcomes, drives deployment of strategy, and enhances collaboration across supply chains.

What is the difference between S&OP and IBP?

There are many differences between Sales & Operations Planning and Integrated Business Planning, but firstly it’s important to note that IBP is not a supply chain process ; it has a much broader reach. IBP is the process that connects your strategy and business plan to ensure both are delivered.

The purpose of IBP is not to drive a better forecast with which supply chain can plan. It is the process that brings focus to the deployment of your business strategy and provides a framework for effective decision-making to drive growth.

It's also much more than just a monthly meeting. IBP is a company framework to surface and solve problems and continually re-optimize plans as circumstances change. IBP enables businesses to create an aligned, cross-functional plan for the future, based upon key assumptions. These assumptions, documented and updated each month, are based on insights.

Read our white paper to learn more about what sets Integrated Business Planning apart from Sales & Operations Planning.

Looking for help with IBP software?

Oliver Wight IBP Powered by Board is a holistic solution combining Oliver Wight's industry-leading Class A and implementation change management processes with Board software. Fully align people, processes, and technology and embed IBP and its benefits for years to come.

This offering combines IBP technology and process in one package for rapid time to value. You will benefit from Oliver Wight consulting and education + Board Intelligent Planning Platform + specialist implementation services. 

Find out more.

How mature is your organization's true level of maturity in IBP?

Before embarking on any performance improvement program, it is imperative to identify your organization's true level of maturity. The Oliver Wight Maturity Model characterizes an organization as being in one of four key phases of maturity: Co-ordination, Business Process Control, Automation, or Integration. Assess your business maturity in Integrated Business Planning using our free online self-assessment tool .

Assess your business maturity

How you can benefit from Integrated Business Planning

Early identification of gaps in the business plan and strategy deployment, creating time to close them

An integrated view of performance and projection of your business over a 24-36 month horizon

Alignment of functional operating plans and financial projections with ‘one set of numbers’

Application of scenario planning and modelling to areas of your business where there may be uncertainty or impact

Increased responsiveness to uncertainties and unplanned events to minimize negative impacts and seize opportunities

Creation of transparency and clear accountability across the business/organization

Simplification of the budgeting or annual planning process

Integration of strategy deployment with operational plans

Increased employee engagement and efficiency

Growth in revenue

Reduced costs

Improved customer service

Reduced inventory

Visibility of planned product changes, future demand from sales and marketing, supply chain performance, planned supply chain capability and flexibility, plus bottom-up plans and the actions and decisions required to deliver ‘best for business' outcomes

You should consider Integrated Business Planning for your business if:

You are constantly in ‘fire-fighting’ mode

You have a misaligned management team

You are continually missing the financial plan

You are experiencing rapid growth and can no longer manage effectively using an informal process

Your budgeting process is ‘painful’

You are struggling to get on top of service issues

You cannot keep up with growth in demand

You have excessive inventory

You are experiencing excessive rework and cost

Departments or sites are working in silos

There is no ‘single source of truth’ or ‘single set of numbers’ to run the business

You feel like you never have time to look at the strategy

There is poor deployment and execution of the strategic plan

You have poor employee engagement

You feel like you are not getting a return on the effort put into your existing S&OP/IBP process

How we can help

A diagnostic assessment of your current S&OP or IBP process, including its effectiveness and identifying any performance issues

Transfer of our knowledge to your people so they can create and manage an effective IBP process

Change management – plan, monitor, and support the implementation of change and its impact on your people

Facilitate the design of an IBP process to best fit your organization and its needs

Scoping of an action plan to address issues and take advantage of the opportunities identified, including resourcing, timelines, and performance improvement expectations

Coach IBP process users as you introduce the new ways of working

Assess and validate that your IBP process has achieved a Class A level of effectiveness – firmly embedded as the ‘way you do things’ and delivering the benefits you wanted

Integrated Business Planning is a cutting edge process which creates cross-functional alignment and enables businesses to re-focus to meet the ever-changing environment. IBP generates readiness for alternative outcomes, enhances collaboration, and ultimately drives deployment of strategy in an uncertain world. The chosen process of some of the world’s most progressive and best-known organizations, IBP is a common-sense process that maximizes profit and enables leaders to manage risk with confidence.

Integrated business planning resources to help you improve.

White papers & case studies

Videos & webinars

Get in touch

Upcoming courses.

11 Jun 2024

Virtual (English)

Integrated Business Planning – Introduction, Overview, and Current Best Practice

More information +

10 Sep 2024

08 Oct 2024

Virtual (French)

French Integrated Business Planning Workshop

12 Nov 2024

Latest white papers & case studies

The IBP advantage: a roadmap for marketing and product teams to collaboratively deliver success

Doom looms or opportunity awaits

Assumptions Management Part 2: Structural Integrity

Navigating the decision: behavior, empowerment, and integration to support the information revolution

From complexity to simplicity: The power of aligning people, process, and technology

Assumptions Management Part 1: Controlling your future in an uncertain world

Five key factors to speed up your successful IBP journey: Intelligent solutions meet your integrated process.

Gehen Sie Fake News nicht auf den Leim.

Transformer son S&OP en IBP

Navigating Uncertainty: Is Your IBP Process Fit for the Future?

Scenario Planning Trigger Points – Creating an Integrated Response to Scenarios

Getting the Most From Integrated Business Planning

Latest books

The Transition from Sales and Operations Planning to Integrated Business Planning - Second Edition

The Oliver Wight Class A Standard for Business Excellence

Le Standard Classe A d’Oliver Wight pour l’Excellence en Entreprise

Der Class A Standard für Business Excellence nach Oliver Wight

El Estándar de Clase A para la Excelencia Empresarial de Oliver Wight

Orchestrating Success: Improve Control of the Business with Sales & Operations Planning

Enterprise Sales and Operations Planning

An Executive's Guide to Achieving Class A Business Excellence

Latest videos and webinars

Balancing planning (ibp) and execution (itp) in rapidly changing socioeconomic environments.

Flavio Pietrocola, Oliver Wight Partner, explains how to find the right balance between Planning (IBP) and Execution (ITP) in this disruptive and rapidly changing world.

How to steer a company through the D-VUCAD world? (in German)

This podcast episode discusses how to steer companies through volatile, unpredictable times and what modern control instruments and technologies there are that companies should use.

Managing Change through Effective Implementation of Integrated Business Planning

Oliver Wight Partner, Gary Connors explains the five common failure modes in implementing Integrated Business Planning and how to manage changes through IBP.

Moving to E2E Supply Chain Management with IBP coordination

Watch the video to see Oliver Wight's CEO Les Brookes explains how to drive End-to-End supply chain transformation with IBP.

Eminox Ltd: What was it like working with Oliver Wight?

Oliver Wight Partner, Dawn Dent spoke to Eminox's Managing Director Mark Runciman, who shares his experience of working with Oliver Wight.

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IBP: Driving Growth, Increasing Productivity & Improving Customer Service

Oliver Wight’s Paul Ducie joins Olivehorse Consulting to discuss how to assess your organization’s maturity, and define the correct approach for implementation.

Dynamic Integrated Business Planning: aligning process and tools to meet the challenges of an everch

The right collaboration between process and tools can deliver the IBP promise efficiently and dynamically.

The Enemies of Effective Measures

Does your business truly understand measuring and analysis? Do you apply the data and learn from it? Or are there conflicting or biased measures happening behind the scenes?

What business leaders are talking about today

Oliver Wight's Andy Walker and EY's Jocelyn Hallum discuss what business leaders are talking about today.

Financial Planning with IBP: Creating one process for your business

Join Oliver Wight Partners Monte Maritz & Lucy Jacobs for this webinar in our ongoing series focused on the evolution of Integrated Business Planning.

Data accuracy in the healthcare industry

Oliver Wight Partners Gary Connors and Steve Rowntree lift the lid on why data accuracy (or inaccuracy) is so prevalent in the healthcare industry.

SWTCH by Pigment

Three days of predictions, insights, and advice from leaders in finance, sales, HR, supply chain and more

Register now here

By  Niels Van Hove , Supply Chain consultant, Mental Toughness coach and S&OP/IBP expert at  Truebridgese

As S&OP found its origin in the supply chain, IBP is often biased with supply chain terminology and reasoning. It can be argued that current IBP development is still driven by a supply chain bias. With this lack of diverse thinking, IBP innovation runs the risk of being not truly ‘integrated’.

Contrary to most current defined maturity phases of IBP, one can find on the internet, we also can define IBP maturity phases from a more strategic angle.

Many experts agree that IBP has a monthly check and balance with the budget and the strategic intentions of a business. Therefore, a well-executed IBP cycle will provide monthly visibility and measures progress against business objectives and strategy in the long-term horizon. Furthermore, we can say that a business strategy and the required strategic resources and capabilities have the goal to get a company closer to its vision.

According to Collins and Porras, a company vision exists from its core values, core purpose, a BHAG (big, hairy, audacious goal) and a vivid description.

• The core purpose is the reason for being; it captures the soul of the organization. Where you can fulfill a strategy, you can’t fulfill a purpose.
• Core values define what the company stands for. A company will stick to them, even if it became a competitive disadvantage in certain situations.

Well defined, integrated and truly lived, purpose and values will drive companywide behavior. Imbedded company behaviors will drive a sustainable company culture, which will last over time.

A well-defined achievable BHAG with a vivid description provides employees with an envisioned future they can identify with and which creates an emotional attachment, which makes them go the extra mile. As CEO Bob McDonald says on the emotional component and innovation at P&G; ‘People will innovate for financial gain or for competitive advantage, but this can be self-limiting, there is a need for an emotional component as well – a source of inspiration that motivates people‘.

If a company wants to track its budget and strategy and we use this vision framework and IBP as the planning process to support the business, IBP can be defined with the following maturity phases:

1. Integrated planning:

In this phase, companies start to focus on integrated planning between previously siloed functional areas. Some functions are more advanced than others. A company might have focused on the state of the art finance processes and systems, but doesn’t reap the full benefits of that due to lack of integration of other functional areas into the finance process. Some integration exists, but not across all functional area’s and there is not enough integration with finance to make a monthly financial prediction on EBIT level in the long term horizon. S&OP as most define it will be in this phase.

2. Dynamic budget planning:

In this phase, enough functional areas plan in an integrated way for the process to provide their input to the P&L to create a fully-loaded forward projected P&L. Finance understands the ‘volume’ input and the other functional areas understand the financial ‘value’ planning. This will provide the company visibility on how it is tracking versus the budget or annual operating plan on a monthly basis on EBIT level.

Why EBIT level? Because I heard too many times in a boardroom the argument, when only gross profit was on the table; ‘we can’t decide on this because we don’t have EBIT a number’ . We can also expect these companies to deliver monthly balance sheet and cash flow prediction. For these companies, there is no separate budgeting or forecasting cycle. Every month can be the budgeting cycle. Dynamic indicates that opportunity and risk scenarios across all functional areas are integrated into the financial projection.

3. Dynamic strategy and capability planning:

In this phase, the company has defined its strategic goals, measurements, and targets and is capable of checking and communicating monthly if they are on track to meet the strategy in the horizon beyond the budget. The strategic intent, which can be defined on lower levels like product segment, country or business unit level, will also guide in decision making for decisions on the budget horizon.

The company has also defined its core strategic capabilities to meet its strategy. There are many strategic capabilities possible.  Ideally, a company shouldn’t have more than a handful as if it will define more it will erode the focus on these capabilities. Some examples are:

• Risk management: for companies that have extended and complex networks that are sensitive and dependent on changes in global and geopolitical events. For example companies with global supply chains, but also the Finance industry.
• Innovation: for companies that in a highly competitive market can outpace their competitors based on innovation and new product development. Often seen in the technology industry and CPG
• Commodity trading: for companies that are highly influenced by commodity cycles as the commodities can be more than 80% of the COGS of their core products. For example, food & beverage companies that have crops and livestock as core raw material.
• Demand is driven supply chain: for companies that can get the competitive advantage from driving their business from the front end of the supply chain. For example food, beverage and consumer package industry. Often in retail and consumer environment, which are promotional driven and where POS information is available,
• Knowledge management: for companies that are highly dependent on knowledge workers and the exchange of knowledge between people and business units. Companies that have IP to integrate, sell and protect. For example Consultancies and software industry.
• Supply exploration: for companies that have to spend high amounts of capital to find new or increase the supply of their core product. For example the oil and mining industry.
• Collaboration:  Collaborative IBP can be a separate phase for companies that see the strategic advantage in collaborating with their suppliers and customer in the longer horizon and therefore want to integrate their business plans. For companies that have the power in the supply chain through size or uniqueness of offering this will most likely not be a strategic focus.

The list can go on and on with Technology, Sustainability etc. Once a company has defined its strategic capabilities and has defined goals, measurements and targets for these capabilities, it needs plans to implement or improve these strategic capabilities. An update on status, progress, risks and mitigations for those plans will be part of the IBP cycle in this phase. Dynamic indicates that sensitivity analysis around the plans to reach the goals of the strategic capability is part of the update.

4. Integrated vision & purpose:

In this phase, companies have a well-defined purpose, values and an achievable BHAG with a vivid description that people can identify with and which create an emotional attachment. The company aims to integrate this with the IBP cycle.  A company can decide not to pursue strategic opportunities because doing so would compromise their core purpose or values.

A large multi-billion dollar beverage company, for example, decided not to enter the very lucrative market of premium RTD’s (Ready to Drink) alcoholic beverages because the alcohol content was too high. Although the opportunity was achievable and margins were very interesting, the alcohol content would not be in line with their core purpose of ‘bringing more sociability and wellbeing to our world’ . The purpose guided decision making in the strategic horizon.

The company values and the emotional attachment will be tracked in the monthly IBP process and have actions, goals, and measurement. Executives follow progress to understand if employees believe and identify with the companies values, BHAG, and purpose and show emotional attachment. This can be done by 360 degrees feedback, engagement surveys or roundtable discussion between executives and employees. Executives also have to lead by example in behaviour and actions. Their own behaviour will have goals and measurements and progress is tracked,

For all phases, communication is important , although it can be argued that it’s most important when developing an emotional connection. An IBP document on the key decision, outcomes, progress and wins in the IBP cycle can be communicated to a well-defined stakeholder group in the company. This will both give the stakeholders an understanding of business performance, priorities, improvement opportunities and successes, as well as keep the engagement with the company vision, purpose, and the IBP process.

Executives have to realize and appreciate that this communication document is the results of all the hard work from middle and lower management to gather all required IBP information for the executives to make decisions in the IBP meeting. This communication makes sure the IBP meeting is not seen as a ‘black hole’ which only sucks up information and doesn’t provide feedback.

Once a company masters these four phases, it tracks and plans on a monthly basis the budget, the strategic intent and strategic capabilities, the company values, and purpose and the emotional attachment of the employees. If a company then links these plans with shorter-term control plans and execution, we might call it real Integrated Business Planning.

Would these four phases be IBP innovation?

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Consumer-goods companies must transform their planning end to end

The consumer-goods industry has been fending off an array of challenges, such as shifts in consumer expectations and purchasing habits, low GDP growth in some large economies, and a global pandemic that created seismic upheaval. In 2020, the most resilient players were the ones that had already begun rethinking their planning practices.

Those successes are cause for optimism, but existing planning capabilities won’t be sufficient for organizations to keep pace over the next decade. The accumulation of challenges will only make things more difficult for managers of global supply chains and the companies that rely on them. In the current context, supply chains will be called to contribute much more to performance—and that will require a complete reimagining of planning operations, capabilities, company performance, and processes.

The answer: an end-to-end transformation of planning. Technologies such as analytics and machine learning will play a major role, but to be effective they must be supported by new processes, talent, and governance. Companies should start their journey by focusing on five discrete priorities that could generate significant value. The benefits will be well worth the effort.

Pinpointing growth and margin opportunities

A high-performing planning function can provide consumer companies with the ability to capture value across both the top and bottom lines.

Top line: Growth and revenue

In recent years, e-commerce has accounted for 65 percent of growth in the consumer industry. The COVID-19 crisis reshaped the e-commerce landscape by forcing customers to change the way they buy. This trend led to the creation of a number of new “microchannels,” several of which look set to endure beyond the pandemic (Exhibit 1). For instance, the adoption of apps such as DoorDash and Instacart and models such as “buy online, pick up in store” has spiked.

Despite the rapid growth of e-commerce, traditional channels still represent the largest share of sales in the consumer market. Consumer companies have made significant investments in technology, but service levels haven’t improved. They face a number of persistent challenges in this space: increasing customization, greater complexity in the product portfolio, stockouts and missed revenues, and excess inventory. These issues all contribute to a negative customer experience.

Recent events have also placed resilience under the magnifying glass. Over the past 20 years, value chains have become more global, prompting leading companies to develop business-continuity plans. In the second quarter of 2020, we surveyed 60 senior supply-chain executives from across industries and geographies and discovered that a staggering 93 percent of respondents want to increase resilience in their supply chains . The COVID-19 pandemic highlighted the need for more transparent supply chains across industries such as retail, pharmaceuticals, and consumer packaged goods. The few players that had the skills, capabilities, and technology to precisely track SKUs across the supply chain have not only weathered the crisis but have also gained an edge on less-advanced competitors.

Bottom line: Margin and cost

Companies are scrambling to hold down costs and protect margins across several fronts. First, they are facing higher production and logistics costs thanks to the proliferation of SKU portfolios; rising demand for sustainable, organic products and locally sourced fresh goods; and the robust growth of smaller brands, which have expanded three to four times faster than large brands. As a result, costs have risen from lower purchase volumes, manufacturing time has increased from longer changeovers, and less-predictable demand has caused more waste and markdowns.

In addition, the increasingly scattered product portfolio is making end-to-end planning even more critical for organizations seeking to maximize growth and profitability across all planning horizons.

Organizations cannot make optimal decisions without cutting-edge algorithms that can process vast amounts of live data and give planners the insights to react quickly to any change in demand. Finally, most consumer organizations have undertaken ambitious IT transformations that have improved data consistency and accessibility but that have failed to significantly increase planning accuracy or agility. Indeed, many are struggling to generate insights that could deliver superior business value or reduce manual planning efforts.

Establishing a ‘North Star’ for end-to-end planning

Many companies have been making investments in their planning tools and capabilities. Some have made progress in one or even a few areas, but only recently have companies started to tackle planning with the end-to-end perspective needed to significantly elevate performance and address the complex suite of issues. The best-in-class end-to-end planning of the future is built on the following principles:

Cross-functional integration. Companies must manage different planning activities (for example, demand, net requirements, production, and scheduling) in a comprehensive, coordinated way to produce the best decisions for the entire value chain.

Short planning cycles. Traditional monthly planning cycles accelerate to weekly cycles or even continuous-planning processes to enable the agility required in consumer industries.

Advanced-analytics enablement. Advanced analytics helps improve planning quality by, for example, enabling better demand forecasts, production planning, scheduling, and workforce planning.

A high degree of automation. Systems and algorithms support the automation of standard tasks and trigger interventions based on “basic” deviations, allowing planners to focus on exception management and decision making. Tools for automated root-cause identification and the fast, efficient evaluation of alternative actions support planners in their core tasks.

Full supply-chain visibility. Real-time data and performance transparency along the entire supply chain (for example, with inventories and orders) help organizations identify risks and exceptions early on and develop potential countermeasures. In addition, automated scenario-planning capabilities help companies understand the financial implications of potential actions and provide the basis for fact-based, profit-maximizing decisions.

This future state represents a “North Star” for consumer companies. While the end-to-end transformation is aspirational, the required technologies already exist, and companies are making progress across these elements.

Charting a path to value

To unleash maximum value from planning operations, many companies will need to embark on a comprehensive transformation. This effort encompasses several main priorities and embeds the right mix of technology, processes, capabilities, and operating-model changes required to make the journey successful (Exhibit 2).

Focus on business metrics instead of supply-chain key performance indicators: Integrated business planning

Integrated business planning (IBP) builds on real-time financial scenarios that increase the quality of planning decisions as well as the agility of the planning process. Key enablers of efficient IBP are supply-chain and financial planning, system capabilities for real-time scenario creation and evaluation, and machine learning supported by exception identification. IBP is increasingly important for all consumer players, but it is crucial for omnichannel businesses that rely on cross-channel decision making (for example, prioritization decisions in case of bottlenecks). By enabling a coordinated category and product range strategy, companies can make complex trade-offs among pricing, promotions, and availability, a task that is extremely hard to achieve with classic planning systems and capabilities.

An international packaged-food company that was already holding less than 30 days of inventory with service levels above 95 percent embraced this challenge. The company started by cleaning its data to improve availability and transparency and introduced new cross-functional processes to enable data-driven decision making. Through these efforts, it decreased finished-goods inventory by 20 percentage points, improved forecast accuracy by six percentage points, and achieved a threefold increase in response time.

Know what your customer will ask for: Creating a better demand signal

Machine-learning forecasting algorithms use internal and external data sources, as well as their ability to “learn” from historic demand patterns, to continually improve forecast accuracy and minimize manual planning. Leaders harness the capabilities of advanced analytics forecasting tools to strengthen their fact base and close the gap between demand forecasts and commercial targets. Machine-learning algorithms can also simulate the expected impact of sales activities (such as promotions) on demand and help optimize activity management. These tools contribute to an improved customer experience by increasing the availability of the newest offerings. A beverage company built the capabilities to simulate the impact of commercial activities on demand and integrate machine-learning forecasting into its demand-planning processes. The result: an improvement of 13 percentage points in forecast accuracy.

Immediate hands-off order confirmation: No-touch order management

The growth of omnichannel business elevates the importance of automated order-management processes, which give planners the ability to immediately confirm orders—for example, available to promise across planning levels—for optimal stocking based on customer requirements and product availability. Yet side-order management must handle an increased volume of smaller orders. Automation is required to ensure efficient, rapid order processing and allow planners to focus on critical exceptions. As planning becomes more automated and moves toward a touchless operation, it frees up employees to gain new skills so they can focus on more value-adding tasks.

For example, a large consumer-goods distributor developed a stand-alone digital use case to pinpoint inventory position along its supply chain and accurately confirm expected delivery dates and transportation lead times. As a result, client satisfaction rose 30 percentage points.

Break artificial silos between different functions: Automated end-to-end planning

Integrated and highly automated planning processes and systems seamlessly optimize the planning process from demand to production scheduling to deployment. These tools give companies the ability to react in real time to changes in demand or supply exceptions and determine ideal trade-offs among functions. To achieve the greatest impact from advanced demand-sensing solutions, leading consumer-goods players establish automated, end-to-end planning systems to support supply- and inventory-planning agility. That capability allows companies to react to changes in short-term forecasts, manage costs and inventories more effectively, and improve service levels. One leading food company invested in advanced planning capabilities and reduced its inventory by 30 percent while raising customer service levels by three percentage points.

Fix problems before they occur: End-to-end visibility and control

Key elements of a resilient, responsive supply chain include real-time visibility and the early identification and rapid resolution of exceptions (ideally before they have an impact on customers or finances). Service and inventory control towers can help to create transparency, enable fast reactions, and continually address root causes. This visibility is essential to get the right product to the right place at the right time and through the right channel to fulfill customer demand and maximize growth. The COVID-19 pandemic clearly demonstrated the need for transparency across the supply chain, including customers and suppliers. Companies with real-time visibility have been able to react to the disruption much more quickly, make fact-based decisions, and minimize the negative impact on their supply chains—or even gain a competitive advantage.

One home and personal-care company improved customer-service levels by 25 percent through a rapid turnaround of its supply-chain performance. It achieved greater supply-chain visibility by implementing a governance structure (a control tower) that enabled faster response times when identifying exceptions in the supply chain.

Companies with real-time visibility have been able to react to the disruption much more quickly, make fact-based decisions, and minimize the negative impact on their supply chains—or even gain a competitive advantage.

Key success factors in advanced planning transformations

In our experience, a planning transformation is particularly complex. Successful companies must simultaneously manage a large stakeholder base and technological enablement while implementing new ways of working throughout the organization. Executive leadership is a vital component; without the engagement of the top team, any transformation is destined to fail. Business leaders should focus on five actions to accelerate their planning transformation:

• Engage stakeholders beyond the supply chain and the organization. Since the supply chain touches so many different parts of the organization, a successful transformation requires engagement from the CEO and COO. Their presence will lend credence to the transformation and ensure decisions are made in a cross-functional way. A transformation also presents companies with the opportunity to use external data (for example, from retailers, contract manufacturing organizations, copackers, trade partners, and proprietary databases) to generate value for itself and its ecosystem—such as through better visibility on capacity or supply. One company that had a digitally mature procurement function developed an algorithm to predict supply safety, thus improving supply-chain efficiency.
• Develop a plan starting with high-value areas. End-to-end planning transformations run the risk of remaining too conceptual—and therefore difficult to implement. To make efforts more tangible, organizations should select one of the top five use cases and identify its relevance at the granularities of product family, geography, and customer segment (called cells). This exercise enables the development of a portfolio of applications that can be deployed over 12 to 24 months, focusing first on high-impact cells and those with sufficient data. In addition to starting small, organizations should be sure to scale up. One solution is to start with a cell that holds significant business value. Once a sizable flagship has been established and is generating results, the case for scaling can be much easier to make.
• Select the right ecosystem of tech partners. Several tech partners offer advanced integrated solutions, and many start-ups have developed specialized supply-chain offerings—for example, for a specific planning process or industry. While some organizations have specific planning challenges that require customized solutions, executives should start by considering more than one major tech partner. A wider set of candidates can help companies concentrate first on the expected business outcome and then on the technology required to address it.

Reinvent the organization to ensure end-to-end optimization and more agile decision making at interfaces. While advanced planning transformations focus mostly on digital and technology enablement, organizations achieve the greatest planning improvements and efficiency gains through an organization and process redesign. This approach ensures end-to-end decision making in a fit-for-purpose way depending on geography, product segment, channel, and customer type. Indeed, advanced algorithms can solve the most complex issues and identify an optimal solution for the company as a whole. However, this solution can include implications that aren’t beneficial to some individual functions, so organizational setup has to ensure that the resulting actions are executed by all functions to achieve the best outcome.

Organizational changes can take different forms. Radical changes include the creation of a central product organization representing all functions to make optimized trade-offs for a given brand and geography. A less-radical approach is to develop an official network of colleagues in charge of a product or brand while maintaining functional structure. A good way to start is to establish a cross-functional board and ensure it makes decisions based on the recommendations of advanced algorithms. Still, additional elements are required for planning to unlock optimized trade-offs, such as implementing properly aligned incentives for objectives and target functions (for example, by product and channel). In starting such a journey, it is critical to involve key stakeholders in addition to operations, such as sales, marketing, and finance.

• Engage in a massive reskilling program with HR. Planning teams typically still handle a lot of work manually, including consolidating, checking, and reviewing data. As the transformation proceeds, the role of a planning team must evolve to focus more on strategic decision making, trade-offs, and stakeholder engagement. Given the size of the team and the scarcity of those resources in the job market, companies must invest in upskilling as a critical pillar of the planning transformation. In our experience, successful efforts harness techniques such as learning by doing. For example, each individual planner should contribute to the solution design—from business-case creation to delivery—and understand the potential of algorithms to support planning.

How to get started

Companies that want to explore the potential of advanced planning should start by identifying and aligning on a core list of strategic business priorities across their operations and set clear improvement targets for each one. They should then understand how true end-to-end planning across the five priority areas discussed can achieve each of those targets and set a path for the transformation. Finally, they need to devise a clear deployment plan that embeds key success factors across organizational structures, skills, processes, and technologies to make sure that all typical pitfalls are addressed from the start.

Planning activities have traditionally been a supply-chain topic. However, digital and advanced analytics are now unlocking the ability to make complex trade-offs among functions such as sales, production, and the supply chain that will become more critical in the coming years. This dynamic challenges the way companies think about their planning operations and organization. Given the value at stake and the threat posed by digital natives, an advanced planning transformation should be at the top of the agenda for consumer-goods CEOs, and it should focus on five main priorities: integrated business planning, creating a better demand signal, no-touch order management, automated end-to-end planning, and end-to-end visibility and control.

Jérémie Ghandour is an associate partner in McKinsey’s Paris office, Tim Lange is a partner in the Cologne office, Andreas Seyfert is a senior expert in the Berlin office, and Alessandro Turco is an associate partner in the Milan office.

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• Integrated Business Planning

What is Integrated Business Planning (IBP)? And what are the similarities, but also differences when compared to S&OP? In this article, Inchainge discusses everything you need to know about IBP.

What is integrated business planning (IBP)?

Integrated Business Planning (IBP) is the business planning process that extends the principles of Sales and Operations Planning (S&OP) throughout the value chain . It is to create a bridge between strategy and execution. IBP is a next step for companies that already have an S&OP process in place. It is a next step because it integrates the Financial Planning Cycle. The financial function will become part of this cross-functional process. In most companies the business owner of this process will change as well.

Similarities between IBP and S&OP

Integrated Business Planning and Sales and Operations Planning have several similarities between them. These are as follows:

• Monthly process
• Cross-functional approach
• Driven by business strategy
• Tactical planning at an aggregated level

Differences between IBP and S&OP

However, Integrated Business Planning includes content on top of Sales and Operations Planning:

• Financial function involved
• Integration financial planning cycle, like financial budget and forecast
• From volume planning to volume and value planning
• It drives the overall business performance

How does the IBP process work?

Companies have an annual budget cycle, based on their strategic plans and targets. The annual budget projects planned revenues and costs for the year.

In traditional S&OP companies go through a monthly process during which they project for the next 6 to 24 months where demand will go, and what resources need to be available to meet that demand. When gaps are discovered between expected demand and available resources looking this far ahead into the future, this often provides ample time to balance supply and demand, so that by the time real customer orders are submitted, demand can be met.

Suppose that during this monthly S&OP cycle, one would also look 6 to 24 months into the future where expected revenues and costs will go. And how these financial figures would look compared to the annually budgeted revenues and cost. Most likely gaps will occur here as well between the annually budgeted numbers and the monthly updated numbers. Actions could then be taken to address these gaps. Integrating a financial view. When this happens, we actually practice IBP. In IBP the relationship with the financial performance management cycle is very important. Budget and financial forecasting must be aligned and integrated with the steps from the original S&OP cycle.

The challenges of IBP

IBP is a next step in maturity after companies have implemented a proper S&OP process. Integrating finance sounds simple but is not easy at all. People from the physical supply chain side of the business, often speak a different language than people who operate on the financial side. Supply chain people often speak about units, products, and product families, whereas financial people often speak about money, currencies, etc. That also causes both functional areas to be assessed differently with the KPIs that they use. This calls for other participants in the IBP process, compared to participants in the S&OP process.

The 8 common pitfalls when implementing IBP

Be aware of the following risks related to integrated business planning:

• Lack of commitment in some of the needed departments
• If the S&OP process was not yet implemented or stable, IBP is too big of a step
• Targets and forecasts are mixed
• Information not available
• Discussion about numbers instead of the underlying assumptions
• Discussing only short horizon instead of midterm
• Too granular plans and discussions
• Thorough understanding of trade-offs is lacking

Want to know more? Experience IBP!

Because IBP is simple but not easy, a real-life experience creates enormous value for learning about this topic. The participants will feel and recognize the important issues in this process. In our business simulation game, The Cool Connection ,  we have incorporated the most important functions and decisions.

In this business game the team is forced to make a yearly financial budget and quarterly forecasts. The objective is to close the gaps between prediction (the budget and forecasts) on one hand and attained performance on the other. The best performing teams are both profitable and predictable at the same time. In business game The Cool Connection the team is almost experiencing a real-life IBP process.

Besides our business games, you can learn more in our articles about topics such as Total Cost of Ownership (TCO) , strategic alignment and external alignment and collaboration .

Now you know

Now you know that IBP is a next step for companies that already have an S&OP process in place, by integrating the financial planning cycle in this cross-functional process. IBP prompts companies to include planned revenues and costs in their annual budget cycle. Budget and financial forecasting must be aligned and integrated with the steps from the original S&OP cycle. Integrating finance sounds simple but is not easy at all. Supply chain people and finance people tend to speak a different language. Make sure to be aware of the 8 common pitfalls when implementing IBP.

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Learning is the process of acquiring new understanding, knowledge, behaviors, skills, values, attitudes, and preferences. There are many ways to learn but what works best? And why does it matter? In this article, Inchainge discusses everything you need to know about learning.

The Cool Connection

The Cool Connection is an innovative web-based business simulation game. It engages participants in making strategic decisions in the management of a manufacturing company of personal care products. Working in teams of four, participants will represent the functional roles of sales, purchasing, supply chain management and finance. They will be confronted with various real-life, real-time dilemmas.

• Total Cost of Ownership

When buying new equipment, the price tag only tells you part of the story. Energy costs, maintenance, and repair fees are often several times higher than the initial price! But often these are left unconsidered and hold nasty surprises further down the line. Calculating the Total Cost of Ownership is an important step when planning new investments.

• Strategic Alignment

Understanding what strategic alignment really is and why it is important can make the difference between being a successful company and failing. Due to its complexity, the supply chain often faces challenges in aligning its strategy properly and working as one. In this article, Inchainge discusses everything you need to know about strategic alignment.

• External Alignment and Collaboration

In an increasingly global and connected world, companies rarely execute supply chain operations themselves, but must outsource certain tasks. To make sure that supply chains across several companies run smoothly, external alignment is essential. In this article, we’ll discuss everything you need to know about external alignment.

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• Key Performance Indicators
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• Leadership skills

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• Data analytics
• End-to-end Supply Chain Management
• LARG Supply Chain
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• Omnichannel
• Supply Chain
• Supply Chain Finance
• Supply Chain Management
• Supply Chain Risk management
• Supply Chain Volatility
• The Bullwhip Effect
• Sustainability
• Carbon footprint
• Circular Economy
• Does Green Governance drive the ride to a sustainable future?
• Everything You Need To Know About Eco-Efficiency
• Greenwashing: Everything you need to know
• Is it possible to measure the Triple Bottom Line?
• Sustainability v/s Circularity
• The 3Ps Series: People
• The 3Ps Series: Planet
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Integrated Business Planning: A Detailed Exploration of Strategy and Execution

✅ All InspiredEconomist articles and guides have been fact-checked and reviewed for accuracy. Please refer to our editorial policy for additional information.

Integrated Business Planning Definition

Integrated business planning is a management process that synergizes sales, marketing, finance, operations, and logistics to drive an aligned operational plan and business strategy, balancing demand and supply while also considering financial objectives and the allocation of critical resources. It embraces short, medium, and long-term business planning and assists in decision-making, reducing risks, and increasing profitability.

Importance of Integrated Business Planning

The crucial role of integrated business planning.

Today’s businesses exist in a world that is, to say the least, complex and full of rapid changes. In these circumstances, integrated business planning plays a pivotal role in navigating through the turbulent times by bridging the gap between the company’s strategic ambitions and their operational constraints.

As a unifying framework, the process provides a link between the top-level strategic planning and day-to-day operational activities. It eliminates silos between departments providing a holistic, transparent and real-time view of the business. By mapping all operations to strategic goals, it ensures that all decisions and actions are pulling in the same direction toward the fulfillment of those goals.

Aligning Strategic, Operational, and Financial Planning

With integrated business planning, synchronization becomes achievable at an elevated level. It enables businesses to align their strategic objectives with operations and finances, thus ensuring a smooth flow of processes. When strategy, operations, and finance harmoniously work together, it eliminates any disconnects, resulting in effective and efficient decision-making.

From a strategic perspective, the approach aids in prioritizing goals and developing responsive and realistic plans to achieve them. On the operations front, it identifies bottlenecks, assesses risk, and ensures that all operations are in line with strategic objectives. Lastly, the integration with financial planning leads to accurate financial forecasts, effective cash management, and robust financial control.

To put it another way, this integrated view of business planning is akin to a well-conducted orchestra. Each section of the orchestra, be it strategic, operational, or financial, knows its role, its tasks, and how it contributes to the overall performance of the melody; which in this case, becomes the successful completion of strategic goals.

The Outcome: A Resilient Business Model

In the face of evolving markets and shifting customer demands, integrated business planning empowers businesses to quickly identify, adapt, and respond to changes efficiently. The approach supports timely and informed decision-making, improves communication and collaboration, and nurtures a proactive business culture focused on future growth.

The process also provides a robust system that facilitates scenario planning and risk mitigation. It promotes informed and rational decision-making, thus creating a resilient business model capable of withstanding market uncertainties and disruptions.

In summary, integrated business planning offers a comprehensive, more intelligent approach to business management—one that aligns strategy, operations, and finance towards a common goal while driving performance and sustainable growth.

Core Components of Integrated Business Planning

At the epicenter of integrated business planning is demand. Understanding current customer needs and predicting future ones is key to running a profitable operation. This involves market research, analysis of historical data and forecasting. By getting an accurate approximation of demand, businesses can take proactive measures to efficiently meet those needs.

Supply Management

It’s not just enough to understand the demand. A business must have a competent supply management system that can meet the anticipated demand. This is achieved by coordinating all elements of procurement, production, and logistics to effectively fulfill customer needs. A successful supply chain management strategy incorporates everything from sourcing raw materials, managing inventory, production planning, to eventual delivery.

Product Management

Product management is a very significant part of integrated business planning. It’s the process by which a business decides what products to offer and how to position them in the market. Product managers work cross-functionally with other teams like marketing, sales, and engineering, to ensure that the product aligns with company goals and customer requirements. They also analyze market trends, competitive landscape, and customer feedback to inform product features and enhancements.

Financial Planning

Lastly, financial planning provides the fiscal framework for integrated business planning. It involves budgeting, revenue projection, expense tracking, and monitoring financial performance against these predictions. A detailed financial plan enables a business to execute its strategies within available resources, capitalize on opportunities and respond timely to market changes. Financial planning is indispensable for a sustainable long-term business growth.

Each of these components works seamlessly with the others in integrated business planning. While demand, product, and supply chain management ensures that the business retains a competitive edge in the market, financial planning provides the necessary oversight to ensure the business remains profitable while doing so. This alignment across all the key functional areas is what makes integrated business planning so critical to the success of a business.

The Role of Integrated Business Planning in Corporate Decision Making

In a dynamic business environment, integrated business planning helps corporations quickly adapt and respond. It operates as a navigational tool, guiding decision-making processes at various levels of an organization, from operational to strategic.

Operational Decision Making

At the operational level, integrated business planning aids in managing immediate and short-term decisions. It provides a detailed view of the current business operations- from sales forecasts, customer demands, supply chain management to available resources.

For instance, consider a rise in demand for a product. An operational decision might involve assessing the production capacity and inventory levels, which integrated business planning can readily provide by unifying data from multiple business functions. This allows the organization to react swiftly and efficiently to unexpected changes.

Tactical Decision Making

Tactical decisions contributing towards achieving short-term goals also benefit from integrated business planning. It aids in providing a firm ground that aligns operational decisions with corporate strategy.

Key functions like marketing campaigns, collaborations, or prodigious investments often hinge on the insights captured through integrated business planning. It not only allows companies to seize up-to-the-minute market opportunities but also helps in mitigating potential risks.

Strategic Decision Making

At a strategic level – where decisions have long-term implications and contribute directly to the achievement of an organization’s mission – integrated business planning is instrumental. It provides organizations with forward-thinking views, predicting future scenarios, and laying out a roadmap to achieve the desired goals.

For instance, making decisions about entering new markets, launching new product lines, or obsoleting older ones are all powered by the insights from integrated business planning.

Thus, integrated business planning is central to decision-making processes, underpinning them with a clear, synchronized view of business functions. It enables corporations to respond effectively and swiftly to business environment changes, maintaining their competitive edge.

Integrated Business Planning and Risk Management

Integrated business planning (IBP) plays a crucial role in managing business risks. It enables organizations to align strategic, operational, and financial plans to achieve overall corporate objectives.

Assessing and Managing Risks with IBP

With IBP, an organization can continually assess potential risks and adjust its plans based on a comprehensive and timely understanding of possible implications. This process reduces the likelihood of sudden impact from unanticipated events and enhances the resilience of the business.

For instance, IBP can help in foreseeing economic downturns and prepare for them by diversifying income streams or increasing savings. Similarly, if a company anticipates a shortage of raw materials, it may use IBP to develop contingency plans such as seeking alternate supply sources, redesigning products, or adjusting manufacturing schedules.

Identifying Opportunities

On the flip side, integrated business planning also plays an essential role in identifying opportunities. This comprehensive approach can uncover potential synergies, efficiencies, and strategic initiatives that would otherwise go unnoticed. Leveraging integrated data, businesses can identify market trends early, allowing them to deploy new solutions or services ahead of their competitors.

Consider an organization that notices an increase in the use of sustainable materials via integrated data analysis. With IBP, the company can assess the possible financial and operational implications of shifting to eco-friendly materials, then devise strategies to capitalize on this trend.

Holistic View of Business Landscape

Furthermore, the holistic view provided by integrated business planning assists businesses with identifying both threats and opportunities. By providing viably comprehensive, cross-functional views of the business landscape, IBP allows companies to anticipate changes, react effectively, and seize the opportunities these changes bring.

In conclusion, integrated business planning’s role in risk management is immense. It promotes resilience by enabling organizations to anticipate potential risks and build strategies to navigate them. It also encourages innovation by highlighting emerging opportunities, leading to improved competitiveness and sustainability.

Tailoring Integrated Business Planning to Different Business Models

Applying integrated business planning (ibp) to service-based businesses.

The successful application of Integrated Business Planning (IBP) in service-based businesses can prove to be unique due to the nature of service delivery and customer expectations. Unlike in a product-oriented business where the primary goal is to manage the supply chain, service-based businesses encounter market variability and require a flexible planning process.

IBP helps these businesses by providing a platform to align their operational plans with strategic goals. For instance, the nature of the service can dictate the planning horizon and the frequency of revising plans. A healthcare provider may need a more immediate planning horizon compared to a consultancy firm due to the unpredictable nature of medical emergencies. Hence, IBP can be tailored to accommodate these different planning horizons.

Adapting IBP for Product-Oriented Businesses

Product-oriented businesses, on the other hand, often have tangible inventory and a visibly structured supply chain. Here, IBP comes in handy to integrate various components like sales, operations, and finance to ensure the business stays on track to achieve its strategic goals.

By synchronizing all critical business units, the company can ensure demand forecast accuracy, reduce stockouts and overstocks, and optimize cash flow. For instance, in a manufacturing business, the use of IBP can be pivotal in decisions ranging from raw material procurement to production planning to order fulfillment.

Implementing IBP in Hybrid Business Models

A hybrid business model, a mix of service and product-oriented business, calls for even more flexible application of IBP. Hybrid businesses need to balance the complexities of both models, and this can be achieved by integrating decisions about service delivery and product supply.

The outcome is a more harmonized strategic plan that accommodatively factors in both the intangible and tangible aspects of the business. For instance, a software company that offers both software products (product-oriented) and software services (service-oriented) may use IBP to synchronize the timeline for product development and service delivery.

In conclusion, while the fundamental elements of IBP remain the same, its implementation can and should be tailored to the unique needs of specific business models. The flexibility of IBP lies in its ability to adapt and accommodate the diverse patterns of businesses, ensuring alignment of strategic goals with operational plans. This is what makes IBP not just an effective planning tool, but an innovative business methodology.

The Relationship between Integrated Business Planning and Corporate Social Responsibility

In the application of integrated business planning, it’s important to consider its impact on a corporation’s social responsibility (CSR) practices. Integrated business planning has direct implications, as it can form a strategic platform for organizations to proactively manage their social and environmental responsibilities, in addition to driving financial performance.

When considering a business’s social and environmental responsibilities, it’s clear that these elements can significantly influence planning processes. This is because businesses, especially those operating in sensitive sectors such as mining or manufacturing, must account for the potential social and environmental impacts of their operations.

Effect on Planning Process

Understanding this, the planning process under an integrated business planning model needs to not only focus on traditional economic factors, but integrate CSR into the heart of their business strategies in a structured and systematic way. This might involve predicting potential social and environmental risks and planning appropriate mitigation strategies, or identifying socio-environmental initiatives and integrating them into the business’s operating model.

Asset Utilization and ESG Compliance

Moreover, integrated business planning can allow businesses to better utilize their assets in the service of both financial objectives and CSR. For instance, a manufacturing facility might plan to use more energy-efficient technologies, demonstrating commitment to environmental sustainability, while also potentially reducing operational cost.

Furthermore, a solid integrated business planning can enhance a company’s efforts in Environmental, Social, and Governance (ESG) compliance. It allows the business to consistently align its operational activities and financial planning with its CSR policies and governance standards. This, in return, may improve the public image, customer trust, and overall market reputation of the company.

Aligning Business Goals with Societal Values

Ultimately, a key aim of integrating CSR into the business planning process is to ensure that an organization’s business goals are well-aligned with societal values and environmental sustainability. Doing so not only helps businesses to fulfill their moral and civic duties, but is also increasingly recognized as a powerful driver of long-term financial performance.

Software Tools for Integrated Business Planning

In order to successfully implement integrated business planning (IBP), businesses need to make use of a variety of software tools. These tools not only make the complex process more manageable, but they also increase accuracy, improve collaborative efforts and provide meaningful insights for better decision-making.

Popular Software Tools

One popular tool is SAP Integrated Business Planning (SAP IBP) . This tool is lauded for its real-time supply chain management features. SAP IBP offers features for demand planning, supply and inventory planning, sales and operations planning, and response and supply control.

Another widely adopted software is Anaplan . Anaplan’s platform helps businesses model and visualize their data, and is known for its capability to handle extremely large data sets, making it ideal for large organizations.

Oracle Demand Management Cloud is also worth mentioning. It provides predictive analytics to understand and manage demand, and it integrates well with other Oracle applications, making it an attractive choice for businesses already using the Oracle ecosystem.

Kinaxis RapidResponse stands out for its scenario planning features, allowing businesses to simulate and compare various situations and their outcomes.

Role of Technology in IBP

Technology plays a pivotal role in IBP, simplifying and enhancing the process. With the vast amount of data businesses deal with today, manually managing such processes would be time-consuming and prone to human errors. Software tools automate most of these tasks, ensuring accuracy and efficiency.

Moreover, these tools often provide data visualization features, converting complex data into easy-to-understand charts and graphs. This not only makes data more accessible to all stakeholders, but also aids in quicker decision-making.

One significant advantage of using these tools is the ability to collaborate in real-time. Multiple users can work together on the same data sets, breaking down silos within the organization. With everyone on the same page, the alignment between different business functions improves, boosts the overall business performance.

Lastly, with features like predictive analytics and scenario planning, businesses can better anticipate future scenarios and prepare accordingly, reducing the risk associated with unforeseen changes in the market or supply chain.

Thus, with the help of software tools, integrated business planning becomes a more streamlined, accurate, and collaborative process.

Implementing Integrated Business Planning

Essential considerations for successful implementation.

To ensure a successful transition to using integrated business planning, several key aspects must be considered.

Employee Training

A central aspect of this change-over is the training of employees. Your employees need to understand the principles of integrated business planning and how they can apply these principles in their day-to-day activities. This training could be delivered through workshops, seminars, or e-courses, depending on what’s most effective for your employees.

Ongoing mentorship and support are also beneficial, helping employees adjust to the new system over time. By providing continuous learning opportunities, you keep your employees engaged and motivated, thus enhancing the adoption of integrated business planning.

Technological Requirements

The transition to integrated business planning is not only about changing mindset, but also about updating your technology stack, as this approach often relies on advanced software solutions. The exact technology needed may vary depending on the scale of your business and the nature of your operations, but a comprehensive business planning software suite is usually a baseline requirement.

Additionally, you would need to evaluate your current IT infrastructure to check if it can support the new systems. It might be necessary to upgrade certain components to ensure seamless operation. Remember, your new software should be user-friendly to promote ease of use among your employees.

Embracing Cultural Change

Implementing integrated business planning can bring about a significant shift in your company culture. As an approach that emphasizes collaboration and transparency, it requires a shift away from organizational silos. Employees at all levels need to get used to sharing information and making collective decisions.

Promoting this cultural shift can be challenging. Clear, effective communication will be crucial. Explain the advantages of the new system, engage employees in the planning process, and make sure everyone understands their responsibilities. Celebrating small victories can also help to promote positive feelings towards the change.

By paying attention to these critical aspects – employee training, technology, and culture change – you can lay the foundation for a smooth transition to integrated business planning.

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Integrated Business Planning (Advanced Sales & Operations Planning)

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.  

What is Integrated Business Planning  

Integrated Business Planning is a decision-making process to align strategy, portfolio, demand, supply, and resulting financials through a focused and exception-driven monthly re-planning process.   

The result is a single operating plan, over a 24+-month rolling horizon, which senior executives hold themselves and their teams accountable for achieving.    

Done well, it is the formal way that the business is  managed,  and strategy is connected to execution. Integrated Business Planning eBrochure

How We Help    

Prior to joining Oliver Wight, our  team of experts  led IBP implementations where they were employed. They know what it takes to  develop an effective IBP process .  They also know how to utilize IBP to drive business and financial results.   

We offer the following  IBP  services:  

• Advising, coaching, and mentoring on how to utilize the process to drive results  
• Education and workshops to further understanding of best practices  and how to design the process
• Diagnostic and progress assessments to identify needed areas of improvement . These assessments  address  executive decision-making,  people skills and behaviors, process, and  information that supports IBP.

Value of  Integrated Business Planning

IBP connects company functions and executive teams so that they are operating to one aligned plan. That means the business  plans  and strategies are executed with  no surprises at year-end.  

With a ligned innovation, demand, and supply plans ,  companies grow sales revenue  while at the same time  lowering operating costs . Companies realize more opportunity in the marketplace and an increase in market share by streamlining these plans. The supply organization better anticipates capacity needs, which  improves its ability to fulfill orders on time.   

M ore credible information  is  given   to  the  Board and The Street.  That builds   trust  that the leadership team   will  deliver on their promises and goals.  

What Clients Say    

“Because of the way the process allows us to look ahead and be proactive, we can also see billions of dollars of opportunity cost savings way into the future. Our ROI will be measured in billions of dollars every year for the next decade.”   Jim Dwyer, U.S. Army Materiel Command –  US Army Materiel Command  success story    

“The IBP Management Business Review is one of the most valued activities for me. In ninety minutes, each month, we gain insights on the business challenges. We get visibility of gaps and how to close them. It helps inform me of the risks and opportunities in the business. It’s how we make sure we’re being responsive to customers and driving growth in revenue and profits.”  Tom Pigott, Chief Financial Officer, Marzetti and Lancaster Colony Corporation –   Marzetti  success story  

Insights on  Integrated Business Planning  

Integrated Business Planning – eBrochure

White papers    

Webcasts and Videos  

• How do you plan for something that you can’t predict? Lessons from Coronavirus  
• Should you throw  out  your Integrated Business Planning process in the current environment of uncertainty?  
• Integrated Business Planning Is Key to Making Annual Planning a ‘Significant Non-Event’  
• Hello Finance – Are You Engaged?  
• Hey CFOs – Are You Seeing the Right Stuff?  
• Getting Executives Out of the Weeds to Focus on the Business  
• Three Powerful Traits of Large, Successful, Consumer Goods Companies  
• The Three Key Challenges That Middle-Market Businesses are Facing  
• How To Leverage Millennial Traits Through IBP  

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Integrated business planning solution.

Integrated Business Planning (IBP) is a complete planning process from EY and Pegasystems that drives efficiency and accuracy by providing visibility into key business functions and aligning them around a single strategy.

Making complex planning simpler and smarter

Proper planning for a business’s growth and needs requires that all facets of an organization have access to one source of truth—one vision, one plan, and one set of numbers from which to plan. 

The Integrated Business Planning (IBP) solution from the EY-Pega Alliance helps organizations meet their most complex challenges through a comprehensive approach that combines EY’s process improvement and business transformation acumen with the speed to value supported by Pega’s intelligent automation platform. EY-Pega IBP identifies the overall business process, finds where relevant data resides on all systems of record, then distills that information into meaningful content that guides smarter decisions. Benefits include a faster system of planning that provides better-quality data, as well as greater transparency, synchronization, collaboration and responsiveness across the organization

The EY organization’s methodology for approaching IBP, combined with the powerful Pega platform, allows businesses to realize value on an accelerated timeline – in many cases, a matter of mere weeks. That baseline of value can be established and then spread. That’s because the EY team’s approach is to break IBP into multiple stages, using Pega capabilities to provide incremental value quickly and build upon it, rather than backloading business benefits to the conclusion of a lengthy implementation. 

Further, EY-Pega IBP doesn’t require discarding an organization’s existing tools, whether it be the demand optimization system or sourcing management system. Instead, organizations can “wrap and renew” as Pega leverages the data from existing tools that may be siloed to provide a more consistent, effective method of planning. Planning documents from spreadsheets or legacy systems can be pulled, parsed and processed in a more meaningful way.

With IBP, businesses can achieve tangible results derived from the ability to:

• Enable change with hands-on coaching and accelerators
• Transform processes with reliable tools
• Integrate finance to achieve a single aligned plan
• Mitigate short-term disruptions 
• Challenge the mentality of “the way we used to operate”
• Complement organizational capabilities
• Leverage digital planning technologies
• Drive effective planning with analytics

Ultimately, the better business decisions enabled by EY-Pega IBP can help organizations improve revenues as they get more product to their customers, decrease production and supply chain costs, and better manage their suppliers so that they secure reduced inventory cost and the proper amount of product they need. Complex planning becomes simpler, faster, better and smarter. 

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Designing an integrated planning process to embed comms across your organization

How Thrivent CCO Greg McCullough led a modernization of the comms function that positioned the team as a catalyst for enterprise business transformation and growth.

When Greg McCullough was named Thrivent’s first-ever CCO in 2022 to lead a transformation and modernization of the comms function, he knew that upskilling the team would be a fundamental first step along the road.

Working directly with Thrivent CEO Terry Rasmussen to understand the needs of the business, McCullough recognized that adding new capabilities through modernization was a priority. Several focus areas were important for successful modernization:

• Foundational education on various communications disciplines. Starting with a baseline understanding of roles, how those roles met business needs, and how those roles could work together in an integrated way to produce greater impact was essential as McCullough worked to unite previously siloed comms teams and functions. “Each of our teams – including PR, internal communications, executive communications and more – spent time together in immersive workshops to explain their work to colleagues and examine how to work together effectively as a team,” he said.
• Understanding org-wide strategy and objectives. Understanding these things allowed the comms team to begin developing goals, strategies and metrics that connected back to larger business priorities. “ The focus on strategic planning required us to learn how objectives, goals, strategies, and plans are created, and why they are important and why they need to connect – from the individual communications role up to the C-Suite,” explained McCullough.
• Upskilling around audience segmentation, listening and strategic planning. “We dug into data on our audiences to understand who they are, how they work, what they need and how we can most effectively communicate with them. This audience-based approach required us to think differently and work with our cross-divisional partners and executive leaders differently. We had to become consultants – not only recommending the best communications strategies and tactics, but pushing our internal leaders and teams to think through outcomes of communications and develop a 360-degree stakeholder approach.”
• Tapping tech platforms. Upskilling was accelerated by using new technology platforms to train the team, and investing in new talent to ensure the team was set up for success. “We hired a senior product owner, for example, to help us use technology to better reach and engage our employees – and implement new technology solutions with our audiences in mind.”

Rising to the charge of consolidating siloed comms teams into a cohesive, strategic unit, McCullough now frames communications as a team sport “where we work and accomplish more together and focus with intensity on integrated planning as the superpower that we can bring to the broader organization.”

Understanding that this integrated planning process was new to everyone on the team, McCullough saw an opportunity for everyone on the team to learn together. Putting together a process map with everyone’s specific roles and responsibilities, then training the team on how it informed the integrated planning process, provided a tangible blueprint for how to work together.

“Once we defined the roles and processes, we asked for volunteers and picked six important projects to pilot the new integrated planning process – training the leaders of the six projects on the process and supporting as the work shifted from strategy to execution in the integrated teams,” McCullough explained.

The pilot produced enough compelling insights and measurable improvement in results to share with the wider comms team and get colleagues on board with working that way in the future. Leadership was pleased to see that the results of these project pilots—which included everything from readership and audience engagement to partner feedback—were overwhelmingly positive. Moreover, the results showed the value of the integrated planning process.

“It was encouraging to see that the results of the pilots – from the readership and audience engagement to the partner feedback – was overwhelmingly positive and it helped show the value of working together in a new way.”

Driving collaborative behaviors

By thinking about promoting cross-organizational collaboration as a behavioral change, McCullough and his team were able to focus on actions like the sharing of knowledge, resources and insights that ultimately promoted a holistic communications approach.

“We had to encourage open, ongoing dialogues about projects, goals, and strategies, and be willing to provide and receive feedback from colleagues across different departments,” McCullough explained. “Working in an integrated manner requires transparency in actions, decisions, and outcomes. It involves openly sharing successes and failures, learning from both, and holding one another accountable for the results of the integrated communications efforts.”

Setting a precedent with new hires

Setting these expectations when hiring and onboarding talent was crucial. Ten new employees have joined the Thrivent comms team since the rollout of this integrated planning process, and McCullough has set an expectation that they are expected to develop strategic comms capabilities while maintaining a client focus.

The team has embraced the effort to raise expectations in its talent management strategy:

• Defining clear expectations of each role. “ We start by clearly defining roles, including both the technical capabilities required and the service-oriented competencies expected,” McCullough said. “We highlight the importance of a service mindset, personal ownership and accountability for results, and integrated planning in the job description and how it intertwines with communications responsibilities.”
• A structured interview process. “We built an interview process that evaluates both technical skills and soft skills, using behavioral interview questions to assess how candidates handled scenarios in the past.”
• Incorporating practical assessments. Including practical assessments during the interview process that simulate real-world communications challenges and client interactions has also proven successful. Thrivent asks all candidates to share past examples and requires a writing component, too.
• Involving multiple perspectives. “We include team members from various roles in the interview process, selecting employees who will work closely with the new hire so they play a role in selecting new talent,” said McCullough.

Integrated planning in execution

The integrated planning process has proven successful for a number of projects, including the creation of Thrivent’s signature “Live Generously” t-shirt, which clients and friends can earn by participating in volunteer projects. “Each year, we ask our members to vote on the new t-shirt design,” McCullough explained. “It’s a fun engagement moment for our team and clients.”

Building an integrated plan for the t-shirt campaign with communications and marketing last year included a feature story on Thrivent’s intranet that highlighted the history of the shirts and shared new design options for the year. A client-facing version of the story spoke to the impact that the t-shirts have made on the community over the years. An earned media push even brought wider coverage of the t-shirt voting campaign to wider audiences and included a feature on CBS News:

“The results were strong. Our integrated planning, our willingness to ask ‘what if’ and try creative new ways to tell the story of a fun annual tradition at Thrivent paid off. We got results that we hadn’t achieved before,” McCullough said. “We drove strong engagement with more than 25,000 votes for the new shirts, and drove 1,000 new visitors to Thrivent.com, and instilled pride within our workforce.”

Other metrics prove this integrated communications model, which has been applied to allf strategic initiatives at Thrivent, is working. The team implemented an important new tool to measure the clarity and impact of its comms internally, and  found that results were at or above the industry benchmark on all measures.

“Rather than just measuring clicks, opens and likes on information about company strategy, we’re asking our colleagues if they understand the strategy and can link their work to it. It’s a higher standard of accountability and it gives us a baseline to measure our improvement in future years,” McCullough said.

Additionally, Thrivent found:

• 98% of enterprise leaders said that they understand how their work supports Thrivent’s strategy.
• The corporate intranet, a key comms platform, saw a 226% readership increase in 2023.
• Partner feedback has been overwhelmingly positive. “We can show executives and partners one integrated communications plan instead of separate tactics, and they better understand and appreciate the cohesive communications strategy,” McCullough said.

Bringing clarity to the org chart

Thrivent’s integrated planning process demonstrates how a strategic initative led by the comms team can ultimately create visibility for roles and responsibilities across the org chart. As always, bringing that clarity starts at the top.

“Part of our communications team is accountable for providing great client service to our Executive Leadership Team – and we needed to clearly define the role for both our ELT members and our communications directors,” McCullough explained.

“We aligned on clear roles and responsibilities, including what’s in and out of scope for the work to be done, and we use it to onboard new communications leaders and also to set expectations with our executives about what support will be provided.”

Beyond the needs of the business, McCullough sees how this effort boosts the employee experience too, as working cross-functionally boosts professional development.

“You get exposure to what other experts in our company are working on, and learn how work fits together and begin to see the bigger picture,” he said, explaining that an integrated comms environment also exposes people to communications work they might not have previously understood such as corporate communications, media relations or digital marketing.

“This broadens their skill sets and prepares them for a wider range of responsibilities in the future.”

McCullough’s main takeaways:

• Cross-functional upskilling is more cohesive . Taking a cross-functional approach to collaboration, project management and integrated comms planning ensured that comms goals were consistent and aligned with the organization’s goals. “This holistic view encourages strategic thinking and can lead to more innovative and effective communications strategies and increased team engagement,” McCullough said.
• The integrated approach drives impact . “We have consistently produced greater impact and clarity of understanding among internal external audiences,” he continued.
• Working cross -functionally supports professional development. “You get exposure to what others are doing, learn how work fits together and train people to see the bigger picture,” said McCullough, explaining that an integrated comms environment also exposes people to communications work they might not have previously understood such as corporate communications, media relations or communications technology. “This broadens their skill sets and prepares them for a wider range of responsibilities.”

Thrivent shared more insights with fellow members of the Ragan Communications Leadership Council . 

Justin Joffe is the editorial director and editor-in-chief at Ragan Communications. 

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Moscow's High Rise Bohemia: The International Business District With No Business

• Written by Dario Goodwin
• Published on March 17, 2015

The Moscow International Business Center (Also known as Moskva-City ) was meant to be Russia ’s ticket into the Western world. First conceived in 1992, the district at the edge of Moscow’s city center is intended to contain up to 300,000 inhabitants, employees and visitors at any given moment and, when completed, will house over 4 million square meters of prime retail, hotel and office space to create what the Russian government desired most from this project: an enormous financial district that could dwarf London’s Canary Wharf and challenge Manhattan . Twenty three years later though, Moscow-based real estate company Blackwood estimates that as much as 45% of this new space is entirely vacant and rents have plummeted far below the average for the rest of Moscow. The only press Moskva-City is attracting is for tenants like the High Level Hostel , a hostel catering to backpackers and other asset-poor tourists on the 43rd floor of the Imperia Tower , with prices starting at $25.50 for a bed in a six-person room. This is not the glittering world of western high finance that was envisioned back in the post-Soviet 90s; but what has it become instead?

As one might expect from a project of this sheer ambition, Moskva-City has a troubled past. The economic crash in 2008 hit Russia hard enough to evict the previous Mayor of Moscow , Yuri Luzhkov, who had been a cheerleader for the district, and replace him with the considerably more austere Sergei Sobyanin, who famously declared that the whole idea was an “urban planning mistake.” But as recently as 2013, the Wall Street Journal was triumphantly claiming that Moskva-City had risen from the dead, citing 80% occupancy rates and glowing quotes from industry insiders claiming that Moskva-City was the "place to be." Driven by record highs in oil prices, Moscow looked poised to become the next Dubai .

Instead, Moscow is now in the grip of an economic winter prompted by western sanctions and drops in the price of oil. The large financial groupings that Moskva-City was meant to shelter have been warned off by their inability to issue credit to international markets, for example - but Moskva-City isn’t just an Empire State Building left empty by the Great Depression.

A fundamental problem that is holding Moskva back compared to the rest of Moscow is the simple fact that currently, getting to Moskva-City is nigh-on impossible at peak hours. Moscow has long been plagued with transport problems, ever since the government failed to match the dramatic expansion of the city with a dramatic expansion of the transport system after the Second World War. Despite being only 2.5 miles from the Kremlin , Moskva-City is only just inside the ring road that bounds the city center and which acts as the only real transport link to it (and as a result, is clogged by construction vehicles.) A railway and metro hub has been finished, but so far only runs a one-stop shuttle service to the closest Metro station that is actually integrated with the rest of Moscow Metro. The isolation of the outer districts is a large, negative part of the Moscow psyche, and it’s not surprising that this is driving away the globetrotting financial elite this project was meant to attract.

The project is managed by architectural practice No.6, which is a constituent part of the large Moscow based practice Mosproject-2 , which is itself a public corporation headed up by Mikhail Vasilyevich Posokhin, who is apparently the “People’s Architect of Russia.” Despite all this state involvement, the project has still managed to become bogged down in bureaucratic infighting - each lot is managed and developed individually, which has led to developers competing for occupants by slashing rates.

Much has been written about the way modern financial districts and towers that inhabit them can be unwelcoming, forbidding or even hostile by design, but the skyscrapers of Moskva-City seem even less friendly than usual. The site - a former stone quarry, chosen out of necessity as the only place in the city center where a new district could be plausibly constructed - is isolated both physically and visually, leaving the cluster a stark anomaly on the city skyline. Even the names seem more imposing than optimistic now: Imperia, City of Capitals , Steel Peak.

The Mercury City Tower , so far the tallest completed building on the site, is officially “a strong reference to Russian constructivism, [which] gives the tower a strong vertical thrust similar to the one found in New York's Chrysler building .” It would be easy to criticize the Mercury City Tower for picking ‘inspirations’ that are so totally opposed to each other - The Chrysler building the defining emblem of American pre-crash confidence and Constructivism created with the express purpose (especially architecturally) of extending the Bolshevik revolution into a social revolution - but the way they smash those two inspirations together is almost beautifully ironic.

Even though the High Level Hostel is less an asset to a financial district than it is a PR problem, it’s been a huge success since opening in September, already ranked 27th out of 766 hostels in Moscow by TripAdvisor. According to the management agency for Moskva-City , 58% of the new occupant signings this year have been non-financial, including a number of small to medium size businesses. Other areas of office space have been occupied by a restaurant and a culinary school, while another space has been redeveloped into a 6,000 seat theater.

While Moskva-City is failing to be a financial district that could take on the world, it’s inadvertently becoming a humanized space catering to the very groups that the Russian economic miracle left behind. Taking advantage of rents lower than the rest of Moscow , the world class facilities and the sheer desperation of the developers, the humanization of Moskva-City could well create the world’s first high-rise bohemia.

Of course, these are not spaces designed for a community, or even for people: these are spaces designed for money, and there’s little scope for changing something that seems so baked into the design of Moskva-City . The High Level Hostel is trading off of the irony of being a hostel in a banking tower, but it’s perfectly possible that at some point people will no longer find this joke funny (especially in a building that seems hostile to the very idea of humor). The isolation of Moskva, even though it allowed this community to spring up in the first place, is just as detrimental to a humanized district as it is to a financial one: even bohemians need to move around the city, or the district risks becoming a black-spot instead of a hot-spot.

Moskva-City’s isolation won’t last forever. The end of construction will open the roads up to traffic, and plans to properly integrate the spur lines of the Metro in this area into the wider system are well under way. The integration of the district will inevitably push up rents, and the Russian economy will eventually boom once again. When that happens, Moskva-City is prime territory to be reconquered by the giants of international finance, and it seems unlikely that the municipal or national governments would want to step in to protect this accidental district. For now, though, the towers capture perfectly this moment of Russia ’s schizophrenic understanding of its place in the world.

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