Are you wondering how you can ensure Integrated Business Planning (IBP) will work for your organisation?
IBP put simply is about providing a clearer view of the future so your organisation is able to stay ahead of the curve, make plans with the confidence and make effective decisions if things change and ultimately, keeping ahead of your competitors.
In today’s complex and competitive business environment it is more important than ever for organisations to keep improving performance and strive for business excellence. Unfortunately, it is quite common when implementing business improvement programmes for organisations to jump head-first into tackling their processes and tools, completely overlooking the fundamental importance of people and behaviours. It is crucial they first understand that people are the key drivers in any change management process and that success depends on the organisation’s ability to cultivate the right environment for change.
For the best possible performance, it is essential to achieve the perfect balance between people and behaviours, processes and tools. Hitting what we call the ‘sweet spot’, where these intersect, is fundamental to facilitate lasting change. A business must address all three in equal measure and in the correct sequence, which means people first. As previously stated, many organisations fail from the get-go by attempting to master processes and tools first and then looking to align their people, but this creates ‘people-dependent processes’. Wherever there is an over dependency on people, there will be variation which is likely to lead to error and fire fighting issues that could have been avoided. The improvement programme inevitably fails with a tendency to blame the systems and tools.
Figure 1 shows the interdependency of people and behaviours, processes and tools and the sweet spot in the middle where they meet. For IBP to be successful, it is necessary to work anticlockwise around these core components; processes must be designed to meet the needs of the company and aligned to people and behaviours (after education and training has taken place); tools can then be better specified and aligned to processes, advancing the benefits to be derived from IBP by allowing the software to deliver required information back to the decision-makers in the most effective way.
You cannot expect an Integrated Business Planning process to work if one of these elements isn’t performing; each component is vital to the successful deployment of IBP. Get it right and you can expect to see smoother operations resulting in smarter buying, better advanced planning, stronger relationships with suppliers, increased product availability, lower inventories and reduced logistics costs; not to mention a better reputation as a business and perhaps most importantly, growth and improved profits.