The Future of Business Planning – Top Best Practices for Integrated Business Planning

As we dig deeper into Integrated Business Planning, it is important to focus on some key best practices common to organizations that have created a company-wide integrated method for business planning. This two-part post will cover the top 10 practices that will help evolve an organization’s planning process independent of how holistic or siloed its process, which will translate to corporate agility

1) Annual budgets are not enough, companies need to plan and replan often.

The competitive business battlefield is no different than a real battlefield when it comes to planning; the plan goes out the window when the first soldier steps off the helicopter. Similarly for organizations, on the first day into a new plan it becomes obsolete because assumptions the plan is built on have already changed. To handle this reality, organizations, just like military intelligence must continuously replan.

2) Plan for contingencies through alternate scenarios.

Extending the battlefield metaphor, when the military plan an engagement, they create alternate contingency plans for anything the enemy might throw at them. During a battle, they don’t have the time to create alternative scenarios and evaluate the choices; they need to understand the impact of their decisions in real time. In a business environment, organizations need to create contingency plans so they can understand the impact on potential decisions they will need to make before they need to make them. This is managed in business through alternative scenarios.

3) Systemize the planning process (using Excel doesn’t count).

Companies typically have a very good understanding of their business model the challenge is a lack of systems that can create and manage the models and lack of system and model integration across the enterprise.

4) Create rolling forecasts.

It is important for organizations to have clear and consistent visibility into the future (and alternate futures as identified in best practice 2). Organizations need to create a constant time horizon of 12 to 18 months and add future quarters as time rolls forward.

5) Focus on the big picture when planning; don’t get bogged down in too much detail.

It is easy for plans to get bloated with too much detail in “non-at-risk” areas. To help focus on the right amount of detail, keep the 80/20 rule in plain sight. That is 80% of the “at risk” areas are in 20% of the items being planned. To help implement the 80/20 rule, focus on reviewing the overall economics of the plan and not the line items.

I hope that you’ve found these tips for implementing an integrated business plan useful. Be sure to come check back in a few days for five more best practices.