Integrated planning

What is integrated corporate planning?

The core of planning is the engagement of the management with the question of how the set goals can be achieved. The problem associated with mixing the concepts of objective, planning and resource release (budget) is ignored for the moment.

When the management of a company develops goals and strategy for the whole company, then each responsible unit, may it be the division or the function or the legal unit, must work out how these goals can be achieved. This results in subplans. The more interdependent the units are, the greater the need for coordination and alignment of planning premises or planning results, if this is the basis for planning in other areas. Especially between functions this dependency becomes extremely clear. Without sales planning there is no production planning, without production planning there is no logistics and purchasing planning. Integrated planning means that every planner involved in planning has immediate access to every planning premise, every planning result of other planning and can be taken into account in planning. In driver-based planning, it is also possible to link the results of other planners to your own planning using the so-called driver. 

Using drivers and key performance indicators, strategic planning can also be linked to operational planning. In order to establish this connection, the core key figures must be detected based on the business model and the influence of strategic decisions on these key figures must be consistently discussed and documented. Thus these key figures can actually become transmission belts for the translation of strategy into operational control. 

One more sentence on software solutions: In the past, integrated corporate planning at software comapnies was primarily understood as the integration of P&L, balance sheet and cash planning. This is only one aspect of integration.

Where's the charm?

The great charm of integration lies in the coordination of plans and the resulting flexibility in the adjustment of assumptions and developments. 

If everyone makes plans on their own and uses them for coordination, the effort of the adjustments is very large and the frustration potential enormous. In addition, the coordination must take place at the same time, as bilateral agreements require many loops until the overall result becomes iteratively stable. In a world of stable markets, this was often not noticed, as the update of the actual, in golf terms, has already placed the plan on the "green". This is hardly ever the case in dynamic markets.   

Since planning should not be an annoying duty, but rather a conscious examination of the design possibilities in the future, mutual coordination becomes of enormous importance. Only in this way consistent scenarios can be discussed and evaluated in the context of decisions.

We will see that planning activities become much more the focus of management's daily work than it is often the case today. Here, the technical integration of plans and forecasts actually supports communication within the management team. 

What are the success factors for integrated planning?

Anyone who thinks of the success factors of integrated corporate planning usually has software solutions in mind. But as the experienced among you know, the tool is rarely the solution to a problem.

The essential success factor is that you work out the core key figures - both market-driven and performance-driven. Furthermore, transparent documentation of planning premises and goals is essential for everyone. 

The trick is that each planner creates meaningful links to these variables for his area. If this does not happen, then the chain is broken and the planner would have to look into his planning every time a change is suspected and check whether it needs to be adjusted.

Therefore, driver-based planning seems to be the natural twin of integrated planning.

Which approach does the 4C GROUP offer?

The basis of planning is the management model, which task is to make the responsibility for the successful implementation of the business model, corporate goals and strategy transparent to management on a daily basis. Therefore, before developing a planning model, there must also be clarity about these fundamentals.

On this basis, we work with you to develop the content and procedural planning procedure as well as the roles and responsibilities within the framework of planning. Last-but-not-least we also support you in choosing the right planning and reporting platform.

Planning shouldn't be considered good when it turns out to be right! Planning is good when deviations can actually be understood and lead to changed measures that bring the company closer to its goals.