The integrated planning approach describes a cross-functional process. It ensures that the subplans of all business areas of a company are brought together and coordinated. The results are a higher transparency within the company, higher relevance and quality of the planning results as well as increased efficiency across the organization.

The classic planning approach is functionally controlled and linear. From finance to sales planning to sales – different functions flow into the planning process. These functions form separate groups with their own processes, which are usually not linked to each other. Each business unit creates internal plans with its own KPIs. In some cases, completely different systems and data sources are even used to create them. Consequently, there is no single, centralized data source.

Several planning versions and long planning cycles are the result, as the different business areas plan in isolation from each other. As a result, a lot of time is spent reconciling the figures and putting the pieces of “the big picture” together

Increasing need for better reconciliation

With the increasing complexity of the market environment and increasing competition, a decentralized planning system is becoming an ever-increasing problem. A coordinated approach by all parties involved is one of the greatest challenges facing controlling today. After all, finance teams create budgets – and planning teams use this information as the basis for their work. Design teams identify new trends and sales teams strive to meet the evolving needs of their customers and partners.

In many companies, important information is often stored in silos and the different business units operate independently of each other. As a result, growth targets can only be tackled vaguely, and new opportunities and possible risks remain unrecognized or untapped.

Better alignment with goals

Integrated planning ensures alignment with a company’s most important goals. It ensures that all functions are coordinated and can work as quickly and efficiently as possible. This requires good forward planning, clear roles and responsibilities, and a coordinated schedule.

For example, an integrated planning approach can be aligned with the following business objectives:

  • Planning growth categories
  • The direction of innovation development
  • Use of digital channels
  • Achievement of liquidity targets
  • Achievement of margin targets

Advantages of integrated planning

In contrast to classic planning, integrated planning is:

  • Iterative and not linear: Instead of waiting for the handover between the teams, the different views of decision-makers in the company flow together in order to continuously develop and refine the plan.
  • Collaborative and not isolated: Instead of isolating the different parts of the plan, cross-functional groups come together to exchange information and make important decisions together.
  • The process is coordinated and not inconsistent: There is no need to prepare the figures provided by one group for another because key metrics based on common definitions and a common data source are aligned across all planning groups.
  • Strategic and non-reactional: Plans and decisions are made based on the overall picture and support the mid- and long-term business strategy, including information from across the enterprise.

Integrated planning brings all business areas together in the planning model and process and identifies drivers and dependencies of the planning outcome. It also enables the analysis of “what if” scenarios and a faster response to changing market conditions and customer needs. It enables all business units to work together towards a strategy that is aligned with the company’s objectives, while flexibly addressing new opportunities and risks.

Look for our upcoming blog post, “5 Keys to Successful Integrated Planning”, where you’ll learn which factors are critical to the success of your integrated planning process.