The Next Step for S&OP: Integrated Business Planning
By john.bermudez on Sep 30, 2009
The Gartner Group defines the Integrated Business Planning as the "reconciliation process that closes the gap between [business] strategy and operations." In most corporations, even those with good ERP implementations, planning is done at the department level and often depends on emails and spreadsheets to bridge these departmental planning systems. This leads to disconnects and gaps across different departments. Finance sets revenue and profit goals with little validation from Manufacturing that the company has the resources, material, capacity, or demand to reach these goals. On the operations side, Manufacturing is developing plans that attempt to balance demand and supply with little visibility to whether the resulting "plan" will be meet the budgets on which the company's revenue and profit goals are based. Sales is caught someone in the middle agreeing to meet the Finance's revenue goals without a complete understanding of what manufacturing can deliver.
Oracle Integrated Business Planning is designed to bridge the gaps in corporate planning systems. Oracle Integrated Business Planning integrates the financial planning provided by Hyperion Planning with operations planning provided by the Oracle Sales and Operations Planning solution. This means that revenue goals and budgets are validated against a bottom-up operating plan provided by Oracle Sales and Operations Planning. In turn, the operating plan is reconciled against financial goals from Hyperion Planning. Planners making detailed changes to the plan can immediately see the big picture impact of the changes. Significant differences between the current plan and goals can be escalated to the Executive Sales and Operations Planning Committee for resolution.
Oracle Integrated Business Planning also addresses one the CFO's big concerns--the reliability of the revenue forecast. In Oracle Sales and Operations Planning, plans are updated daily or weekly from a precise forecast based on current market conditions. This updated plan is published to Hyperion Planning so that financial analysts are working with data that best represents what is going to happen - not what they projected would happen beased on last quarter's data.
Oracle Integrated Business Planning means the whole company is operating to one, current and accurate plan. In these tough economic times, the plan may not always indicate that all goals will be met, but company executives will have the critical information they need to chart the best course of action in a turbulent market place.
For more information on Oracle Integrated Business Planning, listen to this informative pre-recorded webcast.