Business Planning in the Digital AgeHow a highly integrated and real-time approach will elevate a select few firms to future market dominance.
Jacques Le Ny, Jonquil Hackenberg May 2017
As we advance into a new age of disruptive digital technologies, the rules and ways-of-working that we have been so accustomed to are being quickly re-written, thus drastically changing the business models of some of today’s most established companies. As a result, we are witnessing a seismic shift in the organization.
One of the key challenges executives face head-on is how to harness disruptive digital technologies and convert them into business opportunities – and ultimately drive competitive advantage. One element will remain constant for executives – the need to predict, plan and generate profit for the organization.
Evolution of Planning Capabilities in the Enterprise
Corporate planning systems have evolved over time from basic, manual planning models and early spreadsheet-based systems, to increased levels of optimization such as MRPII.
The common characteristic of this evolution up to now has been the elimination of barriers between planning data and transitional data, powered in large part by the shift to seamless technical integration, in memory planning and cloud computing. In the near future we will see another transformational barrier being achieved: the convergence between physical world, real-time information and transactional/planning systems.
This evolution will allow for even more rapid response to business changes, more complex and relevant planning models and further integration between sales, operations and finance to analyze and show the real value drivers for the business. This will have profound meaning for the C-suite.
One of the key challenges executives face head-on is how to harness disruptive digital technologies and convert them into business opportunities.
Integrated Business Planning Maturity Model
With the rapidly changing technology landscape, only a select few best-in-class organizations have been able to fully take advantage of the latest capabilities. Based on our experience through a number of advisory engagements, it’s our view that most organizations today rarely achieve a level of maturity higher than a robust S&OP model, with some level of integration to the financial results, when it comes to their business planning processes.
Aware To Developing
- Companies progress from disconnected management processes with few aligned metrics to monthly S&OP standardized processes with formal reviews, decision making forums and scenario planning.
- New disciplines are introduced: decision making process on a 3-6 month horizon, standardized rough-cut capacity plans, monthly production schedules, as well as new tools and reports.
- Typically a single ERP is connected to the planning system, along with tools for forecasting, SC planning and inventory optimization.
Progressive to Leading
- Companies focus on integrated planning between previously siloed areas, especially functions such as sales and marketing. This is a huge step change – it’s here where a collaborative approach delivers true enterprise value, affording all departments’ access to the same data, thus closing the divide between finance and the supply chain.
- In this level we see a high degree of optimization by scenario planning and modelling, continuous integrated reconciliation, and risks modelled and mitigated through established processes.
- Businesses achieve a high level of maturity when IBP framework is boosted with best-in-class artificial intelligence (AI) for full automation and integration.
- From a supply chain planning perspective, the following will be possible: Real-time visibility of demand and inventory, intelligent alerts, algorithmic planning, live data dashboards, multi-level visibility and planning for risk-adjusted inventory optimization.
- Flexibility factors – service levels, costs, time, and quality – as well as inventory synchronization will be evaluated by advanced auto-decision support, simulation models and analyzers.
- Key enablers will revolutionize the planning process, such as sensor-based solutions, production detectors to control energy usage, smart devices to monitor transportation, and sustainability models to analyze and monitor usage impact.
Market Leadership is at Stake
The complexity and speed of the market is forcing companies to have an ultra-fast, highly responsive and deeply integrated approach to business planning to stay competitive and deliver growth. To respond to these new realities and market dynamics, a live supply chain running on real-time data will enable companies to plan, predict and act at the speed of the marketplace.
A conscious move towards embracing integrated business planning will see companies move ever closer to cross-functional collaboration, creating a cycle which sees finance, sales, purchasing, engineers, production, and senior management teams working alongside each other with accurate and live information to power decision-making. Firms that adopt this approach will thrive and win. The ones that lag behind will likely be rendered obsolete.
The complexity and speed of the market is forcing companies to have an ultra-fast, highly responsive and deeply integrated approach to business planning to stay competitive and deliver growth.
Jacques Le Ny
Partner – Advisory practice
Jacques is a 25-year industry veteran in consulting and a recognized expert in supply chain transformation. He has been in various leadership roles for Infosys Consulting over the past 7 years, and currently heads up the firm’s new advisory practice, which is focused on a range of services helping the C-suite transform their business. Prior to Infosys Consulting, Jacques had significant operational experience in logistics and systems design. He was also a program director for major business transformations programs in consumer products and pharmaceuticals. He is a special contributor and subject matter expert to this paper.
Partner – Supply Chain practice
As partner and UK supply chain practice head, Jonquil defines the go-to-market strategy for digitally-focused market offerings – and leads strategic change and complex supply chain transformation programs for the CPG and manufacturing industries. She is passionate about people, ardent about leadership and about developing high-performing teams with a sense of purpose, internally leading all coaching initiatives for the UK. As an educationist, she is committed to learning and growth – reflected in her part-time role as a lecturer at Beuth University, Berlin, and in her authorship on sustainability and renewables in Industry 4.0. She possesses an MBA from Beuth University and is fluent in German, English and Spanish. She is a special contributor and subject matter expert to this paper.
Marco De Abreu
Senior Principal – Supply Chain practice
Over the past 25 years Marco has advised senior industry executives in developing and translating business strategy into value-driving solutions and results. He has managed global business transformation programs and large scale international ERP implementations for a broad range of industry sectors. Marco holds an industrial engineering degree with a specialization in business optimization. He is the co-author of this report.
Principal – Supply Chain practice
Paula started her career in supply chain and has more than 10 years experience across sectors ranging from oil and gas to consumer goods. Her focus is advising clients on best practices and innovation around supply chain optimization, S&OP and operations. She also leads process design and modelling programs, as well as IT solutioning initiatives around business intelligence and data management. Paula has a degree in business and economics, is a certified scrum master as well as CPIM certified in production and inventory management. She is the co-author of this report.