Why Integrated Business Planning Works So Well

The traditional business works with a segmented model in which different functions operate in their environment and share an overall roof with each other. As a result, the historical company would have a manufacturing group, a marketing team, an HR office, an accounting room, and sales team, and a research office.

Each group ran on their own steam with only the executives coordinating their functions in something of a team effort. No surprise, that kind of model developed politics, favorites, winners, and losers. It also tended to hamstring companies as they grew big, creating layers of bureaucracy intended to control the functions within a given area.

Knocking Down Walls

Integrated business solutions operate with the idea that segmented functional walls don’t exist. In other words, the marketing planner is just as involved in the research and development of a prototype as the research is with seeing a design come to fruition in manufacturing, production, and so on. Everyone has a vested interest in what everyone else is doing within the integrated approach. Granted, this is not easy to pull off; it works against the normal human tendency of like to clump up with like. However, the differences it produces in performance, output, and business flexibility to change are immense and powerful, and no better seen than in the logistics world where integrated business flows come into their own.

Putting the Ideal of Teamwork Into Action

A professional integrated business planning approach helps a company realize value by aligning multiple functions into a single cohesive action approach. Strategy, tactics, procedures, and operations all work in tight formation under the approach because everybody involved is working with the same information and data at the same time. That allows various aspects of a company to be highly responsive as well as in tight communication with leadership versus hearing diluted directions through political channels.

Planning Begins to Make Sense At Every Level

Because integrated business planning works with a comprehensive perspective for all involved, it makes the process of annual planning and long-term planning far smoother. Traditionally, programs jockey with each other for limited resources and prioritization of their interests within the company. That puts leadership in the ugly spot of choosing winners and losers, as well as politicizing the management team. With an integrated approach, the company works cohesively as a team at every level; they have a vested interest in seeing the entire group succeed, as they depend on each other for information, data and performance. Without the team perspective, the entire operation falls behind and can only blame itself instead of pointing fingers elsewhere. Project-oriented teams have consistently proven this model to be far more effective, both in business as well as in psychological research.

Responsiveness on a Dime

The ability for a large organization to respond is well understood to be slow, under the traditional business model. Top-down direction control, bureaucracy, and delays in communication often cause companies to be like moving a giant tanker in the water. It goes straight pretty well but making a turn takes forever. With an integrated business platform, however, a company’s units and functions can switch gears and shift on short notice. Communication moves lightning fast, and managers can respond at the moment within expected parameters as their conditions change. Everybody sees the same information instead of things getting lost in translation. That produces far better flexibility and nimbleness in the face of fast-moving markets.

Logistics for the Modern Age

Traditional business logistics generally have a supplier receiving an order, produce the goods, ship them, and then an overflow arrives at the manufacturing point, taking weeks or months to burn down. In the meantime, the company is stuck with a sunk cost that has to be borrowed to be funded until sales make up the difference and hopefully a profit. With integrated business channels, logistics give Just in Time a run for its money as consumption, production, and sales are updated daily or even hourly on their data, triggering the others to adjust accordingly. Suppliers are talked to and expected to fulfill as demand pushes and slows, requiring their integration as well. The results are a cost operation run tightly to efficiency, less waste and loss, and far greater maximization of sales on goods moving from manufacturing to retail.

Integrated Business Planning for Digital Advantages

There’s no question that digital business has forced companies to rethink how they operate and function. The time windows businesses enjoyed from production to retail have compressed significantly, and competition is fierce. As a result, integrated business planning is a must for any company looking to maintain a large operation in a fast-moving online market. Not doing so simply means falling behind, sooner or later.

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