integrated business planning example

A better way to drive your business

Managing the availability of supply to meet volatile demand has never been easy. Even before the unprecedented challenges created by the COVID-19 pandemic and the war in Ukraine, synchronizing supply and demand was a perennial struggle for most businesses. In a survey of 54 senior executives, only about one in four believed that the processes of their companies balanced cross-functional trade-offs effectively or facilitated decision making to help the P&L of the full business.

That’s not because of a lack of effort. Most companies have made strides to strengthen their planning capabilities in recent years. Many have replaced their processes for sales and operations planning (S&OP) with the more sophisticated approach of integrated business planning (IBP), which shows great promise, a conclusion based on an in-depth view of the processes used by many leading companies around the world (see sidebar “Understanding IBP”). Assessments of more than 170 companies, collected over five years, provide insights into the value created by IBP implementations that work well—and the reasons many IBP implementations don’t.

Understanding IBP

Integrated business planning is a powerful process that could become central to how a company runs its business. It is one generation beyond sales and operations planning. Three essential differentiators add up to a unique business-steering capability:

• Full business scope. Beyond balancing sales and operations planning, integrated business planning (IBP) synchronizes all of a company’s mid- and long-term plans, including the management of revenues, product pipelines and portfolios, strategic projects and capital investments, inventory policies and deployment, procurement strategies, and joint capacity plans with external partners. It does this in all relevant parts of the organization, from the site level through regions and business units and often up to a corporate-level plan for the full business.
• Risk management, alongside strategy and performance reviews. Best-practice IBP uses scenario planning to drive decisions. In every stage of the process, there are varying degrees of confidence about how the future will play out—how much revenue is reasonably certain as a result of consistent consumption patterns, how much additional demand might emerge if certain events happen, and how much unusual or extreme occurrences might affect that additional demand. These layers are assessed against business targets, and options for mitigating actions and potential gap closures are evaluated and chosen.
• Real-time financials. To ensure consistency between volume-based planning and financial projections (that is, value-based planning), IBP promotes strong links between operational and financial planning. This helps to eliminate surprises that may otherwise become apparent only in quarterly or year-end reviews.

An effective IBP process consists of five essential building blocks: a business-backed design; high-quality process management, including inputs and outputs; accountability and performance management; the effective use of data, analytics, and technology; and specialized organizational roles and capabilities (Exhibit 1). Our research finds that mature IBP processes can significantly improve coordination and reduce the number of surprises. Compared with companies that lack a well-functioning IBP process, the average mature IBP practitioner realizes one or two additional percentage points in EBIT. Service levels are five to 20 percentage points higher. Freight costs and capital intensity are 10 to 15 percent lower—and customer delivery penalties and missed sales are 40 to 50 percent lower. IBP technology and process discipline can also make planners 10 to 20 percent more productive.

When IBP processes are set up correctly, they help companies to make and execute plans and to monitor, simulate, and adapt their strategic assumptions and choices to succeed in their markets. However, leaders must treat IBP not just as a planning-process upgrade but also as a company-wide business initiative (see sidebar “IBP in action” for a best-in-class example).

IBP in action

One global manufacturer set up its integrated business planning (IBP) system as the sole way it ran its entire business, creating a standardized, integrated process for strategic, tactical, and operational planning. Although the company had previously had a sales and operations planning (S&OP) process, it had been owned and led solely by the supply chain function. Beyond S&OP, the sales function forecast demand in aggregate dollar value at the category level and over short time horizons. Finance did its own projections of the quarterly P&L, and data from day-by-day execution fed back into S&OP only at the start of a new monthly cycle.

The CEO endorsed a new way of running regional P&Ls and rolling up plans to the global level. The company designed its IBP process so that all regional general managers owned the regional IBP by sponsoring the integrated decision cycles (following a global design) and by ensuring functional ownership of the decision meetings. At the global level, the COO served as tiebreaker whenever decisions—such as procurement strategies for global commodities, investments in new facilities for global product launches, or the reconfiguration of a product’s supply chain—cut across regional interests.

To enable IBP to deliver its impact, the company conducted a structured process assessment to evaluate the maturity of all inputs into IBP. It then set out to redesign, in detail, its processes for planning demand and supply, inventory strategies, parametrization, and target setting, so that IBP would work with best-practice inputs. To encourage collaboration, leaders also started to redefine the performance management system so that it included clear accountability for not only the metrics that each function controlled but also shared metrics. Finally, digital dashboards were developed to track and monitor the realization of benefits for individual functions, regional leaders, and the global IBP team.

A critical component of the IBP rollout was creating a company-wide awareness of its benefits and the leaders’ expectations for the quality of managers’ contributions and decision-making discipline. To educate and show commitment from the CEO down, this information was rolled out in a campaign of town halls and media communications to all employees. The company also set up a formal capability-building program for the leaders and participants in the IBP decision cycle.

Rolled out in every region, the new training helps people learn how to run an effective IBP cycle, to recognize the signs of good process management, and to internalize decision authority, thresholds, and escalation paths. Within a few months, the new process, led by a confident and motivated leadership team, enabled closer company-wide collaboration during tumultuous market conditions. That offset price inflation for materials (which adversely affected peers) and maintained the company’s EBITDA performance.

Our research shows that these high-maturity IBP examples are in the minority. In practice, few companies use the IBP process to support effective decision making (Exhibit 2). For two-thirds of the organizations in our data set, IBP meetings are periodic business reviews rather than an integral part of the continuous cycle of decisions and adjustments needed to keep organizations aligned with their strategic and tactical goals. Some companies delegate IBP to junior staff. The frequency of meetings averages one a month. That can make these processes especially ineffective—lacking either the senior-level participation for making consequential strategic decisions or the frequency for timely operational reactions.

Finally, most companies struggle to turn their plans into effective actions: critical metrics and responsibilities are not aligned across functions, so it’s hard to steer the business in a collaborative way. Who is responsible for the accuracy of forecasts? What steps will be taken to improve it? How about adherence to the plan? Are functions incentivized to hold excess inventory? Less than 10 percent of all companies have a performance management system that encourages the right behavior across the organization.

By contrast, at the most effective organizations, IBP meetings are all about decisions and their impact on the P&L—an impact enabled by focused metrics and incentives for collaboration. Relevant inputs (data, insights, and decision scenarios) are diligently prepared and syndicated before meetings to help decision makers make the right choices quickly and effectively. These companies support IBP by managing their short-term planning decisions prescriptively, specifying thresholds to distinguish changes immediately integrated into existing plans from day-to-day noise. Within such boundaries, real-time daily decisions are made in accordance with the objectives of the entire business, not siloed frontline functions. This responsive execution is tightly linked with the IBP process, so that the fact base is always up-to-date for the next planning iteration.

A better plan for IBP

In our experience, integrated business planning can help a business succeed in a sustainable way if three conditions are met. First, the process must be designed for the P&L owner, not individual functions in the business. Second, processes are built for purpose, not from generic best-practice templates. Finally, the people involved in the process have the authority, skills, and confidence to make relevant, consequential decisions.

Design for the P&L owner

IBP gives leaders a systematic opportunity to unlock P&L performance by coordinating strategies and tactics across traditional business functions. This doesn’t mean that IBP won’t function as a business review process, but it is more effective when focused on decisions in the interest of the whole business. An IBP process designed to help P&L owners make effective decisions as they run the company creates requirements different from those of a process owned by individual functions, such as supply chain or manufacturing.

One fundamental requirement is senior-level participation from all stakeholder functions and business areas, so that decisions can be made in every meeting. The design of the IBP cycle, including preparatory work preceding decision-making meetings, should help leaders make general decisions or resolve minor issues outside of formal milestone meetings. It should also focus the attention of P&L leaders on the most important and pressing issues. These goals can be achieved with disciplined approaches to evaluating the impact of decisions and with financial thresholds that determine what is brought to the attention of the P&L leader.

The aggregated output of the IBP process would be a full, risk-evaluated business plan covering a midterm planning horizon. This plan then becomes the only accepted and executed plan across the organization. The objective isn’t a single hard number. It is an accepted, unified view of which new products will come online and when, and how they will affect the performance of the overall portfolio. The plan will also take into account the variabilities and uncertainties of the business: demand expectations, how the company will respond to supply constraints, and so on. Layered risks and opportunities and aligned actions across stakeholders indicate how to execute the plan.

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Trade-offs arising from risks and opportunities in realizing revenues, margins, or cost objectives are determined by the P&L owner at the level where those trade-offs arise—local for local, global for global. To make this possible, data visible in real time and support for decision making in meetings are essential. This approach works best in companies with strong data governance processes and tools, which increase confidence in the objectivity of the IBP process and support for implementing the resulting decisions. In addition, senior leaders can demonstrate their commitment to the value and the standards of IBP by participating in the process, sponsoring capability-building efforts for the teams that contribute inputs to the IBP, and owning decisions and outcomes.

Fit-for-purpose process design and frequency

To make IBP a value-adding capability, the business will probably need to redesign its planning processes from a clean sheet.

First, clean sheeting IBP means that it should be considered and designed from the decision maker’s perspective. What information does a P&L owner need to make a decision on a given topic? What possible scenarios should that leader consider, and what would be their monetary and nonmonetary impact? The IBP process can standardize this information—for example, by summarizing it in templates so that the responsible parties know, up front, which data, analytics, and impact information to provide.

Second, essential inputs into IBP determine its quality. These inputs include consistency in the way planners use data, methods, and systems to make accurate forecasts, manage constraints, simulate scenarios, and close the loop from planning to the production shopfloor by optimizing schedules, monitoring adherence, and using incentives to manufacture according to plan.

Determining the frequency of the IBP cycle, and its timely integration with tactical execution processes, would also be part of this redesign. Big items—such as capacity investments and divestments, new-product introductions, and line extensions—should be reviewed regularly. Monthly reviews are typical, but a quarterly cadence may also be appropriate in situations with less frequent changes. Weekly iterations then optimize the plan in response to confirmed orders, short-term capacity constraints, or other unpredictable events. The bidirectional link between planning and execution must be strong, and investments in technology may be required to better connect them, so that they use the same data repository and have continuous-feedback loops.

Authorize consequential decision making

Finally, every IBP process step needs autonomous decision making for the problems in its scope, as well as a clear path to escalate, if necessary. The design of the process must therefore include decision-type authority, decision thresholds, and escalation paths. Capability-building interventions should support teams to ensure disciplined and effective decision making—and that means enforcing participation discipline, as well. The failure of a few key stakeholders to prioritize participation can undermine the whole process.

Decision-making autonomy is also relevant for short-term planning and execution. Success in tactical execution depends on how early a problem is identified and how quickly and effectively it is resolved. A good execution framework includes, for example, a classification of possible events, along with resolution guidelines based on root cause methodology. It should also specify the thresholds, in scope and scale of impact, for operational decision making and the escalation path if those thresholds are met.

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In addition to guidelines for decision making, the cross-functional team in charge of executing the plan needs autonomy to decide on a course of action for events outside the original plan, as well as the authority to see those actions implemented. Clear integration points between tactical execution and the IBP process protect the latter’s focus on midterm decision making and help tactical teams execute in response to immediate market needs.

An opportunity, but no ‘silver bullet’

With all the elements described above, IBP has a solid foundation to create value for a business. But IBP is no silver bullet. To achieve a top-performing supply chain combining timely and complete customer service with optimal cost and capital expenditures, companies also need mature planning and fulfillment processes using advanced systems and tools. That would include robust planning discipline and a collaboration culture covering all time horizons with appropriate processes while integrating commercial, planning, manufacturing, logistics, and sourcing organizations at all relevant levels.

As more companies implement advanced planning systems and nerve centers , the typical monthly IBP frequency might no longer be appropriate. Some companies may need to spend more time on short-term execution by increasing the frequency of planning and replanning. Others may be able to retain a quarterly IBP process, along with a robust autonomous-planning or exception engine. Already, advanced planning systems not only direct the valuable time of experts to the most critical demand and supply imbalances but also aggregate and disaggregate large volumes of data on the back end. These targeted reactions are part of a critical learning mechanism for the supply chain.

Over time, with root cause analyses and cross-functional collaboration on systemic fixes, the supply chain’s nerve center can get smarter at executing plans, separating noise from real issues, and proactively managing deviations. All this can eventually shorten IBP cycles, without the risk of overreacting to noise, and give P&L owners real-time transparency into how their decisions might affect performance.

P&L owners thinking about upgrading their S&OP or IBP processes can’t rely on textbook checklists. Instead, they can assume leadership of IBP and help their organizations turn strategies and plans into effective actions. To do so, they must sponsor IBP as a cross-functional driver of business decisions, fed by thoughtfully designed processes and aligned decision rights, as well as a performance management and capability-building system that encourages the right behavior and learning mechanisms across the organization. As integrated planning matures, supported by appropriate technology and maturing supply chain–management practices, it could shorten decision times and accelerate its impact on the business.

Elena Dumitrescu is a senior knowledge expert in McKinsey’s Toronto office, Matt Jochim is a partner in the London office, and Ali Sankur is a senior expert and associate partner in the Chicago office, where Ketan Shah is a partner.

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The Ultimate Guide To Integrated Business Planning

Are you looking for a way to streamline your business planning process? Integrated Business Planning (IBP) is the perfect solution. It’s an approach that combines all aspects of business planning into one comprehensive strategy, allowing you to make decisions quickly and accurately. This guide will help you understand how IBP works and how it can benefit your organization.

With IBP, you can save time by having all of your data in one place, making it easier to identify trends and opportunities as they arise. You’ll also be able to make more informed decisions based on real-time data analysis instead of relying on outdated information or guesswork.

Read this Ultimate Guide To Integrated Business Planning (IBP) now!

What Is Integrated Business Planning?

Integrated business planning (IBP) is a powerful process that could become central to how a company runs its business. It is one generation beyond traditional sales and operations planning (S&OP) and combines financial and operational data from across the organization to create an aligned, cross-functional plan for the future. IBP enables businesses to make decisions based on key assumptions that are documented and updated regularly, helping them to achieve corporate goals.

IBP solutions help align financial and operations plans, giving companies greater planning accuracy and operational performance. This process also incorporates forecasting and demand response , demand-driven supply management, inventory optimization, production scheduling, transportation optimization, and more. With business planning processes in place, companies can make better decisions faster by leveraging real-time data from across their organization.

What Is the Difference Between Sales & Operations Planning and IBP?

Sales And Operations Planning (S&OP) and Integrated Business Planning (IBP) are two different integrated processes used to manage the supply chain. S&OP is a cross-functional process that focuses on aligning demand forecasts and supply in volumes in a tactical range, while IBP has a broader scope that looks at aligning all aspects of the business to ensure better decision-making.

Sales and operations planning processes typically have medium-term planning horizons that rarely extend beyond 18 months, while IBP naturally has a longer time scale. Additionally, IBP starts at the executive level, and each month or planning cycle culminates in a performance review against plans.

Both S&OP and IBP are important for managing the supply chain and ensuring successful operations. However, it’s important to understand their differences to choose which process best meets your needs.

Benefits Of Integrated Business Planning

The main benefit of implementing IBP is increased revenue, followed by forecast accuracy and improved Perfect Order Delivery. Other benefits include creating transparency between strategic goals and financial and operational activities, unlocking P&L performance through coordinating strategies and tactics across traditional business functions, creating more collaborative decision-making, providing higher agility in responding quickly to the business environment and market volatility, and generating insights on developments in the market.

IBP is important because functional and technical silos across organizations can result in flawed decision-making. Transitioning to IBP can help companies enhance their performance by improving their ability to respond quickly to changes in the market.

Challenges Of Integrated Business Planning

Integrated Business Planning (IBP) is a powerful process that can revolutionize how companies run their business. However, it is not without its challenges. IBP requires an organization with the right technology, processes, and people to succeed.

One of the biggest challenges of IBP is getting all departments within an organization on board with the process. It requires buy-in from all levels of the organization, including executives, operations, and finance teams. Without this unified approach and skilled and experienced employees, getting everyone working together towards a common goal can be difficult.

Another challenge of IBP is data integration. In order for IBP to be successful, data must be collected from multiple sources and integrated into one system. This can be difficult due to different systems used by different departments or even different countries within an organization. It also requires a high level of accuracy and consistency in order for the results to be meaningful and actionable.

Finally, IBP requires constant monitoring and adjustment as market conditions change over time. Companies must stay up-to-date on changes in demand, supply chain disruptions, and other factors that could affect their plans. Without regular monitoring and adjustments, companies risk making decisions based on outdated information, which could lead to costly mistakes down the line.

Why Is Integrated Business Planning Important?

Integrated Business Planning (IBP) is an important process for businesses to align their goals with their financial, supply chain, product development, marketing, and other operations. It helps companies to create a unified plan that can be used to make better decisions and reach corporate objectives.

IBP is a powerful tool that allows businesses to consider all the different elements of their operations when making decisions. This means they can make more informed choices about allocating resources, developing products and services, and managing their finances. By taking into account all these factors, IBP enables companies to make better decisions and more informed strategic plans that will lead them toward success in the long run.

Another benefit of an Integrated Business Planning process is that it helps businesses become more agile and responsive to changes in the market. With IBP in place, companies are able to quickly adjust their plans based on new information or changing customer needs. This allows them to stay ahead of the competition and remain competitive in an ever-changing business landscape.

Overall, Integrated Business Planning is essential for businesses looking to stay ahead of the competition and reach their goals. By considering all aspects of operations when making decisions, IBP provides companies with a unified plan that can help them succeed in the long run.

Elements Of Integrated Business Planning

The three main parts of integrated business planning are categorized as “Plan,” which involves creating a strategy, “Execute,” which involves carrying out the plan; and “Monitor and Adjust,” which involves reviewing and making changes as needed.

The Plan element involves the initial step of creating a strategy. This includes identifying key goals, objectives, and expectations around the company’s products and services to understand better how those should be used in an overall strategy. Additionally, it includes developing plans for specific initiatives that will help advance those goals.

The Execute element is about carrying out those plans. This includes everything from setting timelines, allocating resources, and developing procedures to ensure the plan is implemented properly.

Finally, the Monitor and Adjust element involves reviewing progress on the strategy and business performance and making any necessary changes or adjustments. This could include changing timelines for certain initiatives, modifying business processes, or introducing new initiatives to stay ahead of competitors. This element is important to ensure the plan remains up-to-date and relevant in an ever-changing business environment.

The Integrated Business Planning Process

To be successful, integrated business planning needs to occur on a regular basis, usually every month or every quarter. This strategic planning process should be undertaken to align the different parts of the business and create a unified plan that everyone can work towards.

1. Product Management

A cross-functional team meets monthly to review the status of all product-related projects. This includes managing the entire product portfolio, identifying any new risks or opportunities, prioritizing high-value products, and aligning them with business goals. The ultimate aim is to ensure that raw materials and manufacturing floor capacity are available as needed. Whenever necessary, product managers update and publish a master plan that outlines the required resources for delivering the changes.

2. Demand Planning

Demand planning is a team effort that involves members from sales, marketing, and finance. Its goal is to meet customer demand and reduce excess inventory while avoiding supply chain operations issues. Improving profitability, customer satisfaction, and efficiency are all benefits of demand planning. The team works to create a demand plan that accurately estimates future demand, tailored to the right markets and methods. KPIs such as sales forecast accuracy, inventory turns, fill rates, and order fulfillment lead times are used to measure success.

3. Supply Chain Planning

Supply chain professionals aim to find a cost-effective way to meet expected demand efficiently. To achieve this goal, having visibility into complex supply chains is crucial. One way to accomplish this is through a formal supply chain optimization project, which helps identify and fix potential weaknesses, such as low inventory levels or order fulfillment challenges. The ultimate goal of supply chain management is to reduce the cost of goods sold (COGS) .

Supply chain leaders should deeply understand the production process from raw materials to finished goods. By understanding upstream and downstream processes, supply chain professionals can better anticipate customer needs, uncover new opportunities for cost savings, and mitigate risks. Additionally, they should build relationships with key suppliers and develop strategies to ensure a consistent flow of materials.

4. Financial Planning

Financial planning involves setting short-term and long-term goals for a company that are achievable through the best use of resources. This includes understanding financial trends, managing budgets, monitoring cash flow , financial forecasting, and making decisions about investments.

Financial planning gives organizations an understanding of their current economic environment and helps them create plans to achieve their objectives. It also helps to reduce risk and maximize profits. Ultimately, financial planning is essential for success in any organization.

Integrated planning can be challenging for organizations used to a traditional budgeting process. However, companies can improve their overall financial performance and better meet customer needs by taking a more strategic approach. This requires data-driven insights to inform decisions and the ability to quickly shift resources in response to changing market conditions. The finance team’s influence is driven by their ability to analyze and recommend quickly.

5. Customer And Channel Plan Development

Customer and channel planning are integral components of a successful business. These plans involve researching customer needs, segmenting target audiences and creating strategies to reach them. Additionally, customer and channel plans help determine the most effective marketing tactics for each target audience with the goal of increasing sales and brand loyalty.

This includes selecting the best delivery channels (offline or online) that suit certain markets and target audiences and considering customer preferences when designing products or services. Through customer and channel planning, organizations can create a more successful marketing strategy and reach their desired goals.

4. The Integration Team

The integration team, which is usually composed of individuals from the finance organization, combines the initial product, demand, and supply plans into a single strategic plan that covers a 24- or 36-month period. As necessary updates are made, significant changes are identified by the teams. Decisions that require higher-level approval are prepared for executive review.

The integration team also leads scenario planning . This process involves considering different potential business plan outcomes and helping identify risks. The teams then help develop strategies to mitigate risk, thereby ensuring the success of the overall planning process.

5. The Executive Team 

The executive leadership team addresses disagreements and shares the revised plan with the entire organization. This management team is responsible for making final decisions on the plan and ensuring it reflects the organization’s objectives. Additionally, they review progress made against the plan and make adjustments as needed.

The executive team also considers external factors such as market conditions, customer expectations, competitive environment, and other factors to ensure the organization is on track to reach its desired goals.

6. Supporting Software

Many organizations use software to support their IBP process. This software may include budgeting and forecasting tools , customer relationship management (CRM) systems, financial analysis programs , and inventory tracking applications. Such software assists in streamlining the process of gathering data from multiple sources and increasing overall efficiency within the organization. It can also assist with scenario planning.

7. KPI Assessment

At regular intervals, organizations assess the performance of their plans using key performance indicators (KPIs). These KPIs provide a snapshot of progress and help determine whether or not the plan is on track to achieve its desired outcomes. By evaluating KPIs on an ongoing basis, organizations can identify areas that need improvement and adjust their plans accordingly.

Software To Support IBP

Software solutions are available to support Integrated Business Planning processes. These enterprise performance management solutions provide a comprehensive view of the entire business, allowing you to analyze financial data in real-time data analysis from multiple sources. This helps organizations make informed decisions based on accurate information and forecasts. Additionally, software solutions can automate many of the manual processes associated with IBP, such as data collection and analysis, which helps streamline operations and reduce costs.

Organizations looking to transition to Integrated Business Planning should consider investing in cloud based technology and software solutions supporting their IBP initiatives. Many software solutions can support financial forecasting processes with new tools like predictive analytics ,and feed right into your financial plan.

Frequently Asked Questions

What does ibp stand for in business.

IBP stands for Integrated Business Planning. It is an integrated approach to managing a company’s resources, operations, and goals across multiple departments and functions.

What Does IBP Mean In Sales?

IBP in sales refers to Integrated Business Planning, which is an integrated approach to managing a company’s resources, operations, and goals across multiple departments and functions. This includes aligning the objectives of each department with the overall business strategy. IBP helps organizations achieve their sales goals by analyzing data, optimizing processes, and improving customer experience.

What is an example of an integrated business model?

An example of an integrated business model is a supply chain management system. This type of system links different parts of the organization, from the production and inventory to customer service and sales. It leverages data to streamline operations, improve efficiency, and reduce costs. By integrating processes across departments, businesses can gain greater visibility into their operations and make better decisions faster than ever before.

What are the benefits of Integrated Business Planning?

The main benefits of IBP include improved visibility into operations, better decision making, more efficient processes, and reduced costs. By having an integrated view of their business operations, organizations can identify areas for improvement and make informed decisions based on data-driven insights. This helps them improve customer experience, optimize resources, and maximize profitability. Additionally, IBP helps organizations maintain compliance with changing regulations and policies while minimizing risks.

Quick Recap

Integrated business planning (IBP) is a comprehensive approach to managing an organization’s operations. It is designed to help companies improve their strategic decision-making by providing a unified view of all operational data and processes. IBP can revolutionize how companies run their businesses, but it comes with its own challenges.

In order for IBP to be successful, data must be accurately collected, integrated, and monitored on a regular basis. Additionally, IBP requires the cooperation of multiple departments and stakeholders throughout an organization to succeed. Despite these challenges, companies that successfully implement IBP can gain a competitive advantage by optimizing their operations and increasing their efficiency.

Have any questions? Are there other topics you would like us to cover? Leave a comment below and let us know! Remember to subscribe to our Newsletter to receive exclusive financial news in your inbox.

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FP&A Leader | Digital Finance Advocate | Small Business Founder

Mike Dion brings a wealth of knowledge in business finance to his writing, drawing on his background as a Senior FP&A Leader. Over more than a decade of finance experience, Mike has added tens of millions of dollars to businesses from the Fortune 100 to startups and from Entertainment to Telecom. Mike received his Bachelor of Science in Finance and a Master of International Business from the University of Florida, laying a solid foundation for his career in finance and accounting. His work, featured in leading finance publications such as Seeking Alpha, serves as a resource for industry professionals seeking to navigate the complexities of corporate finance, small business finance, and finance software with ease.

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Integrated Business Planning: A Complete Guide

Do your sales teams push for continuous promotions? Meanwhile, does your supply chain struggle with stock levels as finance grapples with margins? This familiar scenario often arises from operational silos within an organization. It leads to missed opportunities, operational inefficiencies, and uninformed decision-making.

How do you achieve seamless coordination across all departments? The answer lies in Integrated Business Planning. IBP is not merely a strategy; it transforms processes. It aligns your teams, enhances collaboration, and ensures every department works towards the same goals.

Are you ready to streamline your operations and improve decision-making across your organization? Dive into our comprehensive guide to discover how IBP turns your business challenges into opportunities for growth. Keep reading!

What is Integrated Business Planning?

IBP is a strategic approach that transcends traditional planning methods. It integrates diverse business processes to enhance overall corporate performance. IBP aligns departments such as sales, operations, finance, and marketing. This ensures every unit works towards unified goals. Such harmony is crucial for retailers facing rapid market changes and evolving consumer demands.

IBP operates on a rolling horizon, typically spanning 24 to 36 months. This enables retail leaders to make proactive decisions based on long-term forecasts and analyses. This forward-thinking approach aligns strategic and operational plans. It ensures that tactical decisions support the business’s overarching goals.

Consider a national retail chain planning to expand its product line. IBP coordinates new product development with sales forecasts . It aligns with supply chain capabilities and financial budgets. This strategic alignment prepares all departments to support the launch effectively.

Why is Integrated Business Planning Essential?

Before diving into Integrated Business Planning, we acknowledge its core, Sales and Operations Planning. S&OP traditionally focuses on balancing demand and supply within a shorter-term horizon. It establishes the operational groundwork necessary for effective integration. In retail, adapting quickly to market trends is crucial. S&OP ensures your operational capabilities align with immediate market demands. IBP builds on this foundation. It incorporates strategic elements like financial forecasting and long-term market analysis. This broadens the scope from merely operational to strategic.

IBP offers a cohesive approach to decision-making. It ensures that all business facets, from inventory to finance, are in harmony. Here’s why embracing IBP is crucial for your retail operations:

• Enhanced Visibility Across Departments: IBP integrates data and goals across various departments. This provides a clear overview of business operations. Such transparency lets you see how decisions in one area impact others. It leads to more informed decision-making. For instance, a decision to launch a new product line will involve input from the supply chain, sales, marketing, and finance. This ensures that all aspects are aligned and supported.
• Improved Forecast Accuracy: With IBP, you use advanced analytics and collaborative insights to refine forecasting. Insights come from various departments. This accuracy is vital in retail. It predicts market trends, consumer behavior, and potential disruptions. Accurate predictions directly influence stocking and marketing strategies. Better forecasting lets you adjust inventory levels more precisely. This avoids both overstock and understock situations, which erode profits.
• Strategic Resource Allocation: IBP links strategic goals with operational planning, ensuring efficient resource allocation. This strategic alignment drives investments in personnel, technology, and inventory. Investments are based on a deep understanding of business goals, market demands, and financial constraints.
• Faster Response to Market Changes: Market conditions shift rapidly due to factors like consumer trends, economic changes, and technological advancements. IBP allows swift responses to these changes. You adjust plans in real time, ensuring agility and resilience. For example, if a sudden fashion trend emerges, IBP lets you quickly increase production or distribution in targeted areas. This quick action enables you to capitalize on the trend.
• Increased Operational Efficiency: IBP breaks down silos within the organization, fostering collaboration and coordination. This approach boosts efficiency by getting departments to work together. They optimize workflows and reduce redundancies. Whether streamlining the supply chain or synchronizing marketing and sales, IBP ensures smoother, more cost-effective operations.
• Risk Mitigation: IBP incorporates proactive risk management, anticipating disruptions, and formulating strategic responses. This preparedness is crucial in retail, where supply chain issues significantly affect availability and sales. With IBP, you identify risks and weave risk management into your planning. This ensures your business stays strong against unexpected challenges.
• Sustained Competitive Advantage: IBP’s comprehensive nature provides a competitive edge. You stay ahead of the market and even shape future trends. This forward-thinking lets you innovate continuously. It also enables you to meet customer expectations effectively. Thus, you distinguish your business from competitors.

Integrated Business Planning Process

IBP is a strategic process that aligns demand, supply, new product development, and financial strategy into a cohesive plan. Here’s how you implement IBP effectively in your retail business, ensuring each step contributes to your overarching strategic goals:

• Strategic Review: Start by assessing your long-term business goals and market strategies. This foundation ensures that all IBP efforts align with where you want your retail business to be in the next three to five years. You examine trends, consumer behaviors, and potential disruptions that might affect your market.
• Demand Planning: This step involves forecasting customer demand for your products. You analyze historical sales data, market trends, promotional activities, and seasonality. This forecast forms the basis for all other planning activities. It ensures that you match your inventory and resources to anticipated demand.
• Supply Planning: Once you have a clear forecast of customer demand, you plan your inventory and procurement . This step involves scheduling deliveries from suppliers. You manage inventory levels and ensure logistics handle incoming and outgoing products efficiently.
• Product Portfolio Management: Manage your product portfolio by analyzing existing product performance. Plan the introduction of new products to keep your offerings competitive. Ensure your products stay relevant in the market. Base your decisions on lifecycle management, customer preferences, and profitability analysis.
• Financial Integration: Align your financial plans with operational strategies. This step involves budgeting, profitability analysis, and setting financial targets. Ensure these targets match your operational capabilities and constraints. Optimize all financial resources to support business growth and sustainability.
• Collaborative Reconciliation: In this crucial step, you reconcile all plans across different functions. These include demand, supply, product, and financial plans. Collaboration involves regular meetings with all stakeholders. This ensures every department understands and supports the integrated plan. Resolving conflicts between different areas is vital. Ensure the strategy is achievable and aligned across the organization.
• Execution and Monitoring: Implement the integrated plan across your retail operations. This step demands effective communication and the planned deployment of resources. Continuously monitor performance against the plan. Use key performance indicators and real-time data to ensure execution stays on track and meets expected outcomes.
• Continuous Improvement: The final step in the IBP process involves regular reviews of the outcomes. You analyze what succeeded, what failed, and the reasons. Continuous feedback loops adapt the planning process. This adaptation enhances accuracy and efficiency over time. Ongoing evaluation and adjustment maintain agility and responsiveness to market changes. These actions drive continuous improvement in business performance.

💡Fact McKinsey reports that companies with mature IBP processes reduce delivery penalties and missed sales by 40-50 percent.

S&OP primarily balances supply and demand. IBP extends beyond this. It integrates financial planning and product development into its framework. This makes it a broader, more strategic approach. It encompasses long-term goals and focuses on profitability.

Challenges of Integrated Business Planning

• Complex Data Integration: IBP synthesizes large volumes of data from sales, operations, finance, and marketing. Integrating and harmonizing this data presents significant challenges. If you rely on disparate systems that do not communicate seamlessly, the task becomes more complex. Ensuring data accuracy and consistency requires robust IT support. You also need sophisticated software solutions.
• Cross-Functional Collaboration: IBP requires ongoing collaboration across your company’s departments. Siloed operations and misaligned departmental objectives hinder effective IBP execution. Encouraging a culture of teamwork and aligned goals is crucial. Achieving this culture is challenging. It involves changing organizational behaviors and mindsets.
• Change Management: Shifting to integrated planning demands significant changes in your business processes and systems. These changes affect every organizational level, from top executives to operational staff. You must manage these changes effectively. Securing buy-in from all stakeholders often proves challenging. Overcoming resistance to change is crucial. Everyone must understand the benefits and their roles in IBP clearly.
• Skill Gaps: IBP demands advanced analytical capabilities, strategic thinking, and operational expertise. Combining these skills poses a significant challenge. You must find and develop talent with these cross-functional skills. Training and hiring new talent are necessary but require time and resources.
• Consistent Execution and Monitoring: Once implemented, applying IBP principles consistently across all business units is challenging. You must continuously monitor its performance. Ensuring the IBP process is dynamic and adaptable to market changes is crucial. This requires ongoing attention and refinement.
• Technology Adoption: Implementing the right technology to support IBP is crucial. Selecting, customizing, and deploying enterprise planning software to fit your specific needs is daunting. Additionally, technology alone is not a solution. You must align it with your business processes and train your team to use it effectively.
• Balancing Strategic and Operational Focus: Maintaining a balance between strategic objectives and operational realities is key. You ensure that long-term strategic goals do not overshadow immediate operational needs. This balancing act requires sophisticated forecasting. It also demands effective scenario-planning capabilities.

Embracing Integrated Business Planning positions you to manage your resources smartly. It keeps your business agile and aligned with market demands and growth objectives. It promotes sustained business success and differentiates your company in a competitive market.

Take the Next Step

Embrace Integrated Business Planning today with the right means and unlock the full potential of your business.

Elevate your forecasting strategies with integrated business planning that seamlessly integrates with your operations for synchronized decision-making, enhanced collaboration, and optimized resource allocation. Ensure success across every facet of your organization.

Frequently Asked Questions

What are the key differences between s&op and integrated business planning.

S&OP primarily focuses on balancing supply and demand and aligning production and inventory levels with sales forecasts. In contrast, IBP integrates these operational planning activities with strategic and financial planning, providing a more holistic view and a longer-term focus.

Is Integrated Business Planning adaptable to various industries or business models?

Yes, Integrated Business Planning is highly adaptable and can be tailored to meet the specific needs of different industries and business models. By adjusting the focus on key metrics, processes, and strategic priorities, IBP can effectively support unique operational and strategic requirements across sectors.

What metrics do companies use to evaluate the effectiveness of their Integrated Business Planning initiatives?

Companies assess the effectiveness of their Integrated Business Planning initiatives through various metrics: improved forecast accuracy, increased revenue, enhanced customer satisfaction, and reduced inventory costs.

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Your Complete Starter Guide to Understanding Integrated Business Planning

Integrated business planning gives you a 360 degree view of the business by connecting all your business applications. Here's how to get started.

Create flexible and predictable sales forecasts

Integrated Business Planning (IBP) has emerged as the hallmark of businesses undertaking concentrated digital transformation efforts.

While business planning has been a standard part of every organizational strategy, it has been a disjointed process until recently. Different departments ended up formulating their own strategies which impeded the organization's growth potential. Without a cohesive planning process in place, companies were unable to get a 360° look at the business and were unable to plan for the future.

Realizing the bottlenecks created by disjointed business planning, companies are now migrating to IBP as their default strategy.

What is Integrated Business Planning?

Integrated Business Planning (IBP) can be described as a process that offers management a 360° view of organizational functions like sales, marketing, finance, accounting, and others. These insights enable decision makers to prepare a comprehensive strategy to carry the business towards a promising future marked by enhanced growth potential.

Integrated Business Planning (IBP) has been a buzzword in the corporate sector for quite a few years, but its importance has increased exponentially in the last decade. IBP can be considered as a refined mashup of financial planning, operational best practices, and supply chain optimization to not only mitigate the risks but also deliver savings, responsiveness, and speed for the company and improve customer experience .

What is an Integrated Business Strategy?

Integrated Business Strategy (IBS) is a set of processes that companies can employ to bolster their efficiency and competitiveness in the market through expansion in different avenues.

These areas could include logistics, distribution, or competition. Businesses can use the IBS to enhance their sway in the distribution network to forge ahead of the competition and have a strong market presence. When compared, IBP is more focused on creating a cohesive business strategy that is in harmony with organizational objectives, while IBS is more about executing the IBP to achieve the desired goals.

What’s the difference between Sales & Operations Planning (S&OP) vs. Integrated Business Planning (IBP)?

There is a constant debate amongst experts if there is any difference between IBP and S&OP. While some argue that these strategies are complementary, there is a slight difference between these two integral tactics. 

S&OP is described as a cross-functional planning process undertaken to maintain the balance between supply and demand through the communication of changes in market demand to management. Finance, production, and supply chain departments utilize this data to optimize their production planning and purchasing decisions. S&OP empowers the organization with shorter lead times, improved management control, better customer service, and superior supply chain management. 

In comparison, it is evident that IBP is an extension of S&OP. Where S&OP is more inward-looking, IBP attempts to strike a balance between internal and external factors. After an organization has achieved a higher maturity level in S&OP, it must embark on the journey towards incorporating IBP as a standard business process. 

What are the key benefits of integrated business planning?

In the modern business environment, management must ensure alignment across cross-functional groups to maintain a competitive edge. IBP helps an entity overcome challenges posed by disjointed business planning to augment the decision-making processes. Some of the noteworthy benefits of IBP are:

• Accountability : Departmental teams are aware of the impact of their actions on other departments and the entire organization. Managers can fix individual responsibilities of employees to determine employee accountability.
• Transparency : IBP offers a consolidated view of data that enables departments to undertake scenario planning for different possible situations in sync with other departments. Such transparency in operations bodes well for the company's future.
• Alignment: With IBP, departments can understand the overall organizational objectives and then align their operations with syncing with those objectives. 
• Optimization : Management can ensure optimal resource utilization by addressing common bottlenecks that impede the operations of multiple departments. 

What is the purpose of integrated business planning?

IBP is a process designed to enhance the efficiency of the decision-making process for the entire organization. It enables management to lay down a detailed plan for managing the enterprise with a long-term horizon. Some of the key aspects that IBP addresses are allocating crucial resources, supply chain management, personnel requirement, financial analyses, and time management to ensure a balance between profitability and customer satisfaction.

IBP is the next step in the evolution of S&OP which in itself originated in the 1980s from supply and demand balancing processes. IBP ensures alignment of all departmental functions to prepare the entity for possible scenarios through accurate strategy deployment and better cooperation between key stakeholders.

Why do you need integrated business planning?

Whether you are a start-up looking to establish a strong presence in the market or an established enterprise interested in consolidating your market position, IBP must be an integral part of your strategy. Companies need IBP to devise a set of concrete actions to achieve different objectives. 

• Quality of inputs, outputs, and processes : Companies can maintain a uniform demand and supply plan that is in sync with the financial goals by attending meetings attended by cross-functional decision makers.
• Organizational capabilities : IBP promotes cross-functional collaboration across multiple layers of the organization to encourage functional excellence and problem-solving.
• Accountability and Performance : IBP helps design incentives to encourage transparency and accountability of performance. Shared metrics made available promote collaboration between key stakeholders. 
• Data systems : IBP promotes integrating data systems across departments to deliver a single point data source for all requirements. Automated data flows and system detection promote real-time decision-making. 
• Process design : IBP helps bridge the gaps left by short-term and long-term planning by enabling flexible strategies for addressing issues arising between these two time horizons. It also promotes strategy via management-level operational planning and target setting. 

How do you implement integrated business planning for your company?

Many companies struggle with implementing IBP as crucial responsibilities and metrics are not aligned across functions. This might pose difficulties with steering the operations collaboratively. Thus, it is important to clearly understand implementing IBP for your company. 

Integrations

To save crucial time and resources for different departments, it is important to select an IBP platform that seamlessly integrates with your existing tech stack. This will help eliminate data transfer errors and reduce data consolidation time, as well as maintain critical data security standards. Therefore, the first and foremost requirement for implementing IBP is to ensure seamless integration of the IBP software with your tech infrastructure, including ERP software, CRM software, Billing Systems, Data Warehouses, and more. 

Consolidating data sources into a single source of information 

Duplicate and inconsistent data sources pose challenges for an organization at multiple levels, leading to a waste of precious resources and impacting the bottom line. It is, therefore, important to have a single source of information that can act as a reference point for multiple departments. After integrating the IBP software with your tech stack, your next focus should be ensuring accurate data collection and aggregation in real time. This approach would provide a single source of truth for all the departments, eliminating errors due to omission or duplication.

Building forecasting models

Forecasting in IBP is used for demand sensing in the short, medium, and long term. To create a forecast model with your IBP software, you must define the algorithms and key figures related to outputs and inputs. A forecast model features three steps, i.e., pre-processing, forecasting, and post-processing. But a forecast model only works as a container of functionality, and it is you who must define its aggregation level and timing of running.

Financial forecasting methods

There are different financial forecasting methods that you can opt for per specific requirements according to different situations.

• Straight Line Forecasting : - This method is used to get a simple view of continued growth at a consistent speed to derive predictions for guiding financial and budget goals.
• Moving Average Forecasting : - This method calculates average performance for different metrics in a specified time frame. Companies use this method for the identification of underlying patterns for varied financial metrics.
• Simple Linear Regression Forecasting : - This method helps create a trend line based on the relationship between an independent and dependent financial variable. 
• Multiple Linear Regression Forecasting : This method uses two or more financial variables to make a projection. This forecasting model helps understand the relationship between different financial parameters and possible outcomes.

Scenario planning

Use your IBP platform to eliminate being caught off guard while executing your strategies. You can run multiple “what-if” scenarios within minutes to analyze the aspects affecting your business. You can create new scenarios using existing scenarios and compare different scenarios per your requirements. Representations like line charts, bar diagrams, tables, and other visualizations can be used for easy understanding of data for informed scenario planning. This allows you to improve the accuracy of predictions based on a single source of truth.

Scheduled imports

With the option of scheduling data imports built-in, IBP platforms are taking the hassle out of data collection and consolidation. With the scheduling option, you can define the import requirements and get all the data presented to you in a consolidated manner. With access to real-time data, you can ensure higher data integrity and accuracy, as well as data access autonomy. You circumvent investing heavily in setting up IT infrastructure, as cloud-based IBP software solutions can operate seamlessly on your existing infrastructure.

Analytics and data visualizations

Why stick to cells, rows, and columns for data analysis when you can access stunning data visualization solutions with your IBP software? Visual analytics helps draw meaningful insights from data by offering multiple ways to look at the same dataset. IBP platforms allow you to clean and enrich your data in seconds, allowing you to spend more time on data analysis and exploration rather than on manual data collection and consolidation.

Building beautiful presentations 

The true value of data analysis lies in the decisions it enables leaders to take. Storytelling, by incorporating the data and visualizations in a beautiful presentation, is essential to reaping the benefits of an integrated planning and analytics platform. You can use your IBP platform to import and export your data from sources including Google Sheets and create impressive presentations that drive positive impact.

Measuring ROI and impact on the business

Always ensure the measurement of return on investment (ROI) with key metrics depending on the use case. For example, your Finance team might have spent several days on data preparation before achieving actual insights from financial reporting. An integrated business platform has the potential to reduce this data prep time by 80% — metrics like this can be a great way to measure your team’s efficiency post implementing an IBP.

Integrated business planning by the department

The best part of an integrated business planning platform is its ability to support a wide array of business use cases - Sales, HR, Marketing, Finance, RevOps, CX, and more:

Finance and FP&A teams 

IBP platforms empower finance teams to build, maintain, and visualize data in real-time to deliver informed forecasts. Finance teams can save considerable time and resources as they can clean and enrich data in seconds and run models in hours instead of days with up to 20x fewer formulas than Excel. 

Revenue and Sales teams 

IBP platforms enable revenue and sales teams to unlock revenue growth potential through flexible financial modeling options. Therefore, teams can spend more time on strategy by reducing planning cycles for non-productive tasks. 

Executives 

Management teams and key executives are empowered to deliver well-rounded business results as the IBP platforms offer a single data source for all stakeholders. With a 360° view of the business, informed decision-making becomes the new standard practice.

Choosing the best business planning software 

To avail the complete benefits of IBP, selecting the best business planning software is essential. When compared based on power, flexibility, and design, Pigment emerges as the clear leader and is trusted by industry leaders across domains.

Pigment is one of the most feature-rich and user-friendly business planning softwares that offers you a one-stop solution for all your planning requirements. 

Pigment allows your teams to be more efficient as they gain single-point access to enriched data and can spend more time on data analysis to draw meaningful insights.

You can quickly create impressive models with real-time previews to bring all the decision makers at speed quickly. You create a seamlessly shared understanding of numbers across multiple departments, breaking down the silos affecting operational efficiency.

Pigment removes the element of surprise from all your decisions as you can forecast and run multiple scenarios to identify suitable opportunities and risks for your business.

Book a demo today and experience the unparalleled power of Pigment for yourself.

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Integrated Business Planning: A Detailed Exploration of Strategy and Execution

✅ All InspiredEconomist articles and guides have been fact-checked and reviewed for accuracy. Please refer to our editorial policy for additional information.

Integrated Business Planning Definition

Integrated business planning is a management process that synergizes sales, marketing, finance, operations, and logistics to drive an aligned operational plan and business strategy, balancing demand and supply while also considering financial objectives and the allocation of critical resources. It embraces short, medium, and long-term business planning and assists in decision-making, reducing risks, and increasing profitability.

Importance of Integrated Business Planning

The crucial role of integrated business planning.

Today’s businesses exist in a world that is, to say the least, complex and full of rapid changes. In these circumstances, integrated business planning plays a pivotal role in navigating through the turbulent times by bridging the gap between the company’s strategic ambitions and their operational constraints.

As a unifying framework, the process provides a link between the top-level strategic planning and day-to-day operational activities. It eliminates silos between departments providing a holistic, transparent and real-time view of the business. By mapping all operations to strategic goals, it ensures that all decisions and actions are pulling in the same direction toward the fulfillment of those goals.

Aligning Strategic, Operational, and Financial Planning

With integrated business planning, synchronization becomes achievable at an elevated level. It enables businesses to align their strategic objectives with operations and finances, thus ensuring a smooth flow of processes. When strategy, operations, and finance harmoniously work together, it eliminates any disconnects, resulting in effective and efficient decision-making.

From a strategic perspective, the approach aids in prioritizing goals and developing responsive and realistic plans to achieve them. On the operations front, it identifies bottlenecks, assesses risk, and ensures that all operations are in line with strategic objectives. Lastly, the integration with financial planning leads to accurate financial forecasts, effective cash management, and robust financial control.

To put it another way, this integrated view of business planning is akin to a well-conducted orchestra. Each section of the orchestra, be it strategic, operational, or financial, knows its role, its tasks, and how it contributes to the overall performance of the melody; which in this case, becomes the successful completion of strategic goals.

The Outcome: A Resilient Business Model

In the face of evolving markets and shifting customer demands, integrated business planning empowers businesses to quickly identify, adapt, and respond to changes efficiently. The approach supports timely and informed decision-making, improves communication and collaboration, and nurtures a proactive business culture focused on future growth.

The process also provides a robust system that facilitates scenario planning and risk mitigation. It promotes informed and rational decision-making, thus creating a resilient business model capable of withstanding market uncertainties and disruptions.

In summary, integrated business planning offers a comprehensive, more intelligent approach to business management—one that aligns strategy, operations, and finance towards a common goal while driving performance and sustainable growth.

Core Components of Integrated Business Planning

At the epicenter of integrated business planning is demand. Understanding current customer needs and predicting future ones is key to running a profitable operation. This involves market research, analysis of historical data and forecasting. By getting an accurate approximation of demand, businesses can take proactive measures to efficiently meet those needs.

Supply Management

It’s not just enough to understand the demand. A business must have a competent supply management system that can meet the anticipated demand. This is achieved by coordinating all elements of procurement, production, and logistics to effectively fulfill customer needs. A successful supply chain management strategy incorporates everything from sourcing raw materials, managing inventory, production planning, to eventual delivery.

Product Management

Product management is a very significant part of integrated business planning. It’s the process by which a business decides what products to offer and how to position them in the market. Product managers work cross-functionally with other teams like marketing, sales, and engineering, to ensure that the product aligns with company goals and customer requirements. They also analyze market trends, competitive landscape, and customer feedback to inform product features and enhancements.

Financial Planning

Lastly, financial planning provides the fiscal framework for integrated business planning. It involves budgeting, revenue projection, expense tracking, and monitoring financial performance against these predictions. A detailed financial plan enables a business to execute its strategies within available resources, capitalize on opportunities and respond timely to market changes. Financial planning is indispensable for a sustainable long-term business growth.

Each of these components works seamlessly with the others in integrated business planning. While demand, product, and supply chain management ensures that the business retains a competitive edge in the market, financial planning provides the necessary oversight to ensure the business remains profitable while doing so. This alignment across all the key functional areas is what makes integrated business planning so critical to the success of a business.

The Role of Integrated Business Planning in Corporate Decision Making

In a dynamic business environment, integrated business planning helps corporations quickly adapt and respond. It operates as a navigational tool, guiding decision-making processes at various levels of an organization, from operational to strategic.

Operational Decision Making

At the operational level, integrated business planning aids in managing immediate and short-term decisions. It provides a detailed view of the current business operations- from sales forecasts, customer demands, supply chain management to available resources.

For instance, consider a rise in demand for a product. An operational decision might involve assessing the production capacity and inventory levels, which integrated business planning can readily provide by unifying data from multiple business functions. This allows the organization to react swiftly and efficiently to unexpected changes.

Tactical Decision Making

Tactical decisions contributing towards achieving short-term goals also benefit from integrated business planning. It aids in providing a firm ground that aligns operational decisions with corporate strategy.

Key functions like marketing campaigns, collaborations, or prodigious investments often hinge on the insights captured through integrated business planning. It not only allows companies to seize up-to-the-minute market opportunities but also helps in mitigating potential risks.

Strategic Decision Making

At a strategic level – where decisions have long-term implications and contribute directly to the achievement of an organization’s mission – integrated business planning is instrumental. It provides organizations with forward-thinking views, predicting future scenarios, and laying out a roadmap to achieve the desired goals.

For instance, making decisions about entering new markets, launching new product lines, or obsoleting older ones are all powered by the insights from integrated business planning.

Thus, integrated business planning is central to decision-making processes, underpinning them with a clear, synchronized view of business functions. It enables corporations to respond effectively and swiftly to business environment changes, maintaining their competitive edge.

Integrated Business Planning and Risk Management

Integrated business planning (IBP) plays a crucial role in managing business risks. It enables organizations to align strategic, operational, and financial plans to achieve overall corporate objectives.

Assessing and Managing Risks with IBP

With IBP, an organization can continually assess potential risks and adjust its plans based on a comprehensive and timely understanding of possible implications. This process reduces the likelihood of sudden impact from unanticipated events and enhances the resilience of the business.

For instance, IBP can help in foreseeing economic downturns and prepare for them by diversifying income streams or increasing savings. Similarly, if a company anticipates a shortage of raw materials, it may use IBP to develop contingency plans such as seeking alternate supply sources, redesigning products, or adjusting manufacturing schedules.

Identifying Opportunities

On the flip side, integrated business planning also plays an essential role in identifying opportunities. This comprehensive approach can uncover potential synergies, efficiencies, and strategic initiatives that would otherwise go unnoticed. Leveraging integrated data, businesses can identify market trends early, allowing them to deploy new solutions or services ahead of their competitors.

Consider an organization that notices an increase in the use of sustainable materials via integrated data analysis. With IBP, the company can assess the possible financial and operational implications of shifting to eco-friendly materials, then devise strategies to capitalize on this trend.

Holistic View of Business Landscape

Furthermore, the holistic view provided by integrated business planning assists businesses with identifying both threats and opportunities. By providing viably comprehensive, cross-functional views of the business landscape, IBP allows companies to anticipate changes, react effectively, and seize the opportunities these changes bring.

In conclusion, integrated business planning’s role in risk management is immense. It promotes resilience by enabling organizations to anticipate potential risks and build strategies to navigate them. It also encourages innovation by highlighting emerging opportunities, leading to improved competitiveness and sustainability.

Tailoring Integrated Business Planning to Different Business Models

Applying integrated business planning (ibp) to service-based businesses.

The successful application of Integrated Business Planning (IBP) in service-based businesses can prove to be unique due to the nature of service delivery and customer expectations. Unlike in a product-oriented business where the primary goal is to manage the supply chain, service-based businesses encounter market variability and require a flexible planning process.

IBP helps these businesses by providing a platform to align their operational plans with strategic goals. For instance, the nature of the service can dictate the planning horizon and the frequency of revising plans. A healthcare provider may need a more immediate planning horizon compared to a consultancy firm due to the unpredictable nature of medical emergencies. Hence, IBP can be tailored to accommodate these different planning horizons.

Adapting IBP for Product-Oriented Businesses

Product-oriented businesses, on the other hand, often have tangible inventory and a visibly structured supply chain. Here, IBP comes in handy to integrate various components like sales, operations, and finance to ensure the business stays on track to achieve its strategic goals.

By synchronizing all critical business units, the company can ensure demand forecast accuracy, reduce stockouts and overstocks, and optimize cash flow. For instance, in a manufacturing business, the use of IBP can be pivotal in decisions ranging from raw material procurement to production planning to order fulfillment.

Implementing IBP in Hybrid Business Models

A hybrid business model, a mix of service and product-oriented business, calls for even more flexible application of IBP. Hybrid businesses need to balance the complexities of both models, and this can be achieved by integrating decisions about service delivery and product supply.

The outcome is a more harmonized strategic plan that accommodatively factors in both the intangible and tangible aspects of the business. For instance, a software company that offers both software products (product-oriented) and software services (service-oriented) may use IBP to synchronize the timeline for product development and service delivery.

In conclusion, while the fundamental elements of IBP remain the same, its implementation can and should be tailored to the unique needs of specific business models. The flexibility of IBP lies in its ability to adapt and accommodate the diverse patterns of businesses, ensuring alignment of strategic goals with operational plans. This is what makes IBP not just an effective planning tool, but an innovative business methodology.

The Relationship between Integrated Business Planning and Corporate Social Responsibility

In the application of integrated business planning, it’s important to consider its impact on a corporation’s social responsibility (CSR) practices. Integrated business planning has direct implications, as it can form a strategic platform for organizations to proactively manage their social and environmental responsibilities, in addition to driving financial performance.

When considering a business’s social and environmental responsibilities, it’s clear that these elements can significantly influence planning processes. This is because businesses, especially those operating in sensitive sectors such as mining or manufacturing, must account for the potential social and environmental impacts of their operations.

Effect on Planning Process

Understanding this, the planning process under an integrated business planning model needs to not only focus on traditional economic factors, but integrate CSR into the heart of their business strategies in a structured and systematic way. This might involve predicting potential social and environmental risks and planning appropriate mitigation strategies, or identifying socio-environmental initiatives and integrating them into the business’s operating model.

Asset Utilization and ESG Compliance

Moreover, integrated business planning can allow businesses to better utilize their assets in the service of both financial objectives and CSR. For instance, a manufacturing facility might plan to use more energy-efficient technologies, demonstrating commitment to environmental sustainability, while also potentially reducing operational cost.

Furthermore, a solid integrated business planning can enhance a company’s efforts in Environmental, Social, and Governance (ESG) compliance. It allows the business to consistently align its operational activities and financial planning with its CSR policies and governance standards. This, in return, may improve the public image, customer trust, and overall market reputation of the company.

Aligning Business Goals with Societal Values

Ultimately, a key aim of integrating CSR into the business planning process is to ensure that an organization’s business goals are well-aligned with societal values and environmental sustainability. Doing so not only helps businesses to fulfill their moral and civic duties, but is also increasingly recognized as a powerful driver of long-term financial performance.

Software Tools for Integrated Business Planning

In order to successfully implement integrated business planning (IBP), businesses need to make use of a variety of software tools. These tools not only make the complex process more manageable, but they also increase accuracy, improve collaborative efforts and provide meaningful insights for better decision-making.

Popular Software Tools

One popular tool is SAP Integrated Business Planning (SAP IBP) . This tool is lauded for its real-time supply chain management features. SAP IBP offers features for demand planning, supply and inventory planning, sales and operations planning, and response and supply control.

Another widely adopted software is Anaplan . Anaplan’s platform helps businesses model and visualize their data, and is known for its capability to handle extremely large data sets, making it ideal for large organizations.

Oracle Demand Management Cloud is also worth mentioning. It provides predictive analytics to understand and manage demand, and it integrates well with other Oracle applications, making it an attractive choice for businesses already using the Oracle ecosystem.

Kinaxis RapidResponse stands out for its scenario planning features, allowing businesses to simulate and compare various situations and their outcomes.

Role of Technology in IBP

Technology plays a pivotal role in IBP, simplifying and enhancing the process. With the vast amount of data businesses deal with today, manually managing such processes would be time-consuming and prone to human errors. Software tools automate most of these tasks, ensuring accuracy and efficiency.

Moreover, these tools often provide data visualization features, converting complex data into easy-to-understand charts and graphs. This not only makes data more accessible to all stakeholders, but also aids in quicker decision-making.

One significant advantage of using these tools is the ability to collaborate in real-time. Multiple users can work together on the same data sets, breaking down silos within the organization. With everyone on the same page, the alignment between different business functions improves, boosts the overall business performance.

Lastly, with features like predictive analytics and scenario planning, businesses can better anticipate future scenarios and prepare accordingly, reducing the risk associated with unforeseen changes in the market or supply chain.

Thus, with the help of software tools, integrated business planning becomes a more streamlined, accurate, and collaborative process.

Implementing Integrated Business Planning

Essential considerations for successful implementation.

To ensure a successful transition to using integrated business planning, several key aspects must be considered.

Employee Training

A central aspect of this change-over is the training of employees. Your employees need to understand the principles of integrated business planning and how they can apply these principles in their day-to-day activities. This training could be delivered through workshops, seminars, or e-courses, depending on what’s most effective for your employees.

Ongoing mentorship and support are also beneficial, helping employees adjust to the new system over time. By providing continuous learning opportunities, you keep your employees engaged and motivated, thus enhancing the adoption of integrated business planning.

Technological Requirements

The transition to integrated business planning is not only about changing mindset, but also about updating your technology stack, as this approach often relies on advanced software solutions. The exact technology needed may vary depending on the scale of your business and the nature of your operations, but a comprehensive business planning software suite is usually a baseline requirement.

Additionally, you would need to evaluate your current IT infrastructure to check if it can support the new systems. It might be necessary to upgrade certain components to ensure seamless operation. Remember, your new software should be user-friendly to promote ease of use among your employees.

Embracing Cultural Change

Implementing integrated business planning can bring about a significant shift in your company culture. As an approach that emphasizes collaboration and transparency, it requires a shift away from organizational silos. Employees at all levels need to get used to sharing information and making collective decisions.

Promoting this cultural shift can be challenging. Clear, effective communication will be crucial. Explain the advantages of the new system, engage employees in the planning process, and make sure everyone understands their responsibilities. Celebrating small victories can also help to promote positive feelings towards the change.

By paying attention to these critical aspects – employee training, technology, and culture change – you can lay the foundation for a smooth transition to integrated business planning.

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What Is SAP IBP (Integrated Business Planning)? (+ Examples)

This is about SAP IBP (Integrated Business Planning).

You’ll learn:

• What IBP is
• How SAP IBP is structured
• The features of SAP IBP

So, if you want to know what SAP IBP is and what it can do for you, you are at the right place.

Let’s jump right in!

What Is SAP IBP (Integrated Business Planning)?

Did you ever wonder how big companies manage their most important processes?

For example, how does a multinational company with more than 50,000 employees, 5,000 retail stores, and thousands of warehouses manage its payroll, inventory, supply and demand, and production?

Years ago, these companies conceded a certain level of inefficiencies and disjointed planning, but today’s companies are powered by digital transformation. 

Today businesses can find insights into data on their financial, operational, and sales plans thanks to smart software solutions and modern planning processes. This allows them to make more informed decisions and come up with better overall strategies.

To do this, companies can use Integrated Business Planning—a digital platform that helps them organize all of these processes.

SAP IBP is one of the most popular such platforms. Let’s take a look at SAP’s Integrated Business Planning solution:

• Its history
• And much more

What Is Integrated Business Planning?

Integrated business planning is an advanced approach to business organization that merges operational and financial data across the whole business. It allows organizations to maximize results by connecting sales, financial, operational, and other sectors. It also gives businesses greater visibility of their whole process, from the entire supply chain to sales operations.

You can use Integrated Business Planning to manage different parts of a company such as:

• Finance and operations
• Supply and demand
• Cash flow, cost, and revenue
• Business strategy
• Inventory optimization

An IBP process is used to balance all these (and more) objectives so that the company achieves the best results going forward. 

To ensure this happens, IBP uses prescriptive analytics, which is the application of mathematical sciences and statistics to suggest business decisions based on data.

This goes one step further than predictive analytics which uses mathematical data to predict what’s going to happen.

Simply put, using prescriptive analytics, IBP tries to answer the question of what is likely to happen, tells you why it’s going to happen, and suggests actions you can take to benefit from these predictions.

While IBP is an organizational approach, it can also be referred to as software. In this case, we’re talking about a digital platform that uses advanced analytics to help you manage all these processes like:

• Supply planning
• Supply chain management
• Operations planning

Before IBP: Sales & Operations Planning (S&OP)

As a process, Integrated Business Planning is an heir to Sales and Operations Planning (S&OP) . 

In fact, IBP has been criticized for not being all that different from S&OP—it’s even been called a marketing hoax . 

IBP, however, is a broader term than Sales & Operations planning. It combines S&OP with EPM (Enterprise Performance Management) to give companies both a financial and an operational overview of the business. 

IBP allows organizations to create what-if scenarios that boost the responsiveness of the supply chain and improve the way that manufacturers govern and plan the business.

Source: Semantic Scholar

Here are some ways in which IBP differs from S&OP:

• Financial performance management: IBP helps you express business goals in financial terms. So you can set financial targets and see how well your company is doing relative to those targets. It helps you measure the impact of different scenarios through a financial lens.
• Supply chain planning: With IBP, you can not only plan your supply chain, but also measure its performance. This means you can use IBP to find those decisions that increase your profitability and create production plans based on valuable information.
• Long-term planning: S&OP usually supports medium-term planning (for around two years). IBP aligns with long-term strategies while also supporting shorter-term operational plans. Also, since you can use it to measure financial performance, you can also use it to determine long-term budget needs.

What’s Wrong With Traditional Planning? 

Before we get into SAP IBP and its features, let’s answer one important question: 

What’s wrong with traditional business planning? 

In other words, why do companies need IBP software at all?

First, without IBP there is only the bare minimum of information about how each department is functioning and the corresponding impact on the bottom line.

Second, in traditional planning, there’s often a disconnect between your strategies and operations. This results in lower competitiveness because the business is slow at reacting to market changes.

Third, IBP promotes collaboration. Without it, departments tend to only focus on their own activities and results, rather than feel like part of a larger company team.

Overall, IBP promotes a holistic approach that helps you see the bigger picture and make smart decisions with all aspects of your company in mind.

Who Is SAP?

Let’s get to the details: SAP SE and its IBP platform.

SAP SE, simply known as SAP, is an international software company based in Germany . They make ERP (Enterprise Resource Planning) software that helps companies manage and gather data from all parts of their business.

The definition of SAP is:

SAP (Systems, Applications, and Products in Data Processing) SE (Societas Europaea) is a European worldwide operating software company that makes software for the management of business processes suitable for organizations of any size and industry.

It’s the largest software company outside of the U.S. by revenue.

What Is SAP IBP?

Let’s take everything we’ve learned and put it all together: SAP IBP is an Integrated Business Platform developed by the company SAP SE. 

Like most other business applications from SAP, the platform runs on SAP HANA.

SAP IBP lets you plan all kinds of business activities. 

Thanks to the in-memory processing functions of SAP HANA, their IBP platform provides companies with end-to-end visibility of: 

• Supply chain data

This helps departments such as sales, finance, and C-level management to create plans and business strategies.

Source: SAP

Let’s put it like this: companies conduct periodic reviews of their supply, demand, sales performance, budgeting, and other processes to identify potential issues that can affect their business targets. 

SAP IBP lets companies do more frequent reviews, compare planned figures to actual ones, and take a more active approach to planning.

Furthermore, SAP HANA’s processing capability allows companies to run what-if scenarios with real-time data in order to get statistical input and make smarter decisions.

The Capabilities of SAP IBP

More specifically, SAP IBP allows you to do the following:

• Predict and meet customer expectations: You can use SAP IBP’s predictive modeling and demand sensing to improve your responsiveness and forecast accuracy. The platform makes it easy to react to demand changes and promise deliveries based on commitments.
• Make better planning decisions: As mentioned, SAP IBP uses advanced analytics and machine learning algorithms. You can use these to do effective top-down and bottom-up forecasts. You can also leverage supply planning and set inventory targets.
• Align planning processes: IBP’s simulations and analytics can help you manage planning processes at operational, strategic, and tactical levels. What-if scenarios enable you to make better decisions and increase business predictability.
• Improve supply chain visibility: IBP gives you actionable insights from your entire supply chain that enable you to make timely adjustments. You can take into account data like risk, weather, and sustainability. The platform also allows you to work with your suppliers and manufacturers for easier planning.

The Structure of SAP IBP: The Five Components

SAP Integrated Business Planning is composed of four key components, plus a fifth that serves as a centralized visual interface. Each component is an independent component so you can just use what you need.

Source: Salt-solutions.de

This is a quick overview of those components:

• Sales and Operations: Provides a sales plan to help you get the best business results according to your corporate strategy. You can align your short-term and long-term strategies to increase sales, improve market share, or achieve any other financial goal.
• Demand: Predicting product demand is one of the most important success factors in business planning. The SAP IBP for Demand allows you to leverage machine learning to get demand forecasts, including temporary fluctuations.
• Inventory: The Inventory component sets forward-looking inventory targets across your supply chains. You get real-time data so you can see where your products are in the supply chain at any time. You can optimize the stock targets for your whole supply chain.
• Response and Supply: This module lets you react to any ad-hoc changes. Using what-if scenarios and simulations, you can predict changes and make adjustments accordingly. Response planning calculates demand variability and helps you meet your fill rate while keeping track of your costs.
• Supply Chain Control Tower. The Tower acts as your dashboard—an analytics platform that gives you real-time data. It provides end-to-end supply chain visibility. The module also allows you to set up alerts when there are potential interruptions in your supply chain.

Now, let’s dig into each of these modules or component:

SAP IBP for Sales and Operations

SAP Integrated Business Planning for S&OP is at the very core of the whole platform. It’s also a starting point for many companies using SAP IBP—in many cases, companies start out with long-term sales planning which they then need to synchronize with the rest of the organization like:

• Procurement

This module provides a holistic view of your supply chain network by simulating financial, supply, and demand models. 

You can see everything in the supply chain, from manufacturing and suppliers to customers and distribution units.

The S&OP component also provides you with all the tools you need to create supply plans across all departments. You can use it to balance your product mix, service levels, inventory, and financial operations.

The module uses the familiar Microsoft Excel interface, so that everyone feels comfortable with the system. Supply chain management is usually handled through spreadsheets, so this is a natural transition for most managers.

SAP IBP for Demand

This module combines demand sensing models that use real-time data with traditional demand planning tools. 

Using machine learning, historical data, trends, and seasonal patterns, the demand planning module excels at long-term demand forecasting.

Like the previous module, this one also uses a Microsoft Excel interface. 

Besides that, you can also access some other apps based on the SAP HANA database like the SAP ERP and SAP APO. These can be useful if you want to access transactional and master data.

The SAP IBP for Demand module also has demand sensors. The sensors monitor your incoming data on a regular basis and notify you when a forecast target isn’t being met. This way you always have the latest info and can adjust your approach accordingly.

SAP IBP for Inventory

SAP IBP for Inventory component lets you to model your whole inventory network, from your supplier to your customers. It gives you inventory management tools and lets you identify key drivers so that you always have the right amount of inventory.

So, how does that work in practice?

For example, let’s say a company is working in a multisourcing environment—they have multiple suppliers and multiple warehouses all over the country. 

The IBP for Inventory component would use all the transportation costs, targeted service levels, and fill rates to determine how much of each product’s inventory it should have in each location.

Like other components in the SAP IBP suite, this one uses real-time data, so you’ll always know where your products are in the supply chain.

You can also use inventory planning simulations that take into account economic shifts, changes in demand, and differing customer expectations. This technique uses real-time what-ifs to help you figure out where your weaknesses are and how to strengthen them. 

SAP IBP for Response and Supply Planning

This component helps you simulate and evaluate planning scenarios so that you can achieve a balance between supply, demand, and capacity. It also considers inventory, procurement, production, and warehousing costs so you can get a financial insight into your supply planning as well.

The keyword here is response, meaning that the Response and Supply Planning component enables you to adapt quickly to your supply chain model. You can use what-if analyses to predict potential uncertainty and plan for it.

This module takes into account the demand variability and helps you allocate supplies to achieve the highest service level and fill rate. 

Since you can use SAP IBP to get measurable financial outcomes, the Response and Supply Planning module can help you perform all of these actions while keeping costs as low as possible.

The component has pre-made templates for what-if analysis to make things easier, but you can make your own in no time. 

SAP Supply Chain Control Tower

The last component is an analytics tool, a dashboard that allows for a real-time, end-to-end overview of your entire supply chain. 

Not only can the component alert you any time there’s a potential supply chain disruption—it can dig deep and tell you where it came from.

Source: Mccoy partners

The Supply Chain Control Tower provides what-if analyses to help you make quick, informed decisions. This data isn’t only available to you: partners in your supply chain can also have access to real-time alerts that might lead to delivery delays or exceptions.

All the tools in this component are highly visual, so you can share the tables and charts with others without them having to be great at numbers or tables.

Ultimately, the Control Tower ensures your company can make timely deliveries with better inventory management and fewer operational risks.

The Benefits of SAP IBP

Here are a few reasons companies might consider using SAP IBP for supply chain management, inventory optimization, production planning, and other processes:

• Better data collection: Companies using old S&OP technology often have to collect data manually from sources like third-party applications and spreadsheets. SAP IBP lets you collect data more quickly and more efficiently, saving you and your team time.
• Managing fluid data: The biggest challenge with Integrated Business Tools, in general, is that inventory levels change constantly—they’re fluid. SAP IBP lets you view those levels as dynamic data, rather than just static data about how many items you’ve got in stock.
• Better data presentation: Many old S&OP tools present data in tables that can be confusing to make sense of. SAP IBP offers dashboards and similar analytics tools that make it easier to interpret data in moments. These tools also make it easier to share data across departments.
• Quick installation: SAP IBP is a cloud solution, which means that you don’t have to order hardware or have data warehouses. SAP IBP implementations typically don’t take more than a few days.

SAP IBP Implementation

Let’s see what SAP IBP implementation methodologies you can use:

The go-to model for SAP implementation has been ASAP (Accelerated SAP). This methodology uses the waterfall model which employs a linear structure where the deliverables in each phase depend on the previous one.

The model has five stages:

1. Project Preparation: at this stage, it’s important to identify goals and get stakeholder support. SAP and the client also work together on establishing a reliable process for making decisions.

2. Business Blueprint: at this point, SAP needs to get relevant information about the company. These blueprints come in the form of questionnaires to determine the company’s future business goals and processes.

3. Realization: the SAP team configures what’s called the baseline configuration, which is the basic setup based on the business blueprint the company delivered. Then, the company’s implementation team fine-tunes the system to make it perfectly suited to their business needs.

4. Final Preparation: preventative maintenance checks are performed to make sure the SAP system performs as it should. Now is the time to do workload testing (daily load, peak volume, and similar types of stress testing), along with integration or functional testing.

5. Go-Live and support: the final stage is less important—going live is just a matter of minutes. However, ensuring that the Go-live stage goes smoothly and without any hiccups will depend on the attention you paid during the previous phases.

A possible problem with this model is that all of the documentation goes on earlier in the process, culminating in the business blueprint document. This means that the company gets to see and use SAP IBP later in the process, which can lead to a mismatch between the company’s expectations and the actual implementation.

To overcome this, some companies use an adaptive planning model like the agile methodology to implement SAP IBP. This is a more iterative process, in which the SAP team engages the company to share its business requirements (called user stories in Agile). They then capture these stories and deliver them iteratively (called sprint cycles ) in SAP applications.

You can use a hybrid approach to IBP implementation, where the five stages are combined with Agile methodology.

Frequently Asked Questions About SAP IBP

Finally, here are some frequently asked questions about SAP IBP:

What Is The Difference Between SAP IBP and SAP APO?

SAP IBP is a much more advanced solution that addresses some of SAP APO’s weaknesses and is meant to replace the solution. Standard support for SAP APO will be maintained until 2025 .

SAP IBP is superior to SAP APO for multiple reasons. For example, in SAP IBP, the data is presented in a more coherent way, with graphs and dashboards. It also has a Microsoft Excel interface that makes it easier for planners to perform familiar actions.

SAP APO also doesn’t have demand sensing and multi-echelon inventory optimization that are included in the SAP IBP for Demand and SAP IBP for Inventory, respectively.

Is SAP IBP Available as an on-Premise solution?

According to the SAP Answers forum , SAP IBP as a whole is restricted to the cloud only. On the other hand, the Sales and Operation Planning module is available as an on-premise solution.

However, the SAP Support seems to suggest how implementation on an on-premise system is possible.

To get the most accurate information, you’ll want to contact SAP directly and ask them about your particular business and its needs.

What Are SAP IBP’s Competitors?

There are several software solutions that offer similar solutions to SAP’s Integrated Business Planning platform.

Here are some of them:

• Oracle S&OP Cloud. This cloud-based solution from Oracle aligns supply, demand, and product plans with the financial targets of a company.
• Kinaxis RapidResponse S&OP. This S&OP platform allows you to create a sales and operations plan that you can collaborate on. You can also align that plan with your financial goals.
• NetSuite. The software from NetSuite lets you set up your inventory storing locations and improve your on-time delivery metrics. 
• Demand Works Smoothie. This solution is browser-based, which makes it easily deployable. Much like SAP IBP, they use a highly graphical and interactive interface.

The ERP market is incredibly competitive. There are dozens of other solutions that do what SAP IBP does: 

• Production planning
• Statistical forecasting
• Scenario planning
• Inventory management

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SAP ERP modules overview graphic inside.

• Data Analysts

Unveiling the Power of Integrated Business Planning (IBP) in Supply Chain Excellence

• 7 minute read

Written by:

Introducing Raghu Madhav Tiwari, a highly skilled data scientist with a strong mathematical foundation, and a passion for solving complex business challenges. With a proven track record of developing data-driven solutions to drive business growth and enhance operational efficiency, Raghu is a true asset to any organization. As a master of the art of data analysis, Raghu possesses a unique ability to convert raw data into valuable insights that lead to tangible results. Armed with exceptional critical thinking skills, Raghu employs a meticulous approach to problem-solving that involves leveraging cutting-edge statistical and mathematical techniques to drive informed decision-making. In addition to his impressive analytical acumen, Raghu is also a gifted communicator and writer, regularly sharing his insights through engaging articles on various topics related to his field of expertise. Medium: https://raghumadhavtiwari.medium.com/ Github: https://github.com/RaghuMadhavTiwari

Integrated Business Planning (IBP) plays a defining role in the overall growth of the business.  In the dynamic business landscape companies are looking for solutions that can seal the gap between various business functions that drive efficiency and agility.

Since the supply chain plays an integral role in the growth of the business, IBP or Integrated business planning in the supply chain becomes crucial.  

In this blog, we will delve into the intricacies of Integrated Business Planning, exploring its role in the supply chain, providing examples, understanding its implementation in SAP, exploring the framework, and deciphering the crucial processes and execution strategies.

Integrated Business Planning in the Supply Chain

Integrated Business Planning is a strategic approach that integrates various business functions to streamline decision-making processes across an organization. In the context of the supply chain, IBP aims to align demand, supply, and finance functions, breaking down silos and fostering collaboration. By providing a holistic view of the entire supply chain, organizations can enhance their responsiveness to market changes, minimize risks, and optimize resource utilization.

Key Components of Integrated Business Planning

Demand planning.

At the core of Integrated Business Planning is demand planning. This component involves forecasting future demand based on historical data, market trends, and other relevant factors. By aligning demand projections with overall business objectives, organizations can optimize inventory levels and ensure a responsive supply chain.

Inventory Management

Another integral component of IBP is inventory management. This entails overseeing the entire inventory lifecycle, from procurement to storage and distribution. By integrating inventory management into the planning process, organizations can prevent stockouts, minimize holding costs, and enhance overall supply chain efficiency.

Financial Planning

Financial planning forms the financial backbone of Integrated Business Planning. This component involves aligning the budgeting and financial forecasting processes with operational plans. By integrating financial considerations into the overall planning framework, organizations can ensure that strategic decisions are financially viable and contribute to the bottom line.

Sales and Operations Planning (S&OP)

Sales and Operations Planning is the bridge that connects demand planning, inventory management, and financial planning. It involves a collaborative process where cross-functional teams work together to align sales forecasts with operational plans. S&OP ensures that all departments are on the same page, fostering coordination and minimizing conflicts.

Collaboration and Communication

While not a traditional “component,” effective collaboration and communication are intrinsic to successful Integrated Business Planning. This involves breaking down silos between departments, fostering transparency, and ensuring that information flows seamlessly across the organization. Clear communication enhances the effectiveness of the planning process.

Technology Integration

In the digital age, technology plays a pivotal role in the key components of IBP. Advanced analytics, artificial intelligence, and collaborative platforms empower organizations to make data-driven decisions. Technology integration ensures that the planning process is not only efficient but also adaptable to the dynamic nature of modern business.

Risk Management

A proactive approach to risk management is a crucial component of IBP. This involves identifying potential risks, assessing their impact on operations, and developing strategies to mitigate these risks. By incorporating risk management into the planning process, organizations can navigate uncertainties with resilience.

Scenario Planning

Scenario planning involves considering various possible future scenarios and developing strategies to address each scenario. This forward-thinking approach allows organizations to be agile in the face of changing market conditions. Scenario planning is a proactive component that adds a layer of flexibility to the IBP process.

Continuous Improvement

The final key component of IBP is a commitment to continuous improvement. This involves regularly evaluating the effectiveness of the planning process, identifying areas for enhancement, and implementing changes. A culture of continuous improvement ensures that IBP remains a dynamic and responsive strategy for the organization.

Integrated Business Planning Example

Consider a consumer goods company that utilizes IBP to align its sales forecasts with production schedules and inventory levels.

Through a unified platform, the sales team can communicate market demands directly to the production and procurement teams, ensuring that the right products are produced at the right time. This prevents overstock or stockouts, ultimately improving customer satisfaction and operational efficiency.

Nowadays companies have the option of choosing Integrated Business Planning in SAP. Through this, companies can leverage advanced analytics, machine learning, and real-time data to make informed decisions across the entire supply chain.

Integrated Business Planning Framework

Integrated Business Planning (IBP) is a strategic management process that aligns various business functions to ensure a cohesive and synchronized approach to planning and decision-making. It integrates key business processes, such as finance, sales, marketing, operations, and supply chain, to create a holistic view of the organization’s performance. Here is a general framework for Integrated Business Planning along with an example:

Strategic Planning:

• Define the organization’s long-term goals and objectives.
• Identify key performance indicators (KPIs) that align with the strategic direction.

Sales and Operations Planning (S&OP):

• Align sales forecasts with production and inventory plans.
• Create a consensus plan that balances demand and supply.

Demand Planning:

• Use historical data, market trends, and customer feedback to forecast future demand.
• Collaborate with sales and marketing teams to understand market dynamics.

Supply Planning:

• Evaluate the capacity and capabilities of the supply chain.
• Ensure that resources are available to meet demand in a timely and cost-effective manner.

Financial Planning:

• Develop a financial plan that aligns with the operational plans.
• Monitor and manage financial performance against targets.

Scenario Planning:

• Assess various scenarios and their potential impact on the business.
• Develop contingency plans to address potential disruptions.

Performance Monitoring:

• Implement key performance indicators (KPIs) to measure the success of the integrated plan.
• Regularly monitor and analyze performance data to identify areas for improvement.

Collaboration and Communication:

• Foster communication and collaboration among different departments.
• Ensure that information flows seamlessly across the organization.

Let’s consider a manufacturing company that produces electronic devices. The company wants to increase its market share over the next five years. The Integrated Business Planning framework is applied as follows:

• Set a goal to increase market share by 15% in the next five years.
• Identify KPIs, such as revenue growth, customer satisfaction, and operational efficiency.
• Align production plans with the expected increase in sales.
• Ensure that inventory levels are optimized to meet customer demand without excessive holding costs.
• Analyze historical sales data and market trends.
• Collaborate with the sales and marketing teams to understand the impact of promotions and new product launches.
• Assess manufacturing capacity and identify potential bottlenecks.
• Evaluate the reliability of suppliers and establish contingency plans for any disruptions.
• Develop a budget that supports increased production and marketing efforts.
• Monitor financial performance regularly to ensure alignment with the strategic goal.
• Consider scenarios such as supply chain disruptions, economic downturns, or unexpected increases in demand.
• Develop plans to mitigate risks and capitalize on opportunities.
• Track KPIs to measure progress toward the goal of increasing market share.
• Adjust plans as needed based on performance data.
• Facilitate regular meetings and information-sharing sessions among departments.
• Use technology and collaborative tools to enhance communication and coordination.

Integrated Business Planning Process

step-by-step explanation of the Integrated Business Planning process:

Strategic Direction:

• Objective: Define the long-term goals and strategic direction of the organization.
• Conduct a thorough analysis of market trends, competitive landscape, and internal capabilities.
• Engage with key stakeholders to establish a clear vision and strategic priorities.
• Objective: Understand and forecast customer demand for products or services.
• Analyze historical sales data, market trends, and external factors influencing demand.
• Collaborate with sales and marketing teams to gather insights and input.
• Objective: Align the organization’s capacity and capabilities with anticipated demand.
• Evaluate manufacturing capacity, production capabilities, and resource availability.
• Identify potential constraints and bottlenecks in the supply chain.
• Objective: Achieve consensus on a balanced plan that aligns demand and supply.
• Collaborate with cross-functional teams to reconcile demand and supply plans.
• Resolve conflicts and establish a unified plan that meets organizational goals.
• Objective: Develop a financial plan that supports the operational and strategic objectives.
• Align budgeting and financial forecasting with the integrated demand and supply plans.
• Monitor financial performance against established targets.
• Objective: Anticipate and prepare for potential disruptions or changes in the business environment.
• Identify various scenarios that may impact the business, such as market fluctuations or supply chain disruptions.
• Develop contingency plans and strategies for different scenarios.

Performance Monitoring and Measurement:

• Objective: Monitor key performance indicators (KPIs) to track the success of the integrated plan.
• Establish relevant KPIs for each functional area and the overall organization.
• Objective: Foster collaboration and communication across departments.
• Facilitate regular meetings and communication channels between different functional areas.
• Utilize technology and collaborative tools to enhance communication and information sharing.

Continuous Improvement:

• Objective: Iteratively refine and improve the planning process based on feedback and changing circumstances.
• Conduct regular reviews and evaluations of the IBP process.
• Solicit feedback from stakeholders and make adjustments to enhance effectiveness.

Feedback and Adjustment:

• Objective: Gather feedback from the execution of plans and adjust future plans accordingly.
• Evaluate the performance of the integrated plan against objectives.
• Adjust the plan based on lessons learned and changing business conditions.

Frequently asked questions

Why is an integrated business plan important.

An integrated business plan is crucial for aligning various functions, fostering collaboration, and adapting to market uncertainties. It ensures a unified strategy, enhancing efficiency and decision-making.

What is the difference between IBP and S&OP?

While both involve planning, Integrated Business Planning (IBP) is a broader process that includes financial planning, demand forecasting, and more. Sales and Operations Planning (S&OP) specifically focuses on aligning sales forecasts with operational plans.

What is the meaning of integrated planning?

Integrated planning refers to a holistic approach that synchronizes various organizational functions. It involves aligning strategies, processes, and resources to work cohesively toward common goals, promoting efficiency and adaptability.

What is an integrated strategic business plan?

An integrated strategic business plan combines strategic goals with operational plans, financial considerations, and cross-functional collaboration. It provides a comprehensive roadmap for an organization, ensuring that every aspect works in tandem to achieve long-term success.

In conclusion, Integrated Business Planning stands as a strategic imperative for organizations looking to enhance their supply chain efficiency.

By breaking down silos, fostering collaboration, and leveraging advanced technologies, IBP empowers businesses to make informed decisions, optimize resources, and respond swiftly to market changes.

As the business landscape continues to evolve, Integrated Business Planning will undoubtedly play a pivotal role in shaping the future of supply chain management. Additionally, newer technologies like

Data Science is reshaping the way organizations operate.

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• Integrated Business Planning

What is Integrated Business Planning (IBP)? And what are the similarities, but also differences when compared to S&OP? In this article, Inchainge discusses everything you need to know about IBP.

What is integrated business planning (IBP)?

Integrated Business Planning (IBP) is the business planning process that extends the principles of Sales and Operations Planning (S&OP) throughout the value chain . It is to create a bridge between strategy and execution. IBP is a next step for companies that already have an S&OP process in place. It is a next step because it integrates the Financial Planning Cycle. The financial function will become part of this cross-functional process. In most companies the business owner of this process will change as well.

Similarities between IBP and S&OP

Integrated Business Planning and Sales and Operations Planning have several similarities between them. These are as follows:

• Monthly process
• Cross-functional approach
• Driven by business strategy
• Tactical planning at an aggregated level

Differences between IBP and S&OP

However, Integrated Business Planning includes content on top of Sales and Operations Planning:

• Financial function involved
• Integration financial planning cycle, like financial budget and forecast
• From volume planning to volume and value planning
• It drives the overall business performance

How does the IBP process work?

Companies have an annual budget cycle, based on their strategic plans and targets. The annual budget projects planned revenues and costs for the year.

In traditional S&OP companies go through a monthly process during which they project for the next 6 to 24 months where demand will go, and what resources need to be available to meet that demand. When gaps are discovered between expected demand and available resources looking this far ahead into the future, this often provides ample time to balance supply and demand, so that by the time real customer orders are submitted, demand can be met.

Suppose that during this monthly S&OP cycle, one would also look 6 to 24 months into the future where expected revenues and costs will go. And how these financial figures would look compared to the annually budgeted revenues and cost. Most likely gaps will occur here as well between the annually budgeted numbers and the monthly updated numbers. Actions could then be taken to address these gaps. Integrating a financial view. When this happens, we actually practice IBP. In IBP the relationship with the financial performance management cycle is very important. Budget and financial forecasting must be aligned and integrated with the steps from the original S&OP cycle.

The challenges of IBP

IBP is a next step in maturity after companies have implemented a proper S&OP process. Integrating finance sounds simple but is not easy at all. People from the physical supply chain side of the business, often speak a different language than people who operate on the financial side. Supply chain people often speak about units, products, and product families, whereas financial people often speak about money, currencies, etc. That also causes both functional areas to be assessed differently with the KPIs that they use. This calls for other participants in the IBP process, compared to participants in the S&OP process.

The 8 common pitfalls when implementing IBP

Be aware of the following risks related to integrated business planning:

• Lack of commitment in some of the needed departments
• If the S&OP process was not yet implemented or stable, IBP is too big of a step
• Targets and forecasts are mixed
• Information not available
• Discussion about numbers instead of the underlying assumptions
• Discussing only short horizon instead of midterm
• Too granular plans and discussions
• Thorough understanding of trade-offs is lacking

Want to know more? Experience IBP!

Because IBP is simple but not easy, a real-life experience creates enormous value for learning about this topic. The participants will feel and recognize the important issues in this process. In our business simulation game, The Cool Connection ,  we have incorporated the most important functions and decisions.

In this business game the team is forced to make a yearly financial budget and quarterly forecasts. The objective is to close the gaps between prediction (the budget and forecasts) on one hand and attained performance on the other. The best performing teams are both profitable and predictable at the same time. In business game The Cool Connection the team is almost experiencing a real-life IBP process.

Besides our business games, you can learn more in our articles about topics such as Total Cost of Ownership (TCO) , strategic alignment and external alignment and collaboration .

Now you know

Now you know that IBP is a next step for companies that already have an S&OP process in place, by integrating the financial planning cycle in this cross-functional process. IBP prompts companies to include planned revenues and costs in their annual budget cycle. Budget and financial forecasting must be aligned and integrated with the steps from the original S&OP cycle. Integrating finance sounds simple but is not easy at all. Supply chain people and finance people tend to speak a different language. Make sure to be aware of the 8 common pitfalls when implementing IBP.

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What is IBP? (Integrated Business Planning)

Video: What is IBP?

Why is IBP important?

IBP Framework

IBP best practices by o9 solutions

Summary: ibp software by o9 solutions.

Integrated Business Planning is a best-practice process that aligns Commercial, Financial and Supply Chain activities. In doing so, they are performed as coordinated business decisions with the intent to deliver increased revenue, improved service levels, reduced supply chain costs, greater productivity, better cash flow and higher profits. In short: your integrated business planning process (IBP process) will never be the same.

Integrated business planning (IBP) is important because functional and technical silos across organizations result in flawed decision-making. Within every enterprise there are many thousands of decisions being made and business processes to be aligned, resulting in a final business strategy.

Among those decisions are: commercial decisions related to new products, marketing and sales decisions, supply chain decisions (across the full supply chain and supply chain management, related to positioning of material and capacity and then fulfilling customer demand). Last but not least, financial decisions (related to setting budgets and targets, allocating resources and the forecast that you hold to external stakeholders).

Making the right decisions is not easy and many decisions counteract each other, which may lead to poor business outcomes. Let’s look at some of the fundamental challenges that enterprises face.

1. Isolated decisions are being made

Planning decisions need to be made in a synchronized fashion, but for practical purposes organizations sometimes have to create functional planning departments.  For example, the demand planning and supply and operations planning processes are used to manage the supply chain. Then, you have commercial & sales and operations planning processes driving commercial decisions and finally, financial planning processes to set the budgets and targets.

These plannings and processes are the core of functional planning processes, but they are largely operating in silos today.

2. Cycles are not properly synchronized

Not only do organizations have departmental silos, a second challenging factor is that the siloed teams perform their planning processes in what are called ‘planning cycles’.  A business planning process can involve daily planning cycles for operational planning, weekly and monthly planning cycles for tactical planning and annual cycles for strategic planning.

If these planning cycles are disconnected then the execution of each can be flawed and will almost certainly end up deviating from the intended strategy. In short: an integrated business planning process is very important to connect the planning teams, their processes and their schedules.

3. Technology stacks don’t communicate

The third major challenge to successful Integrated Business Planning (IBP) is the decision-making technology stacks. Historically, many technologies have been used to aid enterprise decision-making and performance management. There are data stacks, planning stacks and reporting stacks. Plus, there’s technology for importing data and then technology used for insights, learning and algorithm development.

All of these types of technology aid decision-making and may lead to integrated business planning (IBP). Still, they can also make the lives of business users much more complex and the adoption of integrated business planning (IBP) more difficult to achieve.

Integrated Business Planning

Functional silos, disconnected cycles and separated technology stacks mean that commercial, financial and supply chain decisions are not easily synchronized. As a result, enterprises will typically suffer from service level issues, inventory issues, excess costs in the supply chain and lower returns on investment from marketing and sales spend.

What this translates to is a significant amount of value leakage. Integrated Business Planning is the strategy and methodology of bringing all these planning processes together and connecting them to respond effectively to market risks and opportunities. IBP can help with your business performance – for example supply chain optimization – and help to develop an effective business planning process, enabling the right decisions to be made to reach your company’s business goals.

Building a superior forecasting model with AI/ML

AI/ML-based forecasting models have become essential. Learn how to build the right planning solutions now.

Integrated business planning framework

Integrated business planning (IBP) is a journey with many steps requiring a roadmap of prioritized actions that drive quick wins and sustainable benefits. But, before you can plan that roadmap and the business planning process, you need to understand the basic elements of an IBP framework (which we detail below) alongside the benefits each element brings to the table.

Establishment of accountability

The first element to consider is defining the correct roles and responsibilities as well as setting effective governance to ensure the establishment of accountability.  Clear roles, decision rights, policies, and incentives create an atmosphere that enables everyone to work together as an organized unit to achieve the company’s mission.

Alignment with Leadership

The next element is to detail the objectives with a high-level action plan and seek leadership alignment.  Having a clearly defined aim sets the path for integrated business planning (IBP) and defines what IBP will deliver.  Strategic plans, strategic goals, a business strategy as a whole and scenario planning will help with defining a clear mission.

Alignment among the leadership team is vital if integrated business planning is to achieve its goals.  A clear mission provides the pathway people can follow and ensures that the actions and goals are correct, rather than simply the integrated planning process itself.

Achieve Organizational alignment

When processes are cross-functional and designed to align the organization in one desired outcome, you can focus on meeting the goal instead of maintaining the process. This is why both scenario planning and business strategy are important.

You can write down different processes and define operations planning next to financial planning. Still, if the overall strategy is not clear enough, it’s impossible to reach an organized cross-functional process.

Build Talent base

Build a talent base with the skills and core competencies essential to IBP, such as strategic planning, financial planning, and supply chain planning. With skilled and experienced employees on board, you’ll be able to implement IBP across the enterprise more effectively.

Not only that, but new possibilities will equate to new opportunities and the imagined future state will garner enthusiasm and bring new energy to the business.  Successful Integrated business planning will transform process efficiency and motivate the workforce to achieve even greater improvements.

Real-time analytics

With access to real-time analytics, you can run “what-if” scenarios, quickly respond to disruptions and market adjustments, and make insight-driven decisions the core of your business planning. This helps you to be proactive and stay ahead of your market instead of relying on reactive decisions. This way, tasks like financial forecasting and predicting business performance become simpler and easier.  Scenario planning encourages thinking about ranges of possibilities.  Allowing planning teams to have a recognised and structured approach to future states reduces the likelihood of being blindsided by events and being unable to react to risks or leverage opportunities.

Usage of technology

Since IBP is a cross-functional initiative, you need an agile, flexible, cloud-based technology to provide a central platform for IBP collaboration and execution.  Next-generation planning solutions will provide advanced AI/ML capabilities, but equally important for integrated business planning should be the collaborative functionality, dashboards, volume-to-value conversions, metrics and exception handling, automation, performance and security.

The technology you use for implementing integrated business planning throughout your entire business should not only help supply chain management, but also the integrated processes used by the highest management team.

o9 solutions came up with a single integrated plan for all planning processes across the horizon. o9’s Graph Cube Data Model allows for aggregation and disaggregation to the right level of detail for each planning horizon to support end-to-end synchronization.

09 solutions offers  IBP software  that can be used throughout the entire organization and will solve the future demand of business-wide business planning. A few reasons why this software works:

Complete P&L and KPI visibility

The software summarizes scenarios with connected financial KPIs and strategic plans. It understands financial metrics, such as margins, revenues, and working capital and molds this into operational data.

With the help of the Graph Cube Data Model, most companies can use financial performance, financial reasoning and reconciliation within the integrated planning process of your business.

Cross-functional and interactive plan review & publication

o9’s integrated business planning uses Natural Language Processing (NLP) based search & discovery. With this IBP process platform, you can create interactive views instead of static dashboards and turn cross-functional processes, review and alignment into a fluid process.

Live on platform meeting capability

Your management or business leaders can create live presentations step by step with live data for S&OP meetings, removing hundreds of hours of manual work. The business planning process will take up less time, and the complex supply chains and their ways of working will be easier to understand.

Big data enabled

With the help of the IBP software, you can leverage real-time structured and unstructured data from the market, customers, and operations to drive insights into trends and potential disruptions and thus set up a strategic plan for the future.

o9 Solutions’ Integrated Business Planning provides an intelligent, automated planning solution that bridges all the functional silos across the planning cycles in a unified technology stack that can drive up user adoption and enable better decision-making.

o9’s Integrated Business Planning solution uses automation to bring together finance, marketing, sales, and supply chain to address risk and opportunities in an online live platform.

It provides full visibility and complete transparency on the gap vs. the annual strategic plan in revenues, cost, margin and volumes, and therefore enables management to quickly come up with a strategic plan and informed decisions. This results in predictive analytics, profitable growth that balances strategic, financial and operational objectives and many more benefits for your business.

Want to learn more about Integrated Business Planning (IBP)?

View our collection of white papers regarding IBP, tailored to your industry.

About the author

O9 solutions.

o9 Solutions is a leading AI-powered platform for integrated business planning and decision-making for the enterprise. Whether it is driving demand, aligning demand and supply, or optimizing commercial initiatives, any planning process can be made faster and smarter with o9’s AI-powered digital solutions. o9 brings together technology innovations—such as graph-based enterprise modeling, big data analytics, advanced algorithms for scenario planning, collaborative portals, easy-to-use interfaces and cloud-based delivery—into one platform.

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By  Niels Van Hove , Supply Chain consultant, Mental Toughness coach and S&OP/IBP expert at  Truebridgese

As S&OP found its origin in the supply chain, IBP is often biased with supply chain terminology and reasoning. It can be argued that current IBP development is still driven by a supply chain bias. With this lack of diverse thinking, IBP innovation runs the risk of being not truly ‘integrated’.

Contrary to most current defined maturity phases of IBP, one can find on the internet, we also can define IBP maturity phases from a more strategic angle.

Many experts agree that IBP has a monthly check and balance with the budget and the strategic intentions of a business. Therefore, a well-executed IBP cycle will provide monthly visibility and measures progress against business objectives and strategy in the long-term horizon. Furthermore, we can say that a business strategy and the required strategic resources and capabilities have the goal to get a company closer to its vision.

According to Collins and Porras, a company vision exists from its core values, core purpose, a BHAG (big, hairy, audacious goal) and a vivid description.

• The core purpose is the reason for being; it captures the soul of the organization. Where you can fulfill a strategy, you can’t fulfill a purpose.
• Core values define what the company stands for. A company will stick to them, even if it became a competitive disadvantage in certain situations.

Well defined, integrated and truly lived, purpose and values will drive companywide behavior. Imbedded company behaviors will drive a sustainable company culture, which will last over time.

A well-defined achievable BHAG with a vivid description provides employees with an envisioned future they can identify with and which creates an emotional attachment, which makes them go the extra mile. As CEO Bob McDonald says on the emotional component and innovation at P&G; ‘People will innovate for financial gain or for competitive advantage, but this can be self-limiting, there is a need for an emotional component as well – a source of inspiration that motivates people‘.

If a company wants to track its budget and strategy and we use this vision framework and IBP as the planning process to support the business, IBP can be defined with the following maturity phases:

1. Integrated planning:

In this phase, companies start to focus on integrated planning between previously siloed functional areas. Some functions are more advanced than others. A company might have focused on the state of the art finance processes and systems, but doesn’t reap the full benefits of that due to lack of integration of other functional areas into the finance process. Some integration exists, but not across all functional area’s and there is not enough integration with finance to make a monthly financial prediction on EBIT level in the long term horizon. S&OP as most define it will be in this phase.

2. Dynamic budget planning:

In this phase, enough functional areas plan in an integrated way for the process to provide their input to the P&L to create a fully-loaded forward projected P&L. Finance understands the ‘volume’ input and the other functional areas understand the financial ‘value’ planning. This will provide the company visibility on how it is tracking versus the budget or annual operating plan on a monthly basis on EBIT level.

Why EBIT level? Because I heard too many times in a boardroom the argument, when only gross profit was on the table; ‘we can’t decide on this because we don’t have EBIT a number’ . We can also expect these companies to deliver monthly balance sheet and cash flow prediction. For these companies, there is no separate budgeting or forecasting cycle. Every month can be the budgeting cycle. Dynamic indicates that opportunity and risk scenarios across all functional areas are integrated into the financial projection.

3. Dynamic strategy and capability planning:

In this phase, the company has defined its strategic goals, measurements, and targets and is capable of checking and communicating monthly if they are on track to meet the strategy in the horizon beyond the budget. The strategic intent, which can be defined on lower levels like product segment, country or business unit level, will also guide in decision making for decisions on the budget horizon.

The company has also defined its core strategic capabilities to meet its strategy. There are many strategic capabilities possible.  Ideally, a company shouldn’t have more than a handful as if it will define more it will erode the focus on these capabilities. Some examples are:

• Risk management: for companies that have extended and complex networks that are sensitive and dependent on changes in global and geopolitical events. For example companies with global supply chains, but also the Finance industry.
• Innovation: for companies that in a highly competitive market can outpace their competitors based on innovation and new product development. Often seen in the technology industry and CPG
• Commodity trading: for companies that are highly influenced by commodity cycles as the commodities can be more than 80% of the COGS of their core products. For example, food & beverage companies that have crops and livestock as core raw material.
• Demand is driven supply chain: for companies that can get the competitive advantage from driving their business from the front end of the supply chain. For example food, beverage and consumer package industry. Often in retail and consumer environment, which are promotional driven and where POS information is available,
• Knowledge management: for companies that are highly dependent on knowledge workers and the exchange of knowledge between people and business units. Companies that have IP to integrate, sell and protect. For example Consultancies and software industry.
• Supply exploration: for companies that have to spend high amounts of capital to find new or increase the supply of their core product. For example the oil and mining industry.
• Collaboration:  Collaborative IBP can be a separate phase for companies that see the strategic advantage in collaborating with their suppliers and customer in the longer horizon and therefore want to integrate their business plans. For companies that have the power in the supply chain through size or uniqueness of offering this will most likely not be a strategic focus.

The list can go on and on with Technology, Sustainability etc. Once a company has defined its strategic capabilities and has defined goals, measurements and targets for these capabilities, it needs plans to implement or improve these strategic capabilities. An update on status, progress, risks and mitigations for those plans will be part of the IBP cycle in this phase. Dynamic indicates that sensitivity analysis around the plans to reach the goals of the strategic capability is part of the update.

4. Integrated vision & purpose:

In this phase, companies have a well-defined purpose, values and an achievable BHAG with a vivid description that people can identify with and which create an emotional attachment. The company aims to integrate this with the IBP cycle.  A company can decide not to pursue strategic opportunities because doing so would compromise their core purpose or values.

A large multi-billion dollar beverage company, for example, decided not to enter the very lucrative market of premium RTD’s (Ready to Drink) alcoholic beverages because the alcohol content was too high. Although the opportunity was achievable and margins were very interesting, the alcohol content would not be in line with their core purpose of ‘bringing more sociability and wellbeing to our world’ . The purpose guided decision making in the strategic horizon.

The company values and the emotional attachment will be tracked in the monthly IBP process and have actions, goals, and measurement. Executives follow progress to understand if employees believe and identify with the companies values, BHAG, and purpose and show emotional attachment. This can be done by 360 degrees feedback, engagement surveys or roundtable discussion between executives and employees. Executives also have to lead by example in behaviour and actions. Their own behaviour will have goals and measurements and progress is tracked,

For all phases, communication is important , although it can be argued that it’s most important when developing an emotional connection. An IBP document on the key decision, outcomes, progress and wins in the IBP cycle can be communicated to a well-defined stakeholder group in the company. This will both give the stakeholders an understanding of business performance, priorities, improvement opportunities and successes, as well as keep the engagement with the company vision, purpose, and the IBP process.

Executives have to realize and appreciate that this communication document is the results of all the hard work from middle and lower management to gather all required IBP information for the executives to make decisions in the IBP meeting. This communication makes sure the IBP meeting is not seen as a ‘black hole’ which only sucks up information and doesn’t provide feedback.

Once a company masters these four phases, it tracks and plans on a monthly basis the budget, the strategic intent and strategic capabilities, the company values, and purpose and the emotional attachment of the employees. If a company then links these plans with shorter-term control plans and execution, we might call it real Integrated Business Planning.

Would these four phases be IBP innovation?

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Integrated Business Planning: How to Pave Your Way to End-to-end Orchestration

What is integrated business planning, market uncertainties, holistic data analysis, customer centricity, short product life cycles, smaller margins, globalization, being ready for ‘what-if’ scenarios, collaborative and decentralized decision-making, enhanced customer experience, ibp vs s&op: different names for the same process, prioritize the p&l owner, decide on the apt design and cadence, apply consequential thinking to facilitate decision making, support ibp with appropriate technology, a framework for ibp success.

“We plan, God laughs”. True. However, planning is not about knowing the exact outcome. It’s more about gearing up for what-if scenarios, in case something goes awry. 

To adapt successfully to evolving market needs and work around economic turbulence businesses need the collective effort of the whole organization — from finance to marketing.

But how can you align the mashup of a company’s strategy, operations, and financial performance? Enter an integrated business planning process.

Once a legacy of Fortune-500 companies, the IBP strategy can be leveraged to transform businesses of all sizes. IBP solutions help both industry giants and young companies manage growth-related risks and help establish disruption-tolerant processes.

An integrated business planning (IBP) process refers to scaling and connecting the planning activities across each business function, silo, and department. Hailed as the enabler of an innovation-ready environment , IBP also syncs business targets, budgets, operations, and business units across the entire organization. At its core, IBP includes technology and applications that connect the planning and operational functions of the company.

Why put your planning processes in a broader perspective?

According to McKinsey , businesses that have fully integrated business management are in the minority, with only a handful of companies implementing IBP to its fullest. Two-thirds of companies confine unified strategic planning to occasional business reviews.

This means that most companies leave their business decisions to the mercy of siloed planning solutions with limited process visibility and one-sided insights. Conversely, integrated business planning solutions cast their nets wide to deliver value across the entire business and help battle ever-growing business challenges.

In a world of interconnected economies, each company can be affected by the overall market resonance. This is why the pandemic’s disruptions to logistics in China have echoed through global supply chain operations, resulting in a shortage of components. International political uncertainties can reduce the trade openness of a given country, destabilizing the whole world. It means that the success path of a single company depends on a whole lot of political and economic levers involved in internal management.

At least 2.5 quintillion bytes of data are produced every day. However, instead of generating actionable insights, around 95% of companies are unable to make sense of unstructured data — a fundamental building block of business decision-making. The growing amount of big data and its complexity also prevents companies from landing new growth opportunities.

Focus on a customer is a beacon for successful companies and higher profits with over 70% of consumers considering it a basic expectation. However, isolated planning doesn’t factor in all touchpoints. Unable to create a unified customer image, companies struggle to deliver personalized services and initiatives.

Along with granular offerings, customers expect new products to be released faster in regular cycles. However, rolling out new products like a conveyor belt is not enough. To keep up with quickly-changing customer preferences, companies require robust analytical capabilities that consider an entire landscape of opportunities and predict current demand areas.

The world? Volatile, to say the least. Over the last few years, shrinking margins have made a comeback driven by cutthroat competition, market saturation, and inflated costs. Since 2020, margins have been falling down the curve with a negative of at least 0.04% .

As a result, the traditional supply and demand balancing has been rendered ineffective, jolting companies into optimization based on a patchwork of metrics, market trends, and forecasts.

Despite ample opportunities, border-free supply chains have exposed businesses to the ripple effect of global bottlenecks and equipment availability. Differences in standards and regulations, harder planning, and budget constraints require unmatched agility from companies.

To pivot and flex, an organization requires an integrated business planning process flow that eliminates communication lags and steers the whole organization towards its goals despite global instability.

Unmatched benefits of integrated business planning

According to KPMG , integrated business planning best practices stand to increase ROE up to 14 points, reduce costs by up to 10%, and ramp up revenue by 4%. But besides core metrics, what is the true value of IBP solutions?

‘How would the pandemic affect my company? Can I slash the costs to battle the recession?’ Within traditional business management, the answer to your questions is left to guesswork and historical analysis at best.

Paired with robust data analysis , integrated business planning software enables you to simulate the effects of potential actions and changes across the whole organization — from capital expenditures to workforce availability.

You can also mold your growth objective into different market opportunities based on the resources owned or quickly re-allocate the current assets for any transformation with no ad hoc firefighting.

With data sourced across all operations, the decision-making authority is distributed throughout a cross-functional team. Enterprise-wide activation of purpose promotes greater accountability and decision ownership where business units work collaboratively towards a general business goal.

At the same time, consolidated enterprise planning applications eliminate version control and spreadsheet complexity.

It is stated that agility improves customer experience by up to 30 points . A shared purpose and vision embodied across the organization are some of the qualities required to have agility. Besides enterprise adaptability, a bird’s-eye view and corporate alignment deliver a more unified customer image sourced from across the organization. As a result, customers are served more granular messages, desired products with on-time delivery, and customer-centered services.

Make your business future-proof

The difference between S&OP and IBP is challenging to spot as integrated business planning is generally considered an exercise of sales and operations planning. However, an integrated business planning framework makes evidence-based thinking more comprehensive, while S&OP prioritizes supply chain planning as the main benchmark.

Moreover, integrated business planning consultants devise a proactive plan that responds to challenges with the most benefits and least losses, while S&OP is more about satisfying customer needs at all costs.

Below, you’ll find the main differences between IBP and S&OP:

How to create real value? Four pillars of fully integrated business management 

According to McKinsey , ineffective consolidated strategic planning is the collective result of three factors. First, if an organization doesn’t include IBP in its regular decision-making process, the added value of unified orchestration tapers off. Secondly, some companies delegate unified planning to junior staff, who, naturally, often lack vision and authority for the function. Lastly, if the executors do not have a single vision of critical decision enablers, they won’t be able to navigate business thinking as a whole.

Yet, despite common reasons, there is no ultimate integrated business planning template that caters to all businesses with unique needs. However, some practices can bring your organization closer to the desired outcome of SAP integrated business planning.

In most cases, the owners of P&L at your company have a great read of the existing drivers of revenue and spending. Unlike the supply chain or production management, a P&L-focused integrated process has the most practical requirements based on a broad outlook.

When designing your planning regimen, make sure the groundwork also includes input from upper management so that decisions can be made regularly. This way, the footprint of decisions can be checked against financial thresholds.

At the same time, this business plan allows the P&L owner to align the trade-offs between perils and prospects with the affected area, be it local or global. To unlock this level of visibility, companies should employ robust data governance practices and tools which enable real-time data processing.

To make the most of unified strategizing, companies need to design an IBP flow with a focus on better visibility and critical data sourcing. The main objective of this fit-for-purpose IBP design is to equip the P&L owner with the right output that is clean, standardized, analysis-ready, and can be easily injected into templates. However, even industry-best design practices can fail if the initial input isn’t sifted through an established data infrastructure and effective processing systems.

Adopting the right reviewing rhythm is another salient part of a holistic IBP framework. Analysis-intensive initiatives, such as product releases, should be subject to regular reviews, while urgent issues such as material shortages or insufficient space should be resolved within a weekly agenda.

To facilitate regular feedback loops, companies also need to establish the right technology infrastructure that promotes seamless and real-time communication between business units.

The right integrated business planning example also stimulates an organizational shift within the company. Therefore, when adopting integrated planning, companies should factor in decision-making power, the value of the decision-making variable, and reporting hierarchy as well as giving key stakeholders more authority in the process.

In practice, collaborative and autonomous thinking can be supported with event classification and pre-defined troubleshooting guidelines based on the root cause approach. Also, the autonomous structure should dwell on the scope of operational thinking as well as the escalation mechanism to bring decisions to the appropriate level of responsibility for adequate resolution.

The right technology infrastructure allows each business function to keep its language and still collaborate effectively with each other. Since the operational data becomes paramount in this case, the technology suites have to be easy-to-use interfaces that demonstrate digestible, real-time insights — all within one platform.

From a technology standpoint, the building blocks of an IBP-friendly ecosystem include but are not limited to:

• Real-time data and visual management

Plotting the business course is impossible without seamless and real-time data flows. To enable collaborative thinking, your tech ecosystem should also support easy integrations among the modules and enable modeling of the supply chain in real time.

• Big data, analytics, and KPI control

KPIs dashboards allow your departments to monitor the performance, report the number of open opportunities, and share insights for other business units. Robust analytics, in turn, allows your dedicated team to drill down into specific metrics and initiate corrective actions for those metrics. Predictive analytics also accelerates your planning by improving assessments of your capacity, generates dynamic forecasts as well as supports scenario planning and optimization.

• Cloud technologies

By moving applications into the cloud , companies can more easily integrate them at a process level. Following a single data model, integrated business planning managers can cover all aspects of planning and arrive at the ‘single number’. Cloud technologies also enable better business continuity and drive down the costs of analytics.

• Machine learning and artificial intelligence

Injected with expert systems, planning systems offer advanced optimization techniques. The latter, in turn, automatically generates replenishment strategies, inventory optimization, and other response measures needed to embrace the volatility of the market. AI-based stress test simulations also help organizations model the scenarios of combined workloads.

A synergy of strategy and execution is what prevents companies from veering off the rails in chaotic times. This synergy is manifested in integrated planning and allows you to create a link between all business operations, uniting them into a cohesive whole driven by the same goal. Unlike traditional S&OP-enabled planning, IBP allows you to go beyond capacity levels and gain a broader foresight of possible business scenarios.

To achieve IBP excellence, you need to look beyond the internal processes and enable visibility into all pivots, from supply chain leaders to customers. Combined with agility, high visibility levels promote business resilience and maximized profits without low-risk exposure.

Data is also the pinnacle of this visibility, making a technology infrastructure critical to IBP success. That’s why the choice of the right technology partner can advance your planning and fine-tune the planning pathways to your unique business needs, making it a critical step in ensuring success.

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Business analytics refers to the statistical methods and computing technologies for processing, mining and visualizing data to uncover patterns, relationships and insights that enable better business decision-making.

Business analytics involves companies that use data created by their operations or publicly available data to solve business problems, monitor their business fundamentals, identify new growth opportunities, and better serve their customers.

Business analytics uses data exploration, data visualization, integrated dashboards, and more to provide users with access to actionable data and business insights.

This IBM ebook uncovers the value of integrating a business analytics solution that turns insights into action.

Read the guide for data leaders

Business intelligence (BI) enables better business decisions that are based on a foundation of business data. Business analytics (BA) is a subset of business intelligence, with business analytics providing the analysis, while the umbrella business intelligence infrastructure includes the tools for the identification and storage of the data that will be used for decision-making. Business intelligence collects, manages and uses both the raw input data and also the resulting knowledge and actionable insights generated by business analytics. The ongoing purpose of business analytics is to develop new knowledge and insights to increase a company’s total business intelligence.

Business analytics can be used to answer questions about what happened in the past, make predictions and forecast business results. 1 An organization can gain a more complete picture of its business, enabling it to understand user behavior more effectively.

Data scientists and advanced data analysts use business analytics to provide advanced statistical analysis. Some examples of statistical analysis include regression analysis which uses previous sales data to estimate customer lifetime value, and cluster analysis for analyzing and segmenting high-usage and low-usage users in a particular area.

Business analytics solutions provide benefits for all departments, including finance , human resources , supply chain , marketing , sales  or information technology , plus all industries, including healthcare , financial services and consumer goods .

Business analytics uses analytics—the action of deriving insights from data—to drive increases in business performance. 4 types of valuable analytics are often used:

As the name implies, this type of analytics describes the data it contains. An example would be a pie chart that breaks down the demographics of a company’s customers.

Diagnostic analytics helps pinpoint the root cause of an event. It can help answer questions such as: What are the series of events that influenced the business outcomes?  Where do the true correlation and causality lie within a given historical time frame? What are the drivers behind the findings? For example, manufacturers can analyze a failed component on an assembly line and determine the reason behind its failure.

Predictive analytics mines existing data, identifies patterns and helps companies predict what might happen in the future based on that data. It uses predictive models that make hypotheses about future behaviors or outcomes. For example, an organization could make predictions about the change in coat sales if the upcoming winter season is projected to have warmer temperatures. Predictive modeling 2 also helps organizations avoid issues before they occur, such as knowing when a vehicle or tool will break and intervening before it occurs, or knowing when changing demographics or psychographics will positively or negatively impact their product lines. 

These analytics help organizations make decisions about the future based on existing information and resources. Every business can use prescriptive analytics by reviewing their existing data to make a guess about what will happen next. For example, marketing and sales organizations can analyze the lead success rates of recent content to determine what types of content they should prioritize in the future. Financial services firms use it for fraud detection by analyzing existing data to make real-time decisions on whether any purchase is potentially fraudulent.

Business analytics practices involve several tools that help companies make sense of the data they are collecting and use it to turn that data into insights. Here are some of the most common tools, disciplines and approaches:

• Data management: Data management is the practice of ingesting, processing, securing and storing an organization’s data. It is then used for strategic decision-making to improve business outcomes. The data management discipline has become an increasing priority as expanding data stores has created significant challenges, such as data silos, security risks and general bottlenecks to decision-making.
• Data mining or KDD : Data mining, also known as knowledge discovery in data (KDD), is the process of uncovering patterns and other valuable information from large data sets and is a significant component of big data analytics. The growing importance of big data makes data mining a critical component of any modern business by assisting companies in transforming their raw data into useful knowledge.
• Data warehousing : A data warehouse, or enterprise data warehouse (EDW), is a system that aggregates data from different sources, including apps, Internet of Things (IoT) devices, social media and spreadsheets into a single, central, consistent data store to support data analysis, data mining, artificial intelligence (AI) and machine learning (ML). A data warehouse system enables an organization to run powerful analytics on large amounts of data (petabytes and petabytes) in ways that a standard database cannot.
• Data visualization : The representation of data by using graphics such as charts, plots, infographics and even animations. These visual displays of information communicate complex data relationships and data-driven insights in a way that is easier to understand, being especially helpful for nontechnical staff to understand analytics concepts, and helping show patterns in multiple data points. Data visualization can also help with idea generation, idea illustration or visual discovery.
• Forecasting : This tool takes historical data and current market conditions and then makes predictions as to how much revenue an organization can expect to bring in over the next few months or years. Forecasts are adjusted as new information becomes available. When companies embrace data and analytics with well-established planning and forecasting best practices, they enhance strategic decision-making and can be rewarded with more accurate plans and more timely forecasts.
• Machine learning algorithms : A machine learning algorithm is a set of rules or processes used by an AI system to conduct tasks, most often to discover new data insights and patterns, or to predict output values from a given set of input variables. Machine learning algorithms enable machine learning to learn, delivering the power to analyze data, identify trends and predict issues before they occur.
• Reporting : Business analytics runs on the fuel of data to help organizations make informed decisions. Enterprise-grade reporting software can extract information from various applications used by an enterprise, analyze the data and generate reports.
• Statistical analysis : Statistical analysis enables an organization to extract actionable insights from its data. Advanced statistical analysis procedures help ensure high accuracy and quality decision-making. The analytics lifecycle includes data preparation and management to analysis and reporting.
• Text analysis : Identifies textual patterns and trends within unstructured data by using machine learning, statistics and linguistics. By transforming the data into a more structured format through text mining and text analysis , more quantitative insights can be found.

Modern organizations need to be able to make quick decisions to compete in a rapidly changing world, where new competitors spring up frequently and customers’ habits are always changing. Organizations that prioritize business analytics have several advantages over competitors who do not.

Faster and better-informed decisions: Having a flexible and expansive view of all the data an organization possesses can eliminate uncertainty, prompt an organization to take action faster, and improve business processes. If an organization’s data suggests that sales of a particular product line are declining precipitously, it might decide to discontinue that line. If climate risk impacts the harvesting of a raw material another organization depends on, it might need to source a new material from somewhere else. It’s especially helpful when considering pricing strategies.

How a company prices its goods or services is based on thousands of data points, many of which do not remain static over time. Whether a company has a fixed or dynamic pricing strategy, being able to access real-time data to make smarter short- and long-term pricing data is critical. For organizations that want to incorporate dynamic pricing, business analytics enables them to use thousands of data points to react to external events and trends to identify the most profitable price point as frequently as necessary.

Single-window view of information: Increased collaboration between departments and line-of-business users means that everyone has the same data and is talking from the same playbook. Having that single pane of glass shows more unseen patterns, enabling different departments to understand the company’s holistic approach and increase an organization’s ability to respond to changes in the marketplace.

Enhanced customer service: By knowing what customers want, when and how they want it, organizations encourage happier customers and build greater loyalty. In addition to an improved customer experience , by being able to make smarter decisions on resource allocation or manufacturing, organizations are likely able to offer those goods or services at a more affordable price.

Companies looking to harness business data will likely need to upskill existing employees or hire new employees, potentially creating new job descriptions. Data-driven organizations need employees with excellent hands-on analytical and communication skills.

Here are some of the employees that they need to take advantage of the full potential of robust business analytics strategies:

Data scientists: These people are responsible for managing the algorithms and models that power the business analytics programs. Organizational data scientists  either use open source libraries, such as the natural language toolkit (NTLK) for algorithms or build their own to analyze data. They excel at problem-solving and usually need to know several programming languages, such as Python, which helps access out-of-the-box machine learning algorithms and structured query language (SQL) , which helps extract data from databases to feed into a model.

In recent years, an increasing number of schools offer Master of Science or Bachelor’s degrees in data science where students engage in degree program coursework that teaches them computer science, statistical modeling and other mathematical applications.

Data engineers: They create and maintain information systems that collect data from different places that are cleaned and sorted, and placed into a master database. They are often responsible for helping to ensure that data can be easily collected and accessed by stakeholders to provide organizations with a unified view of their data operations.

Data analysts: They play a pivotal role in communicating insights to external and internal stakeholders. Depending on the size of the organization, they might collect and analyze the data sets and build the data visualizations, or they might take the work created by other data scientists and focus on building strong storytelling for the key takeaways.

To maximize the benefits of an organization’s business analytics, it needs to clean and connect its data, create data visualizations and provide insights on where the business is today while helping predict what will happen tomorrow. This usually involves these steps:

First, organizations must identify all the data they have on hand and what external data they want to incorporate to understand what opportunities for business analytics they have.

Unfortunately, much of a company's data remains uncleaned, rendering it useless for accurate analysis until addressed.

Here are some reasons why an organization’s data might need cleaning:

• Incorrect data fields: Due to manual entry or incorrect data transfers, an organization might have bad data mixed in with accurate data. If it has any bad data in the system, this has the potential to render the entire set meaningless.
• Outdated data values: Certain data sets, including customer information, might need editing due to customers leaving, product lines being discontinued or other historical data that is no longer relevant.
• Missing data: Companies might have changed how they collect data or the data they collect, which means historic entries might be missing data that is crucial to future business analysis. Companies in this situation might need to invest in either manual data entry or identify ways to use algorithms  or machine learning  to predict what the correct data should be.
• Data silos: If an organization’s existing data is in multiple spreadsheets or other types of databases, it might need to merge the data so it’s all in one place. While the foundation of any business analytics approach is first-party data (data the company has collected from stakeholders and owns), they might want to append third-party data (data they’ve purchased or gleaned from other organizations) to match their data with external insights.

Companies can now query and quickly parse gigabytes or terabytes of data rapidly with more cloud computing . Data scientists can analyze data more effectively by using machine learning, algorithms, artificial intelligence (AI ) and other technologies. Doing so can produce actionable insights based on an organization’s key performance indicators (KPIs) .

Business analytics programs can now quickly take huge amounts of that analyzed data to create dashboards, visualizations and panels where the data can be stored, viewed, sorted, manipulated and sent to stakeholders.

Data visualization best practices include understanding which visual best fits the data an organization is using and the key points it hopes to make, keeping the visual as clean and simple as possible, and providing the right explanations and content to help ensure that the audience understands what they’re viewing.

Ongoing data management is conducted in tandem with what was mentioned earlier. An organization that embraces business analytics must create a comprehensive strategy for maintaining its cleaned data, especially as it incorporates new data sources.

Business analytics are useful for every type of business unit as a way to make sense of the data it has and help it generate specific insights that drive smarter decision-making.

• Financial and operational planning: Business analytics provides valuable insights to help organizations align their financial planning and operations more seamlessly. It does this by setting rules for supply chain management , integrating data across functions, and improving supply chain analytics and demand forecasting.
• Planning analytics: An integrated business planning approach that combines spreadsheets and database technologies to make effective business decisions about topics such as demand and lead generation, optimization of operating costs, and technology requirements based on solid metrics. Many organizations have historically used tools including Microsoft Excel for business planning, but some are transitioning to tools such as IBM Planning Analytics .
• Integrated sales and marketing planning: Most organizations have historical data about their lead generation, sales conversions and customer retention success rates. Organizations looking to create more accurate revenue plans and forecasts and gain deeper visibility into their marketing and sales data are using business analytics to allocate resources based on performance or changing demand to meet business objectives.
• Integrated workforce performance planning: As organizations undergo digital transformation and otherwise react to changing landscapes, they might need to ensure they have the right workforce with the right analytical skills. This is especially true in a world where employees are more likely to leave a company for a new job. Workforce performance planning helps organizations understand their workforce requirements, identify and address skill gaps, and better recruit and retain talent to meet the organization's needs today and in the future.

The flexibility of spreadsheets. Control of a database. The power of integrated business planning. Now available as a Service on AWS.

AI-powered automation and insights in Cognos Analytics enable everyone in your organization to unlock the full potential of your data. 

Detects application and business risks affecting the customer experience, enabling users to correlate application service level objectives with underlying infrastructure resourcing.

Learn more about business analytics by reading these blogs and articles. 

IBM Planning Analytics has helped support organizations across not only the office of finance but all departments in their organization.

A growing number of forward-looking companies are successfully navigating complexities using IBM Planning Analytics, a technology capable of supporting secure collaboration, fast automated data acquisition, and more.

Predictive analytics is a branch of advanced analytics that makes predictions about future outcomes using historical data combined with statistical modeling, data mining techniques and machine learning.

Scale AI workloads for all your data, anywhere, with IBM watsonx.data, a fit-for-purpose data store built on an open data lakehouse architecture.

1 Business intelligence versus business analytics  (link resides outside ibm.com), Harvard Business School. 2  How predictive analytics can boost product development  (link resides outside ibm.com), McKinsey, August 16, 2018.

300+ Business Plan Examples

With over two decades of experience, Growthink has assisted more than 1 million companies in developing effective business plans to launch and expand their businesses. Trust in our expertise to guide you through developing a business plan that drives your success. In addition to our sample plans, below you’ll learn the answers to key business plan questions and gain insightful tips on writing your business plan.

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1. Why is utilizing an example business plan a good idea?

Sample business plans can help you quickly and easily write a business plan for your own business. Business plans are an important tool for any business, but they can be challenging to create. A sample business plan will help you understand the business plan format , the benefit of market research, and how to write a compelling executive summary. It can also serve as a guide for creating your own business plan, outlining the key sections and providing examples of successful plans. Utilizing the best business plan template can save you time and ensure that your plan is well-structured and comprehensive.

Business plan examples may even help you with the different sections of a plan, including market analysis, business description, cash flow statements/business financial statements, and more. Business plans can also show you how a quality plan in your exact business plan category is organized and shows you the appropriate business communications style to use when writing your business plan.

2. Who would benefit from using an example business plan?

Any entrepreneur or business owner who has never written a business plan before can benefit from an example or sample plan. New business owners often start with business plan templates , which are helpful but are sometimes more useful after reviewing other sample business plans.

A good sample plan can be a step-by-step guide as you work on your business planning and business idea. Once you have a sense for the flow, specs, and details, etc. that business plans have, utilizing a business plan template will help you pull everything together, helping you create a plan investors and other stakeholders will value. A solid business plan will also help you if you need a bank loan, which may require a startup business plan. Download our free business plan template to help you get started on your own business plan.

Free Download : Free Business Plan Template PDF

3. How do you get started with a sample business plan and maximize its benefit?

First you should read the business plan thoroughly. Study both the type of information provided in key sections like the executive summary, target market analysis, summary, etc., as well as the format and style of the plan. As you read, you may find yourself thinking through things such as improving or evaluating your business planning process, your business idea, or reconsidering who you want to write your business plan for. This is OK and part of the process. In fact, when you start writing a business plan for the first time, it will be much easier because you’ve gone through this process.

After this initial read, outline your business plan and copy in from the sample plan sections that apply to your business. For instance, if the sample plan included public relations in their marketing strategy and sales plan, and you will also use this tactic, you can copy it into your plan and edit it as appropriate. Finally, answer the other questions answered in the sample plan in ways that reflect your unique business and target customers.

Writing a business plan can seem daunting. Starting your business plan writing process by reviewing a plan that’s already been created can remove a lot of mental and emotional barriers while helping you craft the best plan you can.

4. When should you not use a sample business plan?

If your business is unlike any other, using a sample business plan will not be as effective. In this situation, writing a business plan from scratch utilizing a business plan template is probably your best path forward.

As an example, Facebook’s early business plan was unlike others since it was paving a new path and way of doing business. But, groundbreaking new businesses like Facebook are not the norm, and the vast majority of companies will benefit from utilizing sample business plans.

5. How do you choose the right type of business plan for your venture?

Selecting the appropriate type of business plan depends on your business’s stage, needs, and goals. Let’s explore the different types of business plans and how to determine which business plan format is right for you.

• Startup Business Plan : This type of plan is for businesses just starting out and seeking funding or investment. It typically includes a detailed analysis of the market, target audience, competition, and financial projections.
• Traditional Business Plan : Traditional business plans are the most common type of business plan, used by established businesses to outline their goals and strategies. It includes all the key sections such as market analysis, company description, and financial statements.
• Internal Business Plan : Internal business plans are used for internal purposes, to guide the day-to-day operations and decision making of the business. It may not be as detailed as a traditional business plan, but still includes important information such as company mission, objectives, and key performance indicators.
• Feasibility Business Plan : A feasibility business plan is used to assess the viability of a new product or service in the market. It includes detailed research and analysis to determine if the business idea is feasible and profitable.
• One-Page Business Plan : As the name suggests, this type of business plan is condensed into one page and includes the most critical information about the business. It can be a useful tool for pitching to potential investors or partners.
• Strategic Business Plan : A strategic plan looks at the big picture and long-term business goals of a company. It may include the company’s mission statement, core values, and overarching strategies for achieving success.

Ultimately, the type of business plan you choose will depend on your business’s specific needs and goals. It may also be beneficial to combine elements from different types of plans to create a customized plan that best fits your business. Carefully consider your objectives and resources before deciding on the right type of plan for your venture.

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The business plan example below is for Shoutmouth, a company that enjoyed much success in the early 2000’s and which was able to raise funding. While the plan’s premise (social networking) is not as unique now as it was then, the format and structure of this business plan still holds.

I. Executive Summary

Business Overview

Launched in late February 2007, Shoutmouth.com is the most comprehensive music news website on the Internet .

Music is one of the most searched and accessed interests on the Internet. Top music artists like Akon receive over 3 million searches each month. In addition, over 500 music artists each receive over 25,000 searches a month.

However, music fans are largely unsatisfied when it comes to the news and information they seek on the artists they love. This is because most music websites (e.g., RollingStone.com, MTV.com, Billboard.com, etc.) cover only the top eight to ten music stories each day – the stories with mass appeal. This type of generic coverage does not satisfy the needs of serious music fans. Music fans generally listen to many different artists and genres of music. By publishing over 100 music stories each day, Shoutmouth enables these fans to read news on all their favorite artists.

In addition to publishing comprehensive music news on over 1200 music artists, Shoutmouth is a social network that allows fans to meet and communicate with other fans about music, and allows them to:

• Create personal profiles
• Interact with other members
• Provide comments on news stories and music videos
• Submit news stories and videos
• Recommend new music artists to add to the community
• Receive customized news and email alerts on their favorite artists

Success Factors

Shoutmouth is uniquely qualified to succeed due to the following reasons:

• Entrepreneurial track record : Shoutmouth’s CEO and team have helped launch numerous successful ventures.
• Affiliate marketing track record : Online affiliate marketing expertise has been cited as one of MySpace’s key success factors. Over the past two years, Shoutmouth’s founders have run one of the most successful online affiliate marketing programs, having sold products to over 500,000 music customers online.
• Key milestones completed : Shoutmouth’s founders have invested $500,000 to-date to staff the company (we currently have an 11-person full-time team), build the core technology, and launch the site. We have succeeded in gaining initial customer traction with 50,000 unique visitors in March, 100,000 unique visitors in April, and 200,000 unique visitors in May 2007.

Unique Investment Metrics

The Shoutmouth investment opportunity is very exciting due to the metrics of the business.

To begin, over the past two years, over twenty social networks have been acquired. The value in these networks is their relationships with large numbers of customers, which allow acquirers to effectively sell to this audience.

The sales price of these social networks has ranged from $25 to $137 per member. Shoutmouth has the ability to enroll members at less than $1 each, thus providing an extraordinary return on marketing expenditures. In fact, during an April 2007 test, we were able to sign-up 2,000 members to artist-specific Shoutmouth newsletters at a cost of only 43 cents per member.

While we are building Shoutmouth to last, potential acquirers include many types of companies that seek relationships with music fans such as music media/publishing (e.g., MTV, Rolling Stone), ticketing (e.g., Ticketmaster, LiveNation) and digital music sales firms (e.g., iTunes, The Orchard).

Financial Strategy, Needs and Exit Strategy

While Shoutmouth’s technological, marketing and operational infrastructure has been developed, we currently require $3 million to execute on our marketing and technology plan over the next 24 months until we hit profitability.

Shoutmouth will primarily generate revenues from selling advertising space. As technologies evolve that allow us to seamlessly integrate music sampling and purchasing on our site, sales of downloadable music are also expected to become a significant revenue source. To a lesser extent, we may sell other music-related items such as ringtones, concert tickets, and apparel.

Topline projections over the next three years are as follows:

II. Shoutmouth Overview

What is Shoutmouth?

Shoutmouth is an operating company of The Kisco Group Inc. (TKG). Since 2003, TKG has capitalized on web-based marketing opportunities via launching targeted websites and generating web-based leads. TKG revenues in 2005 exceeded $1.3 million and grew to $3.5 million in 2006. Shoutmouth is currently the sole focus of TKG; all other TKG business units have been divested.

Development of Shoutmouth began in August 2006 and the site officially launched on February 21, 2007. Shoutmouth (located at www.shoutmouth.com) is the most comprehensive music news community on the Internet. The website covers 1,200 popular bands and music artists and offers more than 100 new music articles each day. In addition to providing news, Shoutmouth is a web community. That is, Shoutmouth members can actively participate on the site, by doing things such as commenting on news stories and submitting their own stories.

The Market Size and Need for Shoutmouth

The music market is clearly vast. According to IFPI, which represents the recording industry worldwide, global music sales were $33.5 billion in 2005, with the U.S. accounting for $12.3 billion of that amount. Importantly, digitally music sales are seeing substantial growth, with IFPI reporting sales of $400 million in 2004, $1.1 billion in 2005 and $2 billion in 2006.

Online, music is the one of the most frequently searched and accessed interests. For example, according to Wordtracker, the music artist Eminem received over 1.7 million web searches in December 2006, while band Green Day received 534,000 searches.

To put these figures in perspective, top celebrities in other entertainment fields receive but a fraction of this search volume. For example, December 2006 search volumes for select sports stars and actors were as follows: Kobe Bryant, 122K; Tiger Woods, 88K; Cameron Diaz, 332K; and Tom Cruise, 82K.

Conversely, 225 music artists received over 100,000 searches in December 2006, and over 500 music artists received over 25,000 searches.

This data is corroborated by Nielsen BuzzMetrics which plots the most popular topics bloggers are posting about. The chart to the right plots September 25, 2006 to March 25, 2007 and shows how music dominates other entertainment sectors online.

When searching for music artists online, fans, which are primarily between the ages of 13 and 35, are looking for news, pictures, lyrics, videos and audio files. In addition, fans enjoy publicly voicing their opinions about music and interacting with other fans.

There is currently no website besides Shoutmouth that provides comprehensive music news. Currently, to get the latest news on their favorite artists, fans must visit the official websites or fan websites of each of the artists they like . Even then, it is unlikely that the fan will get all the news that has occurred. To solve this problem, Shoutmouth scours the web and uncovers news from thousands of web sites.

What Shoutmouth Does and Will Offer

As of May 2007, the site covers the 1,200 most popular music artists (popularity primarily based on the number of web searches over the past 12 months for each artist).

Shoutmouth currently offers members the ability to:

• Read over 500 new music articles each week
• Read special features such as album reviews, interviews, new album release dates, top quotes of the week and other special reports
• Watch and rate music videos
• Listen to select music audio clips
• Comment on news stories and music videos
• Submit news stories that they see/hear of elsewhere
• Suggest new music artists to add to the site
• View articles by music artist or by genre (current genres include Rock, Pop, Rap, R&B, Country, and Electronic)
• Create a user profile that includes their favorite music artists, Shoutmouth friends, news stories submitted to Shoutmouth, and comments made. Members have the ability to find other members based on their favorite artists and via our search functions.
• Receive customized news and email alerts. Members can customize their “My News” page to include only artists they specify. Likewise, they can choose to receive email alerts whenever there is a new story on one of their favorite artists.

While establishing itself as the premier music news community, Shoutmouth will embark on the more aggressive goal of becoming the premier music community online . To accomplish this, Shoutmouth will begin to offer additional content (more videos, audio, pictures, lyrics, etc.) and additional functionality (music compatibility testing (e.g., if you like this, you’ll like this), voting capabilities, member-to-member messaging, etc.). We have already begun mapping out our content and technology growths plans to achieve this goal upon financing.

Importantly, Shoutmouth expects to be able to add massive amounts of relevant content (e.g., lyrics, reviews, pictures, video files, audio files, etc.) via member submissions and moderation. This is the same way that YouTube has been able to quickly add millions of videos and Wikipedia has been able to add millions of articles. Importantly, since established music websites (e.g., MTV, RollingStone.com, Billboard.com, etc.) are not community based, they would have to hire thousands of staff members to rival the content that Shoutmouth will have.

How We Get and Publish Our News

Currently, news stories that appear on Shoutmouth are gathered from numerous online sources. Shoutmouth’s staff writers find these stories by using RSS and News feeds that cover thousands of websites. In addition, Shoutmouth community members have the ability to submit stories they find elsewhere.

Typical stories include factual information plus the insight of the author. Shoutmouth editors ensure that all stories are properly classified by artist and genre, and that duplicate articles are filtered out.

Over the past three months, Shoutmouth has developed a solid infrastructure, which we consider a core competitive advantage, that that allows us to provide comprehensive music news . This infrastructure includes:

• Setting up hundreds of RSS feeds based on comprehensive research regarding sites from which to receive feeds
• Training our editorial team regarding identifying a story and weeding out duplicates
• Assigning music artists among our five-person editorial team to better manage work flow and avoid duplicate articles

We are working on a system to ensure that member-submitted articles are automatically routed to the appropriate member of Shoutmouth’s editorial team to improve our efficiencies further.

Shoutmouth’s Goal to Break News First

The majority (approximately 90%) of Shoutmouth’s articles are currently developed by our in-house editorial team, while the balance is submitted by members. In addition, virtually all of our articles are based on information gleaned from other websites. As such, we are generally not the first to publish news; however we are the first and only site to publish all the news in one easily-accessible place. The one current exception is news which is published on bands’ official MySpace pages; Shoutmouth generally publishes articles on this news 24 to 48 hours before it is reported by other news or music sites (due to our efficiencies in finding news).

Shoutmouth realizes that it will gain a key competitive advantage, and will generate significant market buzz, if it is able to report on music news stories before other media sources . To accomplish this, we have begun contacting publicity departments at record labels to gain direct access to music news. We expect these contacts to enable us to gain immediate and sometimes exclusive access to news which will help further establish Shoutmouth as the canonical source for music news. We also plan to more aggressively solicit member submissions of new, buzzworthy news events and will consider offering rewards for unique substantiated news (much the way paparazzi are compensated).

III. Competition in the Online Music Market

This section of the business plan provides a competitive analysis, which is an overview of the competitive landscape, discusses both indirect and direct competitors and then details Shoutmouth’s competitive advantages.

Because consumer demand for music on the Internet is so great, there are a vast number of music websites. In summary, we consider most sectors of the online music market (which are discussed below) to be indirect competitors and potentially partners, rather than direct competitors, because none of them focus on music news.

The reason we believe that no one focuses on music news is that it is very difficult to do. Because news is very important to music fans, most music websites offer news. However, they primarily get their news from organizations such as CNN, Reuters, the Associated Press and BBC. These large organizations only write about the music stories that have mass appeal, which traditionally amounts to 8-10 music news stories per day. However, since music fans are often zealots when it comes to their favorite artists, they are not merely interested in cover stories. For instance, a U2 fan cares about any U2 news, particularly news that a non-U2 fan might consider insignificant.

In fact, because Shoutmouth is the sole one-stop shop for getting comprehensive music news, there might be an opportunity to license our content to other music websites.

Sectors of the Online Music Market

Shoutmouth specifically comPs in the community-based music news market. While players in this market represent direct competitors, Shoutmouth faces indirect competitors in the following markets:

• Community-Based Sites
• Community-Based News Sites
• Community-Based Music Sites
• Traditional Music Websites
• Official Artist and Fan Sites

Each of these markets is described below.

A. Community-Based Sites

Community-based sites, also known as social networking sites, are websites in which members can create profiles, leave comments throughout the site, and communicate with other members among other features.

A June 2006 report by Piper Jaffray entitled “Silk Road: Social Networking is Here to Stay” effectively sums up the power and longevity of social networking:

“We believe social networking sites have become a permanent part of the fabric of web applications and are rapidly becoming one of the most popular activities online, potentially impacting how other popular services such as email, IM, and maybe even search are accessed.

As a clear indication of the growth rate and scale of social networking, consider this: MySpace monthly page views have now surpassed MSN or AOL in the U.S. and are nearly 75% of the size of Yahoo!. Social networking has filled a gap that was left by all the existing portals and web services and it is fulfilling a very important and basic function for millions of users: allowing them to express themselves and connect with their friends, with the two functions tightly integrated.

The leading sites such as MySpace (News Corp), Facebook, and others are amassing significant power in the new landscape of the Internet and the existing Internet companies are likely to have to work with these newcomers as they may yield material control on the flow of traffic to other applications.”

Social networking sites such as MySpace.com, Facebook.com, Tagged.com, and TagWorld.com have educated consumers regarding the value of these sites and how to use them. Their success has spurred genre-specific social networks such as community-based/social networking news sites and music sites, which are discussed below.

Shoutmouth doesn’t view established social networking sites as competitors since these sites have a general focus. That is, members talk about all aspects of life, from dating to music to movies, etc. Conversely, Shoutmouth is solely focused on music.

B. Community-Based News Sites

Community-based news sites are sites in which members decide what’s newsworthy and what’s not. For instance, on Digg.com, the most prominent community-based news site, members “Digg” stories that they feel are most newsworthy. The stories that the community feels are most important rise to Digg’s homepage, while less important stories get little attention.

Digg’s one million members can submit stories, “digg” stories, and comment on stories. Digg focuses on general news with a slant towards technology, gaming and unique/sensational news. While Digg does have a Music area within its Entertainment section, this receives little focus. In fact, at the time of the writing of this plan, Digg’s music home page only includes one article submitted within the past 48 hours. Furthermore, Digg doesn’t pare down the music category into sub-categories such as Rock and individual music artists. Conversely, these sub-categories are the entire focus of Shoutmouth.

Other sites that are similar to Digg include Newsvine.com, Spotback.com and Gabbr.com. Of most relevance is the Digg-like site for music, Noisetap.com, which was launched by Ticketmaster in January 2007.

Like Digg, Noisetap.com allows members to submit and vote for music stories. Noisetap.com is organized by music genre and not by music artist. This most likely will not satisfy the needs of many music fans since they don’t have the ability to find news on the specific artists they care most about. Likewise, without a full-time staff actively researching and publishing news stories at the artist-level, Noisetap.com will never be able to offer the comprehensive news that Shoutmouth does.

While Shoutmouth is currently similar to community-based news sites in that members can submit stories and comment on the news they find most interesting, no established player in the market provides a comprehensive focus on music. In addition, Shoutmouth sees these sites as marketing partners as we have and will continue to submit our stories on them to increase our readership.

C. Community-Based Music Sites

There are many community-based music websites, although none focuses on music news such as Shoutmouth. Conversely, these sites generally give members the ability to create and listen to song play lists. The community acts to help individual members find new music and new friends based on similarities in their music tastes. Prominent sites in this genre include Last.fm, Finetune, Pandora, RadioBlogClub, MyStrands, iLike[1] and iJigg.

Last.fm is the most prominent community-based music site and is a good model with which to compare Shoutmouth. Likewise, we will benchmark our performance against Last.fm as we reach of goal of becoming the premier music news community and focus on becoming the premier music community.

According to Alexa, Last.fm is the 359th most visited site on the Internet. While Last.fm focuses on allowing members to create customized Internet stations based on their music tastes, the site has much additional content and social networking features. For instance, for each artist, Last.fm includes pictures, a bio, concert dates, discography, fans on Last.fm, and similar artists. Fans are also able to create journals and communicate with other fans. Key features that Last.fm doesn’t currently focus on include news and video.

D. Traditional Music Websites

Traditional music websites such as MTV.com, RollingStone.com, Billboard.com, NME.com, AOL Music, and Yahoo! Music tend to have many features such as news, reviews, pictures, videos and audio. While these sites are generally very well done and extremely popular, they are under-serving visitors in two core areas: music news and community .

These sites’ lack of music news stems from the difficulty in creating this news, specifically that it requires filtering through thousands of articles and websites to find relevant stories. Likewise, as discussed, these firms might wish to license our news content in the future.

Regarding community , none of the top music sites are thriving communities. Rather, either these sites offer no community features or they recently began offering select features (e.g., submitting reviews or commenting on articles). Even when available, the community features on these sites are afterthoughts and are not engrained within the core fabric of the sites.

While they haven’t been able to transform their current sites into communities, top music websites clearly understand the power of online music communities and have an appetite for them. For example, in January 2007, MTV invested in social networking website TagWorld. MTV also acquired RateMyProfessors.com and Quizilla.com (teen social network) in January 2007 and October 2006 respectively.

As mentioned previously, our vision is to build and incorporate additional technologies, and use our “army” of members to publish vast amounts of music content on Shoutmouth, in order to fully satisfy music fans and leapfrog traditional music sites in terms of their music content.

E. Official Artist and Fan Sites

Shoutmouth com’s with official music artist websites and fan websites. These sites often include news about the specific artist as well as pictures, videos and other relevant information.

On one hand, official music artist and fan websites are direct competitors to Shoutmouth. This is because some of these sites offer comprehensive news on the specific artist they cover. In addition, many offer forums, discussion boards or other ways to communicate with other fans.

However, two factors separate Shoutmouth from these types of sites: 1) breadth and 2) sophistication.

• Breadth : Most music fans love more than one artist. As such, in order to get the news they want, they would have to visit/join multiple fan or artist websites rather than getting all of their news from Shoutmouth.
• Sophistication : While some official music artist websites are technologically sophisticated, offering forums, networking and other worthwhile features, the majority of artist and fan websites have limited usability, functionality and networking ability. In fact, this deficiency has lead to the success of MusicToday, which provides front and back-end technology to power artist websites.

Specifically, MusicToday offers web design and hosting, develops sophisticated online stores, builds online fan clubs and offers web ticketing among other services to select top music artists such as Dave Matthews Band, Christina Aguilera, Kenny Chesney, Britney Spears and Usher. While offering sophisticated tools for select music artist websites, MusicToday offers little to no music news nor advanced social networking functions. For instance, the official Dave Matthews Band website offers less than one news story per month.

F. Direct Competitors: Community-Based Music News Sites

Shoutmouth’s direct competitors are other music news websites that have social or community features that allow users to join the site, submit articles, comment on articles, create public profiles and/or communicate with other members. Shoutmouth has identified one significant player who offers this service, AbsolutePunk.net.

AbsolutePunk.net has done a good job of building a user base (the site claims 125,000+ registered members and nearly 500,000 un-registered members). In addition, the user base is very active — the average story on their site receives approximately 20 comments. AbsolutePunk.net offers music news, reviews, pictures and interviews among other features.

On the negative side, AbsolutePunk.net’s articles are generally posted by one staff writer (as opposed to Shoutmouth’s five writers), most articles are simply one sentence posts rather than full articles, and no attempt seems to have been made to cover all news stories. In addition, the site only covers the punk music genre. Although “punk” is broadly defined on the site, the site doesn’t cater to genres such as R&B, rap and country among others, failing to satisfy the broader market.

AbsolutePunk.net is owned by Indieclick, a Los Angeles-based media company. According to the AbsolutePunk.net website, the site:

• Has developed a loyal (72% return rate) reader base
• 5,182,147 Posts
• 163,535 Threads
• 126,448 Members
• 1,711 Artist Profiles
• 20,774 Multimedia Files
• Approx 76,000 visits per day.
• Approx 276,000 pageviews per day.

Shoutmouth’s Competitive Advantage

In addition to being the first to fill the untapped market void for comprehensive music news, Shoutmouth’s competitive advantage in the market primarily includes the following:

Online Marketing Sophistication

Content Development Experience and Expertise

Shoutmouth’s team, primarily team members DL and PF, has operated an affiliate marketing business focusing on music for the past four years. Affiliate marketing is defined as a system of revenue sharing between one site (the affiliate) which features an ad or content designed to drive traffic to another site (the merchant). The affiliate receives a fee based on traffic to the merchant which converts to sales.

Our affiliate business has focused on connecting music fans, primarily aged 13 to 30, with music offers such as iPods and ringtones. Over the past two years, we have successful sold affiliated offers to over 500,000 customers. We have become a significant online advertiser, receiving Google’s “over 1 million leads” award, and are recognized as a major player among the top affiliate networks.

It is important to note that affiliate marketing success has been credited with part of MySpace’s success. This is because effective affiliate marketers understand how to drive and convert on Internet traffic.

Shoutmouth will employ its affiliate marketing techniques to drive traffic to Shoutmouth.com and enroll members. We will utilize technologies and proprietary techniques that allow us to monitor multiple metrics such as the cost per visitor, cost per member sign-up, etc., so that we can set and maintain profitable metrics.

Another venture that Shoutmouth team members, primarily PK and DL, launched was the development of over 3,000 niche websites. To create the content for these websites, we employed a virtual work force of over 90 researchers in India and 30 writers and editors in the US.

This experience taught us how to manage a large workforce, train writers to improve content quality and motivate a large group of people. These skill sets will be critical in allowing Shoutmouth to grow the content of the site, as developed by both staff and members, while maintaining quality standards.

IV. Marketing Plan

Shoutmouth’s marketing plan includes the following:

Online Advertising : Shoutmouth will initiate pay-per-click advertising campaigns on Google and Yahoo! in order to inexpensively drive traffic to the site. Specifically, Shoutmouth believes it can drive qualified traffic to the site for 20 cents per visitor and achieve a 20% member conversion rate, thus generating members at a cost of $1.00 per member.

Keys to Shoutmouth’s success in achieving this metric include:

• Conducting thorough keyword research and advertising on appropriate keywords and keyword groups
• Creating advertising text that maximizes click through rates
• Creating landing pages that maximize conversions while maintaining the highest Google AdWords quality score possible
• Closely monitoring conversions to quickly stop and/or modify unprofitable campaigns
• Getting individuals to enter their email address to join the newsletter is much easier than getting them to join a site where they have to create a username, select a password, etc. As such, step one will be to get visitors to sign up for artist-specific newsletters.
• Once on the newsletter distribution list, members will constantly receive messages (embedded in their daily newsletter) regarding the benefits of participating more on Shoutmouth.
• Active Shoutmouth Membership: the constant reminders regarding Shoutmouth’s value proposition in the daily newsletters will influence members to participate more actively on the site (e.g., customize their profile, visit the site more often, etc.).

Invite-A-Friend : Shoutmouth is in the process of creating an aggressive invite-a-friend/member referral program. In doing so, we are following the lead of social movie community, Flixster, which grew to 5 million members within 10 months. It did this by encouraging members, during their initial registration process, to upload and send an invitation to multiple contacts in their email address books. The technology to develop this process is fairly complex and we expect to be completed with and to rollout this program in June 2007.

Direct Email Marketing : Shoutmouth will directly contact bloggers and prominent music fans we find online to tell them about Shoutmouth, encourage them to join, and encourage them to write about Shoutmouth on their blogs and online journals .

Creating/Distributing Buzzworthy/Viral Content : Shoutmouth plans to have several buzzworthy/viral articles (i.e., content that people would want to email to their friends since it is funny, interesting, etc.) on the site each day. With a single click, visitors will be able to send these articles to social bookmarking sites such as Digg.com or Fark.com, where these articles could receive widespread attention. In addition to our traditional news stories, Shoutmouth will also periodically create special reports/features in order to satisfy our members and visitors and to try to get widespread exposure.

An example of the power of such buzzworthy content, Shoutmouth has already succeeded in having two stories accepted by Fark and Digg, which have brought in over 50,000 unique visitors.

Super Fans/Street Team Development : Shoutmouth also plans to recruit “super fans.” Super fans are individuals who are passionate about a certain music artist/band and actively contribute articles and/or comments on Shoutmouth. We will recruit these fans, reward them with status (e.g., adding a gold Shoutmouth headphones image to their profile page) and encourage them to more aggressively promote the site by:

• Submitting more news to Shoutmouth
• Commenting on more articles on Shoutmouth
• Growing the Shoutmouth community around their favorite artist(s) by actively recruiting new members to join the site (such as actively posting Shoutmouth-related comments on their MySpace pages, on other music forums, etc.)

Public Relations : Upon financing, Shoutmouth will hire a public relations firm to help us get mentions in media sources ranging from magazines, newspapers, radio, television and blogs. To date, we have developed and issued press releases via Billboard Publicity Wire which have been syndicated throughout the web. An effective PR firm will enable Shoutmouth to quickly reach a wide audience.

Widgets : Shoutmouth will create artist-specific and genre-specific music news widgets. For example, our U2 widget (see example on right) would include all of the recent U2 articles published on Shoutmouth. The widget can easily be placed on MySpace pages, blogs, etc. Each story title in the widget links to the full article on Shoutmouth.

Shoutmouth has great expectations for our widget. To begin, no such widget currently exists as there is no one place to get comprehensive news for specific music artists. Secondly, each time someone places a Shoutmouth widget on their blog or social networking page, it will effectively market Shoutmouth to a wide audience at zero cost to us.

V. Technology/Site Development Plan

This section provides a brief roadmap of the initial and future functionality of Shoutmouth.

Initial Site Functionality

The initial Shoutmouth website will include the following features:

• Ability to submit and comment on news stories
• Ability to suggest new music artists to add to the site
• Ability to create user profiles
• Ability to receive customized news and email alerts
• Articles categorized by artist and core genre (e.g., Rock, Rap, Pop, etc.)
• Music artist sections which includes News, Bio and Fans

Future Site Functionality

Shoutmouth will use news and basic functionality as the platform though which we will build a thriving music community. After initial launch, the Shoutmouth technology team will work on incorporating additional features such as:

• Ability to message other members via the site (e.g., members will have an Inbox on the site)
• Event calendars: members will receive online calendars. With the click of a button, the member will be able to add tour dates of their favorite artists/bands to their calendar.
• Articles also categorized by sub-genre (e.g., Alternative Rock, West Coast Rap, etc.)
• Music artist sections to also include videos, audio files, photo galleries, reviews and event calendars to which members can upload files and vote on top content.
• Forums and member blogs
• Music compatibility testing (suggestions on song/artists members might like)
• Trivia quizzes
• Music playlists

VI. Financial Plan

Revenue Model

During the first six months, Shoutmouth will not generate any revenues as it will not sell advertising space nor offer products for sale. This decision has been made to spur the growth of the Shoutmouth community. By initially positioning Shoutmouth more as a non-profit, for-the-people-by-the-people venture, members will be more prone to promote the site and invite their friends than if the site looks too commercial.

Starting in September 2007, Shoutmouth will primarily generate revenues from selling advertising space. As technologies (such as the Snocap music widget) evolve that allow us to seamlessly integrate music sampling and purchasing on our site, sales of downloadable music are also expected to be a significant revenue source. To a lesser extent, we may sell other music-related items such as ringtones, concert tickets, and apparel.

Funding To Date

To date, Shoutmouth’s founders have invested $500,000 in Shoutmouth, with which we have accomplished the following:

• Built the site’s core technology
• Hired and trained our core staff (we currently maintain an 11-person full-time team)
• Populated the website with content (over 10,000 articles and 1,200 artist bios)
• Generated brand awareness among music fans, including driving 50,000 unique visitors in March, 100,000 unique visitors in April, and 200,000 unique visitors in May 2007.

Funding Requirements/Use of Funds

Shoutmouth is currently seeking $3 million to provide funding for the next 24 months. At this point, the site will be profitable and can grow organically, or additional capital may be sought to more aggressively expand our member base.

The capital will be used as follows:

• Execution of Marketing plan : in order for Shoutmouth to grow its visitor and member base, we need to invest dollars in online advertising and public relations. With regards to online advertising, we are confident that we can enroll members at a cost of $1 per member, which is a fraction of the value of the members to an acquirer (minimum $25 per member), thus providing a significant return on our marketing investments.
• Execution of Technology plan : in order to build a thriving community, Shoutmouth needs to offer its visitors a “stickier” website and enhanced features. We currently maintain a vast “wish list” of features, such as members uploading and rating pictures and videos, trivia quizzes, and member-to-member messaging, that will significantly improve the site’s functionality and value proposition.
• Staffing : In order to reach our goals, we will have to hire additional technical and operations personnel.

Financial Projections

Below is an overview of Shoutmouth’s Financial Projections for the next three years. Please see the Appendix for the full financial projections and key assumptions.

Exit Strategy / Valuation Metric

Shoutmouth’s most likely exit strategy is to be acquired by a traditional music website or property (e.g., Viacom/MTV, Ticketmaster, Rolling Stone), an entertainment/media conglomerate (e.g., Yahoo!, IAC/InterActiveCorp, NBC), or a large social networking site (e.g., News Corp/MySpace).

This strategy is supported by the significant M&A activity in the social networking market, which includes the following transactions over the past 24 months:

Regarding valuation, below are the estimated valuations of social networking companies on a per member basis upon exit:

• Del.icio.us: $50 – $100 per member
• MySpace: $25 per member
• Xing (business social network): $137 per member at IPO in 10/06
• Flickr: $56 – $130 per member
• Grouper: $130 per member

Based on this data, not only are social networking sites a promising investment, but sites that can acquire members for less than $25 each (a conservative valuation estimate based on the figures above), should earn a solid return on investment. As discussed above, Shoutmouth’s goal is to acquire members for no more than $1 each.

In addition, per the membership projections above, Shoutmouth’s valuation at the end of 2009, at a $25 valuation per member, is expected to be $239 million. A more conservative, using a 24.4 time EBITDA multiple (the average multiple of tech M&A deals in 2006 according to The M&A Advisor), yields a $121 million valuation in 2009.

Shoutmouth’s founding team includes entrepreneurs and managers with a track record of success and a history of successfully working together.

Management Team

DL, Co-Founder and CEO

D has a history of successfully launching and growing businesses of all sizes. As president and co-founder of an entrepreneurial services firm., D has personally assisted in the launch and development of over 100 ventures.

Over the past three years, D founded and has managed The Kisco Group which includes an affiliate marketing division (2006 revenues exceeded $3 million), a search engine optimization business which includes a network of 3,000 websites (2006 revenues exceeded $500,000) and an e-commerce business (which includes TopPayingKeywords.com and ShowerHeadsEtc.com).

D earned his Bachelors degree from the University of South Carolina.

PK, Co-Founder and Vice President of Operations

For the past two years, P has managed The Kisco Group’s search engine optimization business where he hired, trained and managed nearly 100 employees and a dozen outside firms. During this time, P has honed his management skills with regards to content development, marketing and operations.

P has had a passion for music since childhood and has been a semi-professional drummer for the past 15 years.

P earned his Bachelors of Arts degree, magna cum laude, from Clemson University.

PF, Co-Founder and Vice President of Technology

For the past year, P has managed The Kisco Group’s affiliate marketing business. In addition to setting up and managing widespread marketing campaigns, P has developed sophisticated analytic techniques to precisely analyze web traffic in order to optimize profitability.

Since August 2006, P has shifted his efforts and leveraged his technology skills in developing the Shoutmouth website. P has been instrumental in selecting the Content Management Platform upon which Shoutmouth is built, and finding and managing the technology team.

P earned his Bachelor of Arts degree from Swarthmore College.

AB, Marketing Manager

A’s background in music includes being a singer, songwriter, guitarist and producer. He has also worked on the marketing side of music, having marketed Veritas Records through the development and distribution of promotional materials.

A’s career also includes psychological research and administration, having served as a Research Assistant with the Interpersonal Perception And Communication Laboratory in Cambridge, MA.

A earned his Bachelor of Arts degree in Psychology from Ohio State University.

M, Lead Technology Developer

M is an experienced web programmer with expertise in web design, application development and database development among others.

M’s work experience includes serving as a Senior Developer at Spheres. M has also engaged in multiple, long term freelance projects including serving as a Database Developer Consultant with The Penn Group and a Web Developer Consultant with Volution Media Group and Allied Online Consulting Group.

M earned his Bachelors degree in Computer Science with a minor in Cognitive Science from Rutgers University.

Content Development Team

Shoutmouth’s writing team, managed by PK, includes the following members:

• JS, Editorial Manager: former content manager and copywriter for Scholastic Inc. and Promotions.com.
• TZ: former music intern (Virgin Records and WRRV) and author of the blog, The Tom Z Show .
• ML: former assistant editor for Adventure Publishing; author of the blog Certified Gangsta ; and former editor-in-chief of Fordham University’s newspaper The Paper .
• SB: former staff writer for Paste Magazine , The Clarion Ledger , and Nightclub and Bar Magazine among others.
• CSJ: former editorial intern for Rolling Stone and Editorial Assistant for Psychology Today .

Outsourced Technology Team

Shoutmouth works very closely with 2skies, a technology firm based in Australia with staff in Australia and the United States. 2skies is run by JDN, one of the co-founding developers of XE, the platform upon which Shoutmouth is built.

XE is an extensible, Open Source web application framework written in PHP and licensed under the GNU General Public License. XE delivers the requisite infrastructure and tools to create custom web applications that include fully dynamic multi-platform Content Management Solutions (CMS).

VIII. Appendix: Shoutmouth Financial Projections   3-Year Income Statement

3-Year Balance Sheet

As of December 31

3-Year Cash Flow Statement

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It takes time to build a marketing plan and it will change anyway, right? 100%. But creating your digital marketing plan is worth every minute of your time. If you build a business without a marketing plan, it’s like constructing a house without a blueprint. And you need a really good marketing plan template to get you on the right track.

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What is a marketing plan?

A marketing plan is a document that details how you're going to execute your strategy. It's written for a specific period of time and explains both your current situation and your future plans.

What’s the difference between a marketing plan and a business plan?

A marketing plan may be part of an overall business plan. A solid online marketing strategy is the foundation of a well-written marketing plan. While a marketing plan contains a list of actions, without a sound strategic foundation, it is of little use to a business. It has to have a set of concrete tasks and marketing tactics to follow.

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There are a ton of reasons why every brand and marketing team needs a good marketing plan.

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Create better goals

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The purpose of a marketing plan is to ensure that marketing activities are relevant and timely to achieve the organization's business objectives. It's a plan defining a sustainable competitive position and defining the resources necessary to achieve it.

Now that you know what a marketing plan is and what’s used for let’s talk about the key components that it’s built out of.

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A good marketing plan should have the following parts -

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And as a bonus we’ve added two more sections:

11. BONUS: How to assemble the right marketing team 12. BONUS: Top tools for marketing plan creation & design

Each of these key elements is vital for the right execution of your marketing strategy and I promise you it’s not as difficult as it looks.

Let’s dive in.

1. Create an executive summary

This might seem a little too formal for some marketers out there but it’s essential and I’ll explain why.

Marketing plans tend to get really long so it’s better to create a quick summary and highlight some of the key points of every aspect of your plan right at the beginning. This becomes the foundation of your marketing plan.

There is no set length for an executive summary but it should cover all of the main elements of your marketing plan. It should also quickly tell your story and highlight what you are trying to achieve. Add your KPIs, marketing channels, market strategy, and budget.

A good executive summary should give a quick taste of the entire plan and entice the reader (investor, upper management, CEO, etc) to read the rest.

Here’s a great 2-minute video from Hubspot that shows how to write an executive summary from start to finish.

The next section of the marketing plan has to do with your “why”.

2. Create a mission statement

A good mission should have 3 critical components -

• An overall mission or vision of the company
• The company’s core values
• The goals and marketing objectives

The key is to keep it precise, short, and powerful. Don’t write a long essay, don’t just throw a bunch of jargon around, and do get some input from the employees at the company.

Employee feedback on this is critical because marketing and sales activities have to align with the mission of the company so all the various teams in the business have to be in agreement on the general mission.

The worst thing you can do is have a mission that has no direct correlation to the actual activities or tasks. Such a mission won’t help you grow your business .

What’s the difference between the company vision and its mission?

The vision is like the why, the overarching goal and foundation of the company. The company’s mission includes the vision and adds to it the actions and activities that the company will do to help advance its vision. Here’s a great video by Simon Sinek that explains this concept.

Now let’s talk about how you are going to go about achieving that mission.

The first step is to understand the market and your particular industry.

3. Market analysis

Have you ever seen the TV show Shark Tank?

The first part of any pitch is a personal story and a quick description of the founders’ “why”. This is where you can find the vision and mission of the company.

Next, they almost always mention the size of the market and they quantify the opportunity that they are presenting to the sharks.

This is exactly what a market analysis is.

A market analysis is a quantitative and qualitative assessment of a market. It looks at the size of the market in terms of the value ($) and volume (quantity of product sold) and often highlights some of the latest trends or environmental conditions that define the opportunity cost.

So how do we do this?

A great way to structure this is by using the SWOT analysis technique.

What is a SWOT analysis?

A common marketing framework that can help you create a good marketing analysis is called the SWOT framework . It stands for strengths, weaknesses, opportunities, and threats .

Strengths - what is your company really good at? what makes you unique? what unique advantages do you have over your competition? What is your value proposition? What are some of the key resources, processes, and capabilities that your company has?

Weaknesses - what are the weakest points of the business? What are some of the areas in which you could improve on? What is your company lacking compared to your competitors?

Opportunities - what are the biggest trends in the market that could give your company an edge or an advantage? These could be demographic patterns, lifestyle choices, population dynamics, or governmental regulatory policies.

Threats - what are some of the external factors in the market that could negatively impact your business? What are some environmental factors that you should be aware of? What are some possible changes that could threaten your business performance and success?

Pro tip: Want to do your own SWOT analysis? Get our Marketing SWOT Analysis Template .

4. Competitive analysis

The next vital step is to understand your competition and what the competitive landscape looks like in your industry or niche.

The main questions your competitive analysis should answer are:

• Who are the competitors?
• What marketing strategies are they employing?
• And how are they going about achieving their goals?

Here’s one of my favorite competitive analysis frameworks from the renowned Myk Pono:

Now that you’ve completed your competitive analysis it’s time to zero in on your ideal customer.

5. Define your target market and buyer personas

The best way to create target personas for any brand is by creating a customer journey map. A customer journey map is a visual representation of all the various touchpoints that your brand has with a prospective customer.

This is a critical part of creating your marketing strategy.

Google introduced the moment of truth concept and this really relates to our discussion of marketing channels but it’s important to mention here as well.

Shoppers can find and interact with your brand through hundreds of channels, both online and brick-and-mortar. The Zero Moment of Truth (ZMOT) concepts represents that stage of the buyer’s journey that leads them to find your product or solution for their problem.

Identifying the specific problem that the customer is looking to solve is critical. This is how you define your persona and this is what ultimately affects the rest of your marketing decisions.

Here's a great buyer persona template from Hubspot to help you create better audience personas.

6. Define your goals and KPIs

The first step when building a marketing plan is to understand and define which business goals are the plan aiming to achieve. Business and marketing should always go hand-in-hand - remember that. Questions you should answer are:

• What are the business goals I need to achieve?
• What KPIs will get me to achieve my goals?
• What does my marketing funnel look like?

Pricing is often part of the market and competitive analysis sections but sometimes brands discuss it separately. It depends on how important price considerations are for your business and how competitive your market is. For example, if a major advantage in your business is that your product is priced significantly lower than your competition then a pricing strategy will play a key role in your marketing plan.

On the other hand, if you are a brand like Apple that is trading on the quality and its other features more than a price comparison, then your focus will be less on price.

There are 5 common pricing strategies:

1. Cost-based pricing

This is when the price is solely based on the costs of the products. The company simply takes the cost it takes to produce the product or service and adds a markup.

2. Value-based pricing

This strategy is based on the perceived value of your product. So a great example here is a company like Apple that prices its products significantly higher than its competitors because of the perceived value they provide.

3. Competitive pricing

This is when a company sets a price based on what the competition is charging. A great example here is gas stations. Each gas station competes with the other stations on the block, trying to outbid the other.

4. Price skimming

This strategy involves setting a high price and then lowering it as the market evolves. A lot of tech products have a high price when they first launch in order to maximize profit and increased their perceived value.

5. Penetration pricing

Penetration pricing is the exact opposite of price skimming. It involves pricing a product really low at first in order to enter a competitive market, and then increasing the price slowly over time.

Fit your pricing strategy to your target customers

It's important to fit your pricing strategy to the specific customer segment that you are trying to reach. If you are markeing to the early adopters then price skimming will work. If you want to be adopted by the early or late majority then you may have to try penetration pricing.

You can always use customer feedback to get more data on this and make a better decision.

As you can see, there are a lot of different pricing strategies out there. Picking the right one for your business will depend on the previous steps in your marketing plan - the customer (or buyer) pain point, the market analysis, and the competitive analysis.

8. Define your marketing budget

Your marketing budget plan depends on your business stage

Much like marketing goals and KPIs, your budget planning depends on your business lifecycle stage (are you a startup or an established brand). Normally, startups invest more in gaining market share and acquiring new customers, whereas established brands would invest more in retention and reputation.

Your niche is also a factor

Each industry has a different marketing structure and consumer behavior, so your niche defines your marketing budget allocation as well. eCommerce in a competitive niche like fashion, for example, will need ways to lower its CAC (customer-acquisition-cost) and upsell.

Spending tipping point

You can't expect that if you invested $20,000 and got 1,000 leads to keep the same proportion at $200. Every channel should have a different amount allocated to it based on the return on investment (ROI) and your profit margins.

So make sure you invest enough into each channel to move the needle. You can benchmark with other businesses in your niche, or use a rule-of-thumb by which at least 20% of your expected revenue should be invested in marketing.

Lead generation and branding

Start planning your budget.

The first step when planning your marketing budget is to understand what are the growth channels that have worked for you so far and are part of your digital marketing strategy for the next year. According to each channel's effectiveness and cost, you can start allocating your monthly and yearly spend.

Questions you should answer for that are:

• What are the most effective growth channels I have so far?
• Are there more growth channels I want to test next year?
• Does seasonality affect my sales?
• Align your budget with your KPIs (!)

Now that you’ve identified what and how to spend your marketing dollars, it’s time to pick the marketing channels that you will be using to grow your business.

9. Define your marketing channels

It's important to decide on the specific marketing mix that is best for your business. Social media platforms and other marketing channels have absolutely exploded in the last decade so you have a ton of channels to choose from.

Now, remember to have an authentic brand presence on every channel and only expand to ones that fit your brand strategy . Here are some of the top ones that you should consider for your marketing plan template:

Content marketing

Content marketing is very powerful for inbound marketing. Studies show that 60% of marketers create at least one piece of content per day and the year-over-year growth in traffic is 7.8X higher for content leaders.

Companies like Capterra and Quuu attribute their success to really good content.

Now, remember, content is a long-term game, short-term wins are very rare. You should create, design, and post content consistently and continue to optimize.

Social Media

Social media is another powerful marketing aspect of any brand’s marketing strategy. It provides an opportunity for you to present your brand in a visual way through images and videos.

Studies show that 90.4% of Millennials, 77.5% of Generation X, and 48.2% of Baby Boomers are active social media users, so don’t ignore these platforms if your brand isn’t “sexy” enough.

The marketing guru Gary Vaynerchuk has always said that brands in the construction or plumbing industries should absolutely post content and interact with their audience on social media. If you bring people value you will generate leads that will eventually convert into sales .

>> Want to get more engagement and traffic from social?

Email marketing

Email marketing has the highest ROI of any marketing channel. Studies show that marketers make $44 for every $1 they spend on email marketing. It’s 40X more effective than using social media to generate sales.

If you are a B2C company then this is an absolute must. You should be sending out weekly or biweekly campaigns, you should set up some automatic welcome and cart abandonment flows, and you should definitely set up some email automation for the customers that convert through a popup.

If you are primarily B2B you might think that email marketing is not as powerful for you but that is absolutely not the case. According to WordStream , 59% of B2B marketers say that this is the most effective way to generate sales.

Another great way to use this channel is for branding. For example, a lot of companies leveraged the global COVID pandemic to engage in new ways with their target customers. They used really creative ways to send really helpful and cheerful emails that helped lift people’s spirits.

Advertising

Last but not least, there’s advertising. This is our specialty here at Mayple . We have over 1,500 talented ads experts that we match with the brands that we work with. Advertising is an important aspect of your marketing strategy that you should absolutely have on your digital marketing plan template.

There are several ways you could utilize advertising as a marketing channel .

First, there is social advertising. You could advertise on platforms like Facebook, Instagram, Snapchat, Pinterest, LinkedIn, and Quora. Then there are Google Ads that come in the form of PPC or you could use a tool like Taboola or Outbrain to leverage Google’s Display Network.

You could also retarget your site visitors using ads on any of these networks. This type of advertising is particularly effective and we recommend it to all the brands that we work with.

Now let’s talk about your marketing or growth strategy.

10. Define your growth strategy

After you’ve set your marketing goals, KPIs, and budget, it's time to plan your marketing activities for this year! Ready? 💪

What to consider when planning your marketing?

After you figured out what are the channels you're going to invest in, the marketing plan should show all the activities you're going to run under each growth channel.

Here are some examples you can use:

Paid media marketing campaigns

To plan and design your paid campaigns correctly you should know what are the most effective channels you are going to start using and to build a marketing funnel that shows you when are you going to advertise to "first-touch" prospects (people that don't know you yet) and what will remarketing prospects will want to see in order to be persuaded to take the next move.

Now, plan the marketing activities for each of your marketing funnel stages (from the awareness stage to the decision stage) and prospects' journeys from the setup stage to the live campaign stage. You can also add special events and design seasonal promotions in your paid campaigns such as sales season and other special occasions.

Content strategy & distribution

Content marketing is all about connecting with your customer base and potential buyers at every level of the funnel. An effective content distribution strategy should take into consideration the types of content you want to publish and the ideal distribution channels for your potential customers at each stage of the marketing funnel.

Another important thing to remember about content is consistency.

Don't plan your content on social channels if you won't have the resources to be consistent with your posting. It's better to focus on fewer things and do them well. Content can include any valuable engagement you have with your audience, whether it's on your Facebook, on a blog post, or in your email marketing .

Some of your content efforts will be ongoing (for example, SEO) and some will be building assets for future use (for example, Video).

Offline / Local

Ok, so we’ve covered all the aspects of an effective marketing plan.

Now let’s talk about the type of expertise you will need to assemble to execute your strategy.

11. BONUS: How do you build the perfect marketing team?

As we all know, marketing management can be lonely (at every size of business by the way), so a crucial factor in your marketing success is building a good team to execute your marketing plan. It can be an in-house team, a team of experts you hire, or as in most cases, a hybrid of in-house employees combined with marketing service providers ( agencies or freelancers).

3 Fundamentals of a good marketing team:

Here are the three top elements of a really effective marketing team.

I'll start by saying a good marketing team depends first and foremost on its leader (Yeah, that's you!). When you choose the right people and know how to manage them right, your success rates are already good. At the end of the day, good marketing starts with a good strategy, continues with a reasonable plan, and depends on great execution.

Expertise blend

Your strategy and plan require specific human capabilities so they will be executed well. If you're planning on running paid media campaigns, you better start your year with an expert on your team that knows the job and that you can count on to deliver on your expectations.

To decide whether to hire an in-house employee or a service provider, you should consider two things:

• What is more important for you - flexibility or control?
• Do you have access to

In my experience, experienced marketing professionals either demand very high salaries or work independently / in small agencies (for example ecommerce SEO agencies ).

Measurement and performance

We're back talking about your Key Performance Indicators (KPIs), and so should you in every marketing decision you make. After you made sure you have all the needed resources in terms of human talent to get your plan running, you'll need to keep tracking, measuring, and motivating them to be focused on achieving your goals and KPIs.

Not an easy task, especially when you need to measure both in-house employees and service providers. It’s important to understand what KPIs are relevant to each of your team members, and how to run these tracking sessions in a way that will bring everyone together to achieving better results for your business.

Questions to ask a

Questions to assess their experience, with respect to your unique business requirements:

• What industry-relevant experience do you possess?
• What kinds of campaigns have you previously managed?
• Can you show me some examples?

Questions that assess their ability to build the campaign strategy you need:

• How do you plan a campaign?
• How do you decide on each campaign’s distribution?
• Do you A/B test different campaign messages?

Questions about reporting and KPIs - clear expectations!

• Which KPIs do you think are relevant to us?
• Which KPIs do you expect to reach?
• Which reporting format do you use?
• What would be the frequency of the reports you generate?

Excellent. You now know how to assemble your marketing team.

And you might be asking yourself, how do I write this marketing plan? It’s going to take me ages! There is so much research that goes into it, do I have to do it all manually?

The answer is no way! There are a ton of marketing tools & software that can help you create your actionable marketing plan way faster.

Here are a few.

12. BONUS: What are the best tools to use to create a marketing plan?

Here are some of the top marketing tools to use to create your marketing plan.

Tools for research

There are numerous tools to use to obtain all the market research and business analytics for your marketing plan.

Alexa is a great tool to get insights into your market and your competitors. It has some really great advanced features that can show you your site demographics, where your traffic comes from, and the traffic sources of your competitors.

Similarweb is another great tool for research. It’s like Alexa in that it has some very similar features but has more reporting capability, and has other metrics like geography, referring sites, and SEO metrics.

Ahrefs is one of the top SEO tools out there. It can give you some of the most sophisticated information about the types of backlinks you or your competitors have, search engine rankings, and much more.

Tools for collaboration

Basecamp is a great tool for team collaboration. You can use it to message your team, store and organize project files efficiently, and work better with your team. There are so many data points to gather for your marketing plan and you will need to collaborate with multiple teams in your company.

Slack is another great tool for team collaboration. Though it’s more focused on communication it does provide a great way to store information and collaborate with co-workers (and it has a slick design and an easy-to-use interface).

Speaking of design, let’s talk about visual design tools and software for your marketing plan.

Tools for charts and presentations

This is a great design tool for making charts. They have a really easy-to-use drag and drop design interface that allows you to create fancy charts and diagrams for your marketing plan in minutes.

Canva is a great design tool for all kinds of design projects. It has a wide range of features that you could use to design amazing graphics and download them for your marketing plan.

13. BONUS: Top marketing plan examples

There are so many areas of digital marketing and if you want to be really efficient you should make a plan for each one. The best way to learn is from the experts so let’s look at some of the best sample marketing plans. You can download any of these or save a copy for yourself.

Content Marketing Strategy Template - by Buffer

This is a really great plan for your content. It breaks down every process from discovering your ideal customers, to creating their buyer persona, finding the main challenges that your content could solve, and so on. This is a really in-depth guide designed for any content marketing out there.

Simple Marketing Plan - from Cengage

Here’s another really great marketing plan example. This one looks really old school, so if you are a visual learner this one is probably not for you. But if you want to see a really well-written explanation of every section of a traditional marketing plan, you will get a lot of this example. Download it and fill it out, you will get a lot of value out of it.

One Page Marketing Plan Template - from SmartSheet

Ok, if that wasn’t simple enough for you, here’s a quick one-page cheat sheet that you can use to quickly summarize your entire marketing plan. This one is really useful for a quick brainstorming session, especially when working with a remote team.

Marketing Strategy Template for Increasing Blog Traffic - from Sumo

Sumo has some incredible marketing plan templates. I used one of their templates to grow an Instagram account from 0-30k subscribers in 18 months. And here they strike again with a super-specific template & strategy on how to take your blog traffic to 10,000 visits in just 12 weeks.

Marketing plan infographic for specific projects - from Visme

Speaking of content, let’s talk about video.

Creating a video strategy for a brand can be a pretty complex task. You have a bunch of teams, a variety of factors to consider, and it can become a big mess pretty quickly. So, if you want to create a strategic marketing plan template for a specific project like that, then use this infographic template from Visme to display everything and make it all really easy for the whole team to follow.

This format is especially powerful when you’ve hired a digital marketing consultant because that’s when things can get a little unclear. So organizing every project into a quick infographic can provide a really great way to keep everyone organized.

Email List Marketing Strategy Template

An email list is one of the most powerful tools any business has. It’s really hard to grow your list and keep subscribers engaged. Here’s a great marketing plan example for growing a list to over 1,500 new subscribers in 12 weeks.

Email Marketing Plan Template - from Hubspot

Here’s a great email marketing planning template from Hubspot that helps you create better emails. Hubspot is an incredible software product for any brand and they make incredible templates and guides on virtually every aspect of digital marketing. This template in particular has 3 parts - email planning, analytics, and A/B testing.

Ecommerce Marketing Plan Template - from Sumo

We’ve been focusing more and more on eCommerce businesses recently, and you can learn all about it in our eCommerce marketing guide . Here’s an example of a marketing plan that takes you through all the steps of growing your eCommerce revenue in 12 weeks.

eCommerce Marketing Plan Example - from Drip

Here’s another great marketing plan example from Drip. This one is a broad overview of each section and has some additional tracking info to fill out, that the other plans didn’t cover. It’s a quick and easy one.

14. How to Create a Social Media Marketing Template

This is something that we get asked often. Sometimes a marketing manager or brand owner doesn’t want to design a whole new marketing plan from scratch, but only wants to focus on their social media.

How do you go about creating a social media marketing plan ?

Here’s a high-level overview of how to go about it.

1. Choose your SMART Goals.

We’ve spoken about this at the beginning of this article, and it’s super crucial that any kind of plan starts with some goals that make sense.

SMART stands for -

Here’s an example of a vague goal:

-We will increase our blog traffic to 100k monthly uniques.

Here’s how you turn that into a SMART goal:

- We will increase our blog traffic by 10% each month for the next 12 months by increasing all of our posts to 3,000 words and optimizing on-page content.

Did you notice how I set a deadline on that SMART goal?

T stands for time-bound and deadlines are absolutely crucial.

2. Define your target audience

It’s time to narrow down who your ideal customer is.

First, start by looking at your data on Google Analytics or any other tool you’re using. Find out as much information on your audience as you can.

This could include:

• Average income
• Shopping habits

3. Look at your competitors

4. analyze your social data.

Now that you know what your competitors are doing, compare that to where you are holding with your current marketing efforts.

Look at the following things on each channel:

• How many followers do you have
• How much engagement (likes & comments) you get
• Which types of posts are most successful
• Days of the week and times your account gets the most engagement
• Best times to post

5. Decide on accounts & channels

Next, choose the right social media platforms for your business. Decide which ones you want to use and for what purposes. It could be that one channel you could use for impressions, and on the other one, you really care about the engagement.

Here’s what we do at Mayple:

• Facebook - Organic impressions + ads to get new brands and marketing experts signed up -> lead generation and sales
• Instagram - Organic impressions + engagement aimed at marketers
• LinkedIn - Organic engagement + traffic for brand growth

You might find that Pinterest is a perfect platform to get traffic, while Instagram is primarily for sales. It totally depends on the industry, design, content format, and type of business you have.

6. Get some inspiration

Now that you’ve decided on the channels you’re going after, look at some of the best social media posts for your niche and make an inspiration wall for yourself.

Look for posts or videos that catch your eye, designs, color schemes & messaging that would work well for your content.

7. Decide on post types and formats

Next, decide on the exact types and formats of your posts.

Here are a few post formats you could pick from:

• Carousel posts
• Instagram Stories
• Short-form content
• Long-form content

I recommend deciding on 4-5 formats and testing them out for a few weeks.

8. Create a social media calendar

Now it’s time to put it all together into one calendar.

Use a scheduling app like eClincher , Sendible , CoSchedule , or Later .

They all have different features, so find something that fits your needs and budget.

Once you upload all of your posts into one calendar you can see it all visually, and see your post frequency for each platform.

9. Test for 30-60 days and re-evaluate

Are you excited? It’s time to launch this thing!

Launch your posts for the next 1-2 months and see how they do. After 2 months, re-evaluate your progress, and double down on the posts that did really well.

Take out the posts that didn’t do so well.

Continue optimizing as you go along.

Top Social Media Plan Templates

Here are a few of our favorite social media plan templates. You can use these to plan your calendar, to better optimize your strategy, and to rock out like the top brands out there.

Social Media Audit Template by Hootsuite

This template is a really great general for all of your needs. They have a separate tab for Instagram, Facebook, Twitter, LinkedIn, Snapchat, and Pinterest. Each tab is divided into a grid for all your accounts, performance, audience, goals, and even a SWOT analysis. These guys cover it all!

Get it ->

We’ve covered pretty much everything you need to know about how to plan, create, and design your digital marketing plan. Your plan should be the basis for all of the marketing initiatives of your marketing department. It should serve as the guideline for creative marketing material, setting up your campaigns, and your plan of action.

We’ve already created a really effective marketing plan template, which you can get - here .

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Introducing Microsoft 365 Copilot – your copilot for work

Mar 16, 2023 | Jared Spataro - CVP, AI at Work

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Humans are hard-wired to dream, to create, to innovate. Each of us seeks to do work that gives us purpose — to write a great novel, to make a discovery, to build strong communities, to care for the sick. The urge to connect to the core of our work lives in all of us. But today, we spend too much time consumed by the drudgery of work on tasks that zap our time, creativity and energy. To reconnect to the soul of our work, we don’t just need a better way of doing the same things. We need a whole new way to work.

Today, we are bringing the power of next-generation AI to work. Introducing Microsoft 365 Copilot — your copilot for work . It combines the power of large language models (LLMs) with your data in the Microsoft Graph and the Microsoft 365 apps to turn your words into the most powerful productivity tool on the planet.

“Today marks the next major step in the evolution of how we interact with computing, which will fundamentally change the way we work and unlock a new wave of productivity growth,” said Satya Nadella, Chairman and CEO, Microsoft. “With our new copilot for work, we’re giving people more agency and making technology more accessible through the most universal interface — natural language.”

Copilot is integrated into Microsoft 365 in two ways. It works alongside you, embedded in the Microsoft 365 apps you use every day — Word, Excel, PowerPoint, Outlook, Teams and more — to unleash creativity, unlock productivity and uplevel skills. Today we’re also announcing an entirely new experience: Business Chat . Business Chat works across the LLM, the Microsoft 365 apps, and your data — your calendar, emails, chats, documents, meetings and contacts — to do things you’ve never been able to do before. You can give it natural language prompts like “Tell my team how we updated the product strategy,” and it will generate a status update based on the morning’s meetings, emails and chat threads.

With Copilot, you’re always in control. You decide what to keep, modify or discard. Now, you can be more creative in Word, more analytical in Excel, more expressive in PowerPoint, more productive in Outlook and more collaborative in Teams.

Microsoft 365 Copilot transforms work in three ways:

Unleash creativity. With Copilot in Word, you can jump-start the creative process so you never start with a blank slate again. Copilot gives you a first draft to edit and iterate on — saving hours in writing, sourcing, and editing time. Sometimes Copilot will be right, other times usefully wrong — but it will always put you further ahead. You’re always in control as the author, driving your unique ideas forward, prompting Copilot to shorten, rewrite or give feedback. Copilot in PowerPoint helps you create beautiful presentations with a simple prompt, adding relevant content from a document you made last week or last year. And with Copilot in Excel, you can analyze trends and create professional-looking data visualizations in seconds.

Unlock productivity. We all want to focus on the 20% of our work that really matters, but 80% of our time is consumed with busywork that bogs us down. Copilot lightens the load. From summarizing long email threads to quickly drafting suggested replies, Copilot in Outlook helps you clear your inbox in minutes, not hours. And every meeting is a productive meeting with Copilot in Teams. It can summarize key discussion points — including who said what and where people are aligned and where they disagree — and suggest action items, all in real time during a meeting. And with Copilot in Power Platform, anyone can automate repetitive tasks, create chatbots and go from idea to working app in minutes.

GitHub data shows that Copilot promises to unlock productivity for everyone. Among developers who use GitHub Copilot, 88% say they are more productive, 74% say that they can focus on more satisfying work, and 77% say it helps them spend less time searching for information or examples.

But Copilot doesn’t just supercharge individual productivity. It creates a new knowledge model for every organization — harnessing the massive reservoir of data and insights that lies largely inaccessible and untapped today. Business Chat works across all your business data and apps to surface the information and insights you need from a sea of data — so knowledge flows freely across the organization, saving you valuable time searching for answers. You will be able to access Business Chat from Microsoft 365.com, from Bing when you’re signed in with your work account, or from Teams.

Uplevel skills. Copilot makes you better at what you’re good at and lets you quickly master what you’ve yet to learn. The average person uses only a handful of commands — such as “animate a slide” or “insert a table” — from the thousands available across Microsoft 365. Now, all that rich functionality is unlocked using just natural language. And this is only the beginning.

Copilot will fundamentally change how people work with AI and how AI works with people. As with any new pattern of work, there’s a learning curve — but those who embrace this new way of working will quickly gain an edge.

The Copilot System: Enterprise-ready AI

Microsoft is uniquely positioned to deliver enterprise-ready AI with the Copilot System . Copilot is more than OpenAI’s ChatGPT embedded into Microsoft 365. It’s a sophisticated processing and orchestration engine working behind the scenes to combine the power of LLMs, including GPT-4, with the Microsoft 365 apps and your business data in the Microsoft Graph — now accessible to everyone through natural language.

Grounded in your business data. AI-powered LLMs are trained on a large but limited corpus of data. The key to unlocking productivity in business lies in connecting LLMs to your business data — in a secure, compliant, privacy-preserving way. Microsoft 365 Copilot has real-time access to both your content and context in the Microsoft Graph. This means it generates answers anchored in your business content — your documents, emails, calendar, chats, meetings, contacts and other business data — and combines them with your working context — the meeting you’re in now, the email exchanges you’ve had on a topic, the chat conversations you had last week — to deliver accurate, relevant, contextual responses.

Built on Microsoft’s comprehensive approach to security, compliance and privacy. Copilot is integrated into Microsoft 365 and automatically inherits all your company’s valuable security, compliance, and privacy policies and processes. Two-factor authentication, compliance boundaries, privacy protections, and more make Copilot the AI solution you can trust.

Architected to protect tenant, group and individual data. We know data leakage is a concern for customers. Copilot LLMs are not trained on your tenant data or your prompts. Within your tenant, our time-tested permissioning model ensures that data won’t leak across user groups. And on an individual level, Copilot presents only data you can access using the same technology that we’ve been using for years to secure customer data.

Integrated into the apps millions use every day. Microsoft 365 Copilot is integrated in the productivity apps millions of people use and rely on every day for work and life — Word, Excel, PowerPoint, Outlook, Teams and more. An intuitive and consistent user experience ensures it looks, feels and behaves the same way in Teams as it does in Outlook, with a shared design language for prompts, refinements and commands.

Designed to learn new skills.  Microsoft 365 Copilot’s foundational skills are a game changer for productivity: It can already create, summarize, analyze, collaborate and automate using your specific business content and context. But it doesn’t stop there. Copilot knows how to command apps (e.g., “animate this slide”) and work across apps, translating a Word document into a PowerPoint presentation. And Copilot is designed to learn new skills. For example, with Viva Sales, Copilot can learn how to connect to CRM systems of record to pull customer data — like interaction and order histories — into communications. As Copilot learns about new domains and processes, it will be able to perform even more sophisticated tasks and queries.

Committed to building responsibly

At Microsoft, we are guided by our AI principles and Responsible AI Standard and decades of research on AI, grounding and privacy-preserving machine learning. A multidisciplinary team of researchers, engineers and policy experts reviews our AI systems for potential harms and mitigations — refining training data, filtering to limit harmful content, query- and result-blocking sensitive topics, and applying Microsoft technologies like InterpretML and Fairlearn to help detect and correct data bias. We make it clear how the system makes decisions by noting limitations, linking to sources, and prompting users to review, fact-check and adjust content based on subject-matter expertise.

Moving boldly as we learn  

In the months ahead, we’re bringing Copilot to all our productivity apps—Word, Excel, PowerPoint, Outlook, Teams, Viva, Power Platform, and more. We’ll share more on pricing and licensing soon. Earlier this month we announced Dynamics 365 Copilot as the world’s first AI Copilot in both CRM and ERP to bring the next-generation AI to every line of business.

Everyone deserves to find purpose and meaning in their work — and Microsoft 365 Copilot can help. To serve the unmet needs of our customers, we must move quickly and responsibly, learning as we go. We’re testing Copilot with a small group of customers to get feedback and improve our models as we scale, and we will expand to more soon.

Learn more on the Microsoft 365 blog and visit WorkLab to get expert insights on how AI will create a brighter future of work for everyone.

And for all the blogs, videos and assets related to today’s announcements, please visit our microsite .

Tags: AI , Microsoft 365 , Microsoft 365 Copilot

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Introducing Apple Intelligence, the personal intelligence system that puts powerful generative models at the core of iPhone, iPad, and Mac

New Capabilities for Understanding and Creating Language

Image Playground Makes Communication and Self‑Expression Even More Fun

Genmoji Creation to Fit Any Moment

New Features in Photos Give Users More Control

Siri Enters a New Era

A New Standard for Privacy in AI

ChatGPT Gets Integrated Across Apple Platforms

Text of this article

June 10, 2024

PRESS RELEASE

Setting a new standard for privacy in AI, Apple Intelligence understands personal context to deliver intelligence that is helpful and relevant

CUPERTINO, CALIFORNIA Apple today introduced Apple Intelligence , the personal intelligence system for iPhone, iPad, and Mac that combines the power of generative models with personal context to deliver intelligence that’s incredibly useful and relevant. Apple Intelligence is deeply integrated into iOS 18, iPadOS 18, and macOS Sequoia. It harnesses the power of Apple silicon to understand and create language and images, take action across apps, and draw from personal context to simplify and accelerate everyday tasks. With Private Cloud Compute, Apple sets a new standard for privacy in AI, with the ability to flex and scale computational capacity between on-device processing and larger, server-based models that run on dedicated Apple silicon servers.

“We’re thrilled to introduce a new chapter in Apple innovation. Apple Intelligence will transform what users can do with our products — and what our products can do for our users,” said Tim Cook, Apple’s CEO. “Our unique approach combines generative AI with a user’s personal context to deliver truly helpful intelligence. And it can access that information in a completely private and secure way to help users do the things that matter most to them. This is AI as only Apple can deliver it, and we can’t wait for users to experience what it can do.”

Apple Intelligence unlocks new ways for users to enhance their writing and communicate more effectively. With brand-new systemwide Writing Tools built into iOS 18, iPadOS 18, and macOS Sequoia, users can rewrite, proofread, and summarize text nearly everywhere they write, including Mail, Notes, Pages, and third-party apps.

Whether tidying up class notes, ensuring a blog post reads just right, or making sure an email is perfectly crafted, Writing Tools help users feel more confident in their writing. With Rewrite, Apple Intelligence allows users to choose from different versions of what they have written, adjusting the tone to suit the audience and task at hand. From finessing a cover letter, to adding humor and creativity to a party invitation, Rewrite helps deliver the right words to meet the occasion. Proofread checks grammar, word choice, and sentence structure while also suggesting edits — along with explanations of the edits — that users can review or quickly accept. With Summarize, users can select text and have it recapped in the form of a digestible paragraph, bulleted key points, a table, or a list.

In Mail, staying on top of emails has never been easier. With Priority Messages, a new section at the top of the inbox shows the most urgent emails, like a same-day dinner invitation or boarding pass. Across a user’s inbox, instead of previewing the first few lines of each email, they can see summaries without needing to open a message. For long threads, users can view pertinent details with just a tap. Smart Reply provides suggestions for a quick response, and will identify questions in an email to ensure everything is answered.

Deep understanding of language also extends to Notifications. Priority Notifications appear at the top of the stack to surface what’s most important, and summaries help users scan long or stacked notifications to show key details right on the Lock Screen, such as when a group chat is particularly active. And to help users stay present in what they’re doing, Reduce Interruptions is a new Focus that surfaces only the notifications that might need immediate attention, like a text about an early pickup from daycare.

In the Notes and Phone apps, users can now record, transcribe, and summarize audio. When a recording is initiated while on a call, participants are automatically notified, and once the call ends, Apple Intelligence generates a summary to help recall key points.

Apple Intelligence powers exciting image creation capabilities to help users communicate and express themselves in new ways. With Image Playground, users can create fun images in seconds, choosing from three styles: Animation, Illustration, or Sketch. Image Playground is easy to use and built right into apps including Messages. It’s also available in a dedicated app, perfect for experimenting with different concepts and styles. All images are created on device, giving users the freedom to experiment with as many images as they want.

With Image Playground, users can choose from a range of concepts from categories like themes, costumes, accessories, and places; type a description to define an image; choose someone from their personal photo library to include in their image; and pick their favorite style.

With the Image Playground experience in Messages, users can quickly create fun images for their friends, and even see personalized suggested concepts related to their conversations. For example, if a user is messaging a group about going hiking, they’ll see suggested concepts related to their friends, their destination, and their activity, making image creation even faster and more relevant.

In Notes, users can access Image Playground through the new Image Wand in the Apple Pencil tool palette, making notes more visually engaging. Rough sketches can be turned into delightful images, and users can even select empty space to create an image using context from the surrounding area. Image Playground is also available in apps like Keynote, Freeform, and Pages, as well as in third-party apps that adopt the new Image Playground API.

Taking emoji to an entirely new level, users can create an original Genmoji to express themselves. By simply typing a description, their Genmoji appears, along with additional options. Users can even create Genmoji of friends and family based on their photos. Just like emoji, Genmoji can be added inline to messages, or shared as a sticker or reaction in a Tapback.

Searching for photos and videos becomes even more convenient with Apple Intelligence. Natural language can be used to search for specific photos, such as “Maya skateboarding in a tie-dye shirt,” or “Katie with stickers on her face.” Search in videos also becomes more powerful with the ability to find specific moments in clips so users can go right to the relevant segment. Additionally, the new Clean Up tool can identify and remove distracting objects in the background of a photo — without accidentally altering the subject.

With Memories, users can create the story they want to see by simply typing a description. Using language and image understanding, Apple Intelligence will pick out the best photos and videos based on the description, craft a storyline with chapters based on themes identified from the photos, and arrange them into a movie with its own narrative arc. Users will even get song suggestions to match their memory from Apple Music. As with all Apple Intelligence features, user photos and videos are kept private on device and are not shared with Apple or anyone else.

Powered by Apple Intelligence, Siri becomes more deeply integrated into the system experience. With richer language-understanding capabilities, Siri is more natural, more contextually relevant, and more personal, with the ability to simplify and accelerate everyday tasks. It can follow along if users stumble over words and maintain context from one request to the next. Additionally, users can type to Siri, and switch between text and voice to communicate with Siri in whatever way feels right for the moment. Siri also has a brand-new design with an elegant glowing light that wraps around the edge of the screen when Siri is active.

Siri can now give users device support everywhere they go, and answer thousands of questions about how to do something on iPhone, iPad, and Mac. Users can learn everything from how to schedule an email in the Mail app, to how to switch from Light to Dark Mode.

With onscreen awareness, Siri will be able to understand and take action with users’ content in more apps over time. For example, if a friend texts a user their new address in Messages, the receiver can say, “Add this address to his contact card.”

With Apple Intelligence, Siri will be able to take hundreds of new actions in and across Apple and third-party apps. For example, a user could say, “Bring up that article about cicadas from my Reading List,” or “Send the photos from the barbecue on Saturday to Malia,” and Siri will take care of it.

Siri will be able to deliver intelligence that’s tailored to the user and their on-device information. For example, a user can say, “Play that podcast that Jamie recommended,” and Siri will locate and play the episode, without the user having to remember whether it was mentioned in a text or an email. Or they could ask, “When is Mom’s flight landing?” and Siri will find the flight details and cross-reference them with real-time flight tracking to give an arrival time.

To be truly helpful, Apple Intelligence relies on understanding deep personal context while also protecting user privacy. A cornerstone of Apple Intelligence is on-device processing, and many of the models that power it run entirely on device. To run more complex requests that require more processing power, Private Cloud Compute extends the privacy and security of Apple devices into the cloud to unlock even more intelligence.

With Private Cloud Compute, Apple Intelligence can flex and scale its computational capacity and draw on larger, server-based models for more complex requests. These models run on servers powered by Apple silicon, providing a foundation that allows Apple to ensure that data is never retained or exposed.

Independent experts can inspect the code that runs on Apple silicon servers to verify privacy, and Private Cloud Compute cryptographically ensures that iPhone, iPad, and Mac do not talk to a server unless its software has been publicly logged for inspection. Apple Intelligence with Private Cloud Compute sets a new standard for privacy in AI, unlocking intelligence users can trust.

Apple is integrating ChatGPT access into experiences within iOS 18, iPadOS 18, and macOS Sequoia, allowing users to access its expertise — as well as its image- and document-understanding capabilities — without needing to jump between tools.

Siri can tap into ChatGPT’s expertise when helpful. Users are asked before any questions are sent to ChatGPT, along with any documents or photos, and Siri then presents the answer directly.

Additionally, ChatGPT will be available in Apple’s systemwide Writing Tools, which help users generate content for anything they are writing about. With Compose, users can also access ChatGPT image tools to generate images in a wide variety of styles to complement what they are writing.

Privacy protections are built in for users who access ChatGPT — their IP addresses are obscured, and OpenAI won’t store requests. ChatGPT’s data-use policies apply for users who choose to connect their account.

ChatGPT will come to iOS 18, iPadOS 18, and macOS Sequoia later this year, powered by GPT-4o. Users can access it for free without creating an account, and ChatGPT subscribers can connect their accounts and access paid features right from these experiences.

Availability

Apple Intelligence is free for users, and will be available in beta as part of iOS 18 , iPadOS 18 , and macOS Sequoia  this fall in U.S. English. Some features, software platforms, and additional languages will come over the course of the next year. Apple Intelligence will be available on iPhone 15 Pro, iPhone 15 Pro Max, and iPad and Mac with M1 and later, with Siri and device language set to U.S. English. For more information, visit apple.com/apple-intelligence .

Press Contacts

Cat Franklin

[email protected]

Jacqueline Roy

[email protected]

Apple Media Helpline

[email protected]

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• Microsoft 365

Introducing Copilot for Microsoft 365—A whole new way to work

• Colette Stallbaumer, General Manager, Microsoft 365 and Future of Work
• Microsoft Copilot for Microsoft 365

Microsoft Teams

• Microsoft Viva

Today, we announced Copilot for Microsoft 365 —your copilot for work. Copilot combines the power of large language models (LLMs) with your data in the Microsoft Graph—your calendar, emails, chats, documents, meetings, and more—and the Microsoft 365 apps to turn your words into the most powerful productivity tool on the planet . And it does so within our existing commitments to data security and privacy in the enterprise.

Right now, we spend too much time on the drudgery of work and too little time and energy on the work that ignites our creativity and sparks joy.

Copilot for Microsoft 365

Copilot is integrated into Microsoft 365 in two ways. It works alongside you, embedded in the Microsoft 365 apps you use every day—Word, Excel, PowerPoint, Outlook, Teams, and more—to unleash creativity, unlock productivity, and uplevel skills. Today, we’re also announcing an entirely new experience: Business Chat. Business Chat works across the LLM, the Microsoft 365 apps, and your data—your calendar, emails, chats, documents, meetings, and contacts—to do things you’ve never been able to do before. You can give it natural language prompts like “ tell my team how we updated the product strategy ” and it will generate a status update based on the morning’s meetings, emails, and chat threads.

Recent GitHub data shows that among developers who have used GitHub Copilot , 88 percent say they are more productive, 77 percent say the tool helps them spend less time searching for information, and 74 percent say they can focus their efforts on more satisfying work. 1

Reinventing productivity for everyone

Copilot for Microsoft 365 is integrated into the apps you already use every day, freeing you to focus on the most important work and less on the busy work. Working alongside you, Copilot for Microsoft 365 helps you to unleash creativity, unlock productivity , and uplevel skills.

Copilot in Word writes, edits, summarizes, and creates right alongside you. With only a brief prompt, Copilot in Word will create a first draft for you, bringing in information from across your organization as needed. Copilot can add content to existing documents, summarize text, and rewrite sections or the entire document to make it more concise. You can even get suggested tones—from professional to passionate and casual to thankful—to help you strike the right note. Copilot can also help you improve your writing with suggestions that strengthen your arguments or smooth inconsistencies. Here are some example commands and prompts you can try:

• Draft a two-page project proposal based on the data from [a document] and [a spreadsheet].
• Make the third paragraph more concise. Change the tone of the document to be more casual.
• Create a one-page draft based on this rough outline.

Copilot in Excel works alongside you to help analyze and explore your data. Ask Copilot questions about your data set in natural language, not just formulas. It will reveal correlations, propose what-if scenarios, and suggest new formulas based on your questions—generating models based on your questions that help you explore your data without modifying it. Identify trends, create powerful visualizations, or ask for recommendations to drive different outcomes. Here are some example commands and prompts you can try:

• Give a breakdown of the sales by type and channel. Insert a table.
• Project the impact of [a variable change] and generate a chart to help visualize.
• Model how a change to the growth rate for [variable] would impact my gross margin.

Copilot in PowerPoint helps you turn your ideas into stunning presentations. As your storytelling partner, Copilot can transform existing written documents into decks complete with speaker notes and sources or start a new presentation from a simple prompt or outline. Condense lengthy presentations at the click of a button and use natural language commands to adjust layouts, reformat text, and perfectly time animations. Here are some example commands and prompts you can try:

• Create a five-slide presentation based on a Word document and include relevant stock photos.
• Consolidate this presentation into a three-slide summary.
• Reformat these three bullets into three columns, each with a picture.

Copilot in Outlook works with you in your inbox and messages so that you can spend less time on email triage and more time on communicating—better, faster, and more easily. Summarize lengthy, convoluted email threads with multiple people to understand not only what has been said, but the different viewpoints of each person and the open questions that have yet to be answered. Respond to an existing email with a simple prompt or turn quick notes into crisp, professional messages—pulling from other emails or content that you already have access to from across Microsoft 365. Use toggles to adjust the tone or length of your note. Here are some example commands and prompts you can try:

• Summarize the emails I missed while I was out last week. Flag any important items.
• Draft a response thanking them, and asking for more details about their second and third points; shorten this draft and make the tone professional.
• Invite everyone to a “lunch and learn” about new product launches next Thursday at noon. Mention that lunch is provided.

Copilot in Teams takes the work out of working together. Copilot helps you run more effective meetings, get up to speed on the conversation, organize key discussion points, and summarize key actions so that the entire group knows what to do next. In your chat, Copilot gets you answers to specific questions or catches you up on anything you’ve missed, all without interrupting the flow of discussion. By adding Copilot to your meetings and conversations, you now also have a powerful tool to help with common tasks such as creating meeting agendas based on chat history, identifying the right people for follow-ups, and scheduling the next check-in. Here are example commands and prompts you can try:

• Summarize what I missed in the meeting. What points have been made so far? Where do we disagree on this topic?
• Create a table of pros and cons for [topic being discussed]. What else should we consider before making a decision?
• What decisions were made, and what are some suggested next steps?

Introducing Business Chat

Business Chat is an entirely new experience that works across all your data and apps, empowering you to do things you’ve never been able to do before. Business Chat works alongside you, using the power of the Microsoft Graph to bring together data from across your documents, presentations, email, calendar, notes, and contacts. Bring together information from multiple sources to keep everyone on the team on the same page and moving forward together. Spend less time focused on the tools and more time focused on the most important work. Today, our preview customers will be able to access Business Chat in Microsoft Teams.

Here are example commands and prompts you can try:

• Summarize the chats, emails, and documents about the [customer] escalation that happened last night.
• What is the next milestone on [project]. Were there any risks identified? Help me brainstorm a list of some potential mitigations.
• Write a new planning overview in the style of [filename A] that contains the planning timeline from [filename B] and incorporates the project list in the email from [person].

Extending to Microsoft Viva

Copilot in Viva Engage , one of many places where Copilot will integrate with Microsoft Viva , equips leaders with insightful conversation starters based on sentiments and trending topics across workplace communities and conversations. Copilot will offer leaders suggestions as they draft more personalized posts, with options to add images and help adjust the tone to enrich conversations.

Microsoft Viva Engage

With Copilot, we’re also making the Answers experience in Microsoft Viva Engage fast and efficient. Copilot will offer suggested prompts to enhance the quality of the question being asked. As team members engage, Copilot can suggest responses that keep the conversation going, including bringing in related knowledge and experts.

Building responsibly

Copilot for Microsoft 365 is designed for the needs of the enterprise. Our efforts are guided by our AI principles and Responsible AI Standard and build on decades of research on grounding and privacy-preserving machine learning. Microsoft’s work on AI is reviewed for potential harms and mitigations by a multidisciplinary team of researchers, engineers, and policy experts. We use the Azure Content Moderation Stack across our services to monitor and filter harmful content. Technologies like InterpretML and Fairlearn help to detect and correct data bias.

The Copilot System builds on our existing commitments to data security and privacy in the enterprise. Copilot automatically inherits your organization’s security, compliance, and privacy policies for Microsoft 365. Data is managed in line with our current commitments. Copilot large language models are not trained on your tenant data.

Finally, we have worked to design an experience that prioritizes human agency and puts the user in control. This includes noting limitations, providing links to sources, and prompting users to review, fact-check, and fine-tune content based on their own knowledge and judgment.

Get AI-ready with Microsoft 365

We are currently testing Copilot for Microsoft 365 with 20 customers, including 8 in Fortune 500 enterprises. We will be expanding these previews to customers more broadly in the coming months and will share more on new controls for IT admins so that they can plan with confidence to enable Copilot across their organizations.

Today, the best way to get ready for Copilot is to get on Microsoft 365 , the essential foundation for modern work. Microsoft 365 brings together in a single solution the foundational capabilities required, including identity, applications, management, and security, plus your enterprise data so that you can be AI-ready.

We will share more about pricing and details in the coming months.

More to come

Read about Copilot for Microsoft 365 on our Official Microsoft Blog , and for all the blogs, videos, and assets related to today’s announcement, please visit our microsite .

Learn more about Copilot in Power Apps, Power Automate, and Power Virtual Agents . Visit our WorkLab to get expert insights on how AI will create a brighter future of work for everyone.

Join us at Enterprise Connect on March 27, 2023, where we’ll share more on how Microsoft is using AI to transform productivity. And also join us on April 20, 2023, for the first-ever Microsoft Viva Summit , a free digital customer event, to get a look at the future of AI and Microsoft Viva.

1 Research: quantifying GitHub Copilot’s impact on developer productivity and happiness , Eirini Kalliamvakou, GitHub. September 7, 2022.

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