Written by Niels Wesselink, Enterprise Performance Management consultant

In times of uncertainty, fast and thorough planning in combination with the ability to quickly adapt plans are key for winning organizations. Still, a lot of organizations heavily rely on isolated departments planning, with Excel as the primary tool of choice. To successfully move from outdated spreadsheet workflows to using integrated financial planning, there are important steps and decisions to consider. In this article we describe how the Office of Finance can embark on the path to successful integrated planning.

What is integrated planning?

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

The classical planning approach

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

Very often, several planning versions and long planning cycles are the result, as the different business areas plan in isolation from each other. On top of that, a lot of time is lost reconciling the figures and putting the pieces of “the big picture” together. In many companies, important information is often stored in data silos and the different business units operate independently of each other. As a result, growth targets can only be tackled vaguely, and new opportunities and possible risks remain unrecognized or untapped.

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

Advantages of integrated planning

In contrast to classical planning, integrated planning is:

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

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

 Better alignment with goals

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

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

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

The road to integrated planning

When you embark on a journey to achieve integrated planning, it is important to realize that you create the right conditions to increase effectiveness and efficiency. We mention a couple of these conditions below.

Find a business partner, not just a service provider

A service provider needs to be able to do more than just provide service to support your path to integrated planning. They must not only deliver technology, but also offer added value creation in innovation and best practice. After all, the solution should not only replace old technology with new but should also secure a long-term advantage for the organization.

Accordingly, IT should be strategically involved at an early stage. If the organization already works in the cloud, then planning without the cloud is futile. If your company has a private cloud or internal databases, a local approach or a hybrid solution may be a better fit. Therefore, the provider must be able to react flexibly to your company’s requirements and plan together with you how existing systems will be integrated into the new solution, how data protection and data security will be ensured and how customization options and autonomy for your team will be built in.

Be sure that you look beyond functions and features when selecting a tool, the way it is delivered is at least as important. Shortlisted providers should be able to clarify basic company-specific questions. Instead of focusing on just a software demonstration, check whether the solution meets the requirements of your company. A feasibility workshop is a good idea to test a partner’s capabilities in really understanding your organization.

This proof of value creation acts as a catalyst to engage other stakeholders in the business, because even if it is the Office of Finance that ultimately makes the decision, it is still important that other departments in the organization are convinced.

Define “must-have” and “nice-to-have”

“What do you need?” does seem like a simple question. But when weighing the needs of your organization, it gets much more complex. Therefore, before getting entangled in high-tech presentations from different service providers, it is important to clarify what are the most important “must have” features and what would be “nice to have.”

Features, for example, are important, but ease of use is always more important. Modern, simple, scalable solutions are the best choice for ease of use: A tool with highly complex computational capabilities misses the mark entirely if your team doesn’t ever use 90% of the tool’s capacity. Therefore, circling back to “What do you really need?” is crucial when considering your company-specific requirements.

It is also essential to support team members in their daily tasks, because although there are challenges with spreadsheet-based planning, it is at still firmly anchored in finance.


Involve other departments early on

When implementation of a modern solution starts with Finance, it provides the opportunity for them to become the experts. A quick start with key users supports efficiently building competency and capacity. Realistic goals can be set and achieved within short periods of time.

This is also where slow “new start” approaches pose significant obstacles and challenges. When the path to integrated planning takes six months or longer, team members can change, and you lose sight of the original goals. Efficient implementation of integrated business planning should happen in several quick phases, which in turn supports greater progress on your Digital Transformation journey. As mentioned above, it starts with finance.

This is also where the difference between a planning solution and ERP becomes evident. An ERP system takes significant time and remains relatively unchanged because it maps everyday processes. Instead, the goal of an integrated planning solution is to better support overall performance of the company. Get better data and better insight to support better decisions. To keep pace with these changing business and compliance requirements, the flexibility of integrated planning is needed.

Transform more than just your planning

When your organization is standardizing processes for the first time in some instances, being pragmatic can be helpful on the path to integrated planning. This means that “ready” is sometimes going to be better than “perfect” for the sake of keeping long term goals in sight and on track. But this doesn’t mean the needs of other departments such as HR, marketing, or sales shouldn’t be considered. The long-term vision for integrating planning requires your organization to embrace a holistic approach to integrated planning to also see the positive influence on your Digital Transformation journey.

To fully utilize the potential of integrated planning and the correlating influence on Digital Transformation, all relevant departments must be involved in the process. So instead of presenting a “done deal” that must be accepted by all, create a cross-functional team who can become solution experts, to guide the rest of your organization.

It is common in many organizations for departments to operate completely independently regarding budget and actuals. To encourage integrated planning, stakeholders must first be introduced to uniform methods and approaches.

This is why a structured, phased, and cross-departmental approach lends itself well to transforming more than just planning. Build team competencies, drive the project forward, provide motivation with successful results, and continually improve for the future. All of which supports integrated planning paving the way to your organization advancing its Digital Transformation journey.

5 keys to successful integrated planning

As we learned, the implementation of integrated business planning is a not a small undertaking and often brings significant changes for people, processes, and technologies.

Here are five factors which will help you to successfully master the changeover:

1. Develop a plan with clearly defined goals

A clearly defined strategy is the be-all and end-all of your planning success. Make sure that you have a well-documented, strategic plan with very clear financial goals that is communicated throughout the organization.

Pay attention to meaningful financial goals that are tied to the company’s growth plan. The strategy should include how you can achieve your goal and which business areas and product categories you should focus on. The plan also includes which markets you want to target, and which customer segments will receive special attention. All this information helps the planning team to integrate the strategy into internal plans at an early stage.

2. Work closely between departments

Get the right skill sets sitting around the table. Planning decisions are most accurate when you have the most important information at your fingertips. Interdepartmental collaboration is the key to successful restructuring and the achievement of financial goals.

By involving different departments at an early stage, gaps and needs can be properly identified. It also makes sense to include customer and consumer feedback at this stage.

3. Incorporate current forecasts and prognoses

Predictive Forecasts give you a picture of future market developments. Place your planning on a solid foundation from a reliable forecast of the most important influencing variables of your organization’s plan. How is the procurement of materials, such as production and transport capacity, developing? Which product or service areas have the highest growth rates? These are just a few of the key drivers for your planning results that require a current forecast.

4. Establish common KPIs

Ensure transparent, measurable communication of the current situation and budget targets. Develop joint KPIs that can be used across departments. Also ensure that the definitions of these KPIs are aligned and understood by all stakeholders. This “good governance” enables you to align your actions with common goals. Confidence in the information is also improved and transparency is increased. By speaking the same language, you create “a single version of the truth” and thus ensure a much smoother planning process.

5. Use a professional planning tool

Support the planning process with a modern solution. Modern planning requires a planning tool integrated into your IT landscape that can support the individual steps in the planning process and guarantee that reliable plan values and real-time analysis can be called up at any time. Modern EPM Software, which can be used by multiple departments, promotes collaboration, ensures transparency and ensures success.

This article first appeared on the Jedox website. You can follow this link to read it and read the attached whitepaper.