I call it the relentless search for value realization. No sooner has the enterprise decided IBP is necessary as the question of ‘where’s the value’ starts. You’ve been given a month following your appointment, why is IBP not deployed, fully functional, and delivering the proclaimed value?
The simple answer is that the first six months is spent uncovering rocks that have laid dormant for many years. It’s akin to an architect survey the land on which to build; to a large extent, the final structure depends both on the plot upon which it is to be built and the skills of the contractors.
As the soil is tested it’s discovered there’s nothing solid upon which to build the foundations. There are no utilities; gas, electricity, piped water near the plot, just long-abandoned groundwater well.
Further challenges emerge when the only contractor has no relevant experience in the specific building design. Perhaps the relevance to IBP is not immediately apparent; liken the bedrock to those foundational capabilities upon which IBP is predicated, the utilities to information and data conduits between functions, and the building contractors to leadership and subject matter experts (SMEs) within the enterprise.
The misconception that IBP is going to miraculously solve issues of deficient or missing foundational capabilities, develop accurate and effective data channels, rewire ERP and MES systems and, overnight, capture the hearts of minds of leadership to adopt and become advocates of integrated business planning is fantasy.
Now revisit the question of value realization. Businesses typically measure value in terms of revenue, margin, cashflow. IBP has been operational for six months and all there is to show is visibility to sub-optimal foundational planning and execution capabilities, a realization data sources are not as reliable nor accurate as originally perceived, a wish-list of information and data flows, and defensiveness from leadership and SMEs resulting from their legacy process being challenged and questioned.
The reality; value is derived from transparency which arises as IBP over-turns each rock, as it stresses data and information flows, as it challenges existing processes and capabilities. Leadership has the choice to address each opportunity or continue to hope for miracles that these issues will solve themselves and IBP will yield the cited economic benefit. Ironically, the leadership team which asks for economic value realization is the same leadership team which is either unaware of sub-optimal capabilities or has chosen to ignore these deficiencies altogether.
IBP and more broadly enterprise business planning (EBP) herald a new era in planning. ‘The thinking organization’, an environment where the reality of complexity is managed as effectively as possible, where choices balance complex trade-offs, where there is no ‘one-size-fits-all’.
The same sophistication is applied to the illusive search for value creation. Accepting value evolves drives a more meaningful discussion; in the early day’s visibility and transparency are valuable attributes, over time value is derived from elevating capabilities, I contend the single greatest value emerges from a leadership team that is prepared to tackle tough issues. Only then, finally, the elusive economic value emerges. With this in mind and visible to all, at each stage of the IBP journey, the effort really does justify the end.
