All ContentBuilding an Integrated Business Planning Capability
Building an Integrated Business Planning Capability
AFP® GUIDE TO
Building an Integrated
Business Planning Capability
FP&A Guide Series
Underwritten by
Contents
What is Integrated Business Planning?
1
People
2
Process
8
Technology
11
Conclusion
14
Introduction
In the permafrost of Alaska and northwest Canada, researchers uncovered the
remains of wolves that hunted during the last ice age. These wolves were
fearsome: larger than today’s wolves, bigger teeth, stronger jaws. Their image is
that of a hunter who specialized in taking down large prey such as mammoths.
Today there is no trace of these “super wolves.” Comparing the fossil DNA with
those of modern wolves revealed no correlation; this prehistoric species died
out completely. How did a species fall from the top of the food chain to a
footnote in history? Quite simply, it failed to adapt.
The super wolves could not adapt as their large prey died out and the
retreating sheets of ice altered their habitat, allowing smaller animals to flourish
in their place. In the commercial world, we see a similar churn in the form of
“creative destruction” — the continuous cycle of product and process innovation
that supplants old ideas with newer, more desirable ones. Unless they adapt,
companies come and go. Only 64 companies from the original S&P 500 still
exist, and one forecast expects an additional 50 percent to depart over the
next 10 years.1 Fully 26 percent of the Fortune 500 fell off the list in 2016.
The pace of this churn is increased by a combination of forces: digitization
of information, storage of that information, and communication networks to
move data around. This is changing our societies as information is disseminated
in real-time, individuals can reach mass audiences, industries both evaporate
and arise with corresponding changes in employment and personal fortunes. In
commerce, Brian Solis captured this churn with the phrase “digital Darwinism,” to
explain that the companies that adapt fastest and most completely will survive.
In their landmark report, The Digital Advantage: How Digital Leaders Outperform
Their Peers in Every Industry, Capgemini noted three key findings:
1. Companies with stronger digital intensity derive more revenue from
their physical assets.
2. Companies with stronger transformation management intensity are
more profitable.
3. Companies with stronger transformation management intensity achieve
higher market valuations.
The authors of this report concluded that companies that successfully leverage
digital technology to transform their business to keep it aligned with changing
market needs create more value for investors. But this type of transformation
is not limited to external connections with customers. It describes internal
capabilities that lead to flexibility and adaptability: to read the market, to align
resources to where they can be most productive, to be able to visualize where
your company is heading, and to react swiftly to change is key to survival.
This is the purpose of integrated business planning, and it puts the FP&A
practitioner at the heart of digital transformation.
Please complete the form to gain access to this content
