I’ve written quite a bit about integrated business planning (IBP), which is the process of connecting aspects of the planning function across an organization to improve its internal alignment and financial performance. IBP begins with operational – rather than financial – planning (that is, budgeting) because it’s about running the business and figuring out how to make the financial aspects work to support the business plan. IBP is especially important for corporations in which projects can have a noticeable impact on expenses, revenue and cash flow. This is because of two key differences that set project-type businesses apart from process ones. Planning and managing the financial elements of discrete, high-value activities such as capital investments or important business projects can be time-consuming and problematic. Projects are irregular in both time sequence and use of resources whereas processes are routine and have well-defined inputs. Projects are planned as discrete efforts while processes are recurring and routine and so do not require definition before they are started. It’s really difficult to manage the project-related parts of a business that’s most process driven. To address this problem, Planview introduced an operational planning application earlier this year. Planview’s objective was to address an important gap in the planning software market: enabling companies to plan, manage and assess the both operational and financial performance of their business critical initiatives or (more formally “projects”). Most senior executives would say: “Sure, but can’t we can use our ERP system to do that?” The answer is, unfortunately, no.
Topics: Performance Management, Project Portfolio Management, IT Performance, Operational Performance, Chief Information Officer, Financial Performance, Business Planning, Chief Financial Officer, Initiatives Management, Initiatives Planning, Operational Planning