The team and I at Ventana Research through development of new research agendas for 2009 have identified business and technology thematic topics that will be critical to all organizations. These topics will be critical for business and IT to be more educated and savvy on how to leverage them for their organizations. These are our assertions and not just predictions for success in this year and we remain optimistic that business can drive significant change in how they use information and technology to advance their processes and people who operate them along with management who need better tools for being effective in their decisions.

Integrated Business Planning
The single most important lesson corporations should have learned from the economic downturn is the value of planning. Most were caught flat footed and struggled to adjust over the past two years as they were whipsawed by wild swings in commodity prices, energy costs, currency rates and ultimately a free fall in the economy.

Should have learned? OK. Actually learned this lesson? We’ll see. Really well-run companies do not operate in reactive mode – they anticipate and quickly take advantage of changes in the business climate. Unfortunately, this isn’t how most of the rest of the world works.

Too many companies focus on budgeting, not planning, and their budgeting process itself is a cumbersome, once-a-year effort. Of course, companies already do a lot of planning outside of the budgeting process. Manufacturing creates production schedules, sales organizations produce pipeline forecasts based on the plans generated by individual sales managers and those running the supply chain establish sales and operations plans. However, these are rarely integrated in any formal way and are out of synch almost immediately. (Revenue projections set in last fall’s budget season are wildly out of date by now, even as sales forecasts have been updated a couple of times.) Our research has shown this lack of coordination often results in “the left hand not knowing what the right hand is doing” (e.g., stock-outs occurring because manufacturing doesn’t know what promotions marketing has scheduled).

Companies need to implement “integrated business planning,” a way for them to enable individual business units to engage in planning activities in ways that inform (and are informed by) the plans of other parts of the business. To do this they need to reduce or eliminate standalone spreadsheets from their corporate planning processes and replace them with dedicated systems that centralize collection of planning data and manage the planning processes themselves.

Now is precisely the time to make the change to the way your company plans and budgets. Recessions are an opportunity for well-run companies to gain ground on the competition.

The downturn in the economy is the reason to change from static budgeting to more dynamic planning that integrates the forward-looking intelligence of the entire company. During better times people only want business as usual. They’ve forgotten the lessons they learned in the recession and it’s harder to implement change. Adopting an integrated planning approach will enable a company reaccelerate faster when business turns around.

Do you have an integrated business plan for your organization?

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