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Case Study: Financial Planning Meets IBP

Financial Planning Integrated Business Planning

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Many organizations struggle with a critical disconnect between financial planning and Sales & Operations Planning (S&OP). This fragmented approach creates a multitude of challenges. In this blog article, you will learn why connecting financial planning with sales and operational planning is crucial to steer your company towards success. We will also share how an integrated approach can be implemented using SAP technology. Finally, you will get an insight into a practical example based on one of our recent projects.

Gaps between financial and sales and operational planning manifest as siloed information, hindering collaboration and leading to outdated data reliance across finance and the supply chain. Without clear financial insights, the supply chain struggles to make informed decisions. Furthermore, limited scenario planning capabilities and unrealistic financial targets restrict informed decision-making, especially in critical situations. This widening gap between financial and S&OP planning demands a clear strategy to bridge the information divide.

The Solution: Integrated Financial, Sales, and Operations Planning

The key to overcoming these hurdles lies in integrating financial, sales, and operations planning. This unified approach fosters alignment through:

  • Synchronized Planning Cycles: Establishing consistent planning cycles and frequencies across departments ensures everyone is working within the same timeframe


  • Automated Data Exchange: Streamlining the exchange of agreed-upon planning data between financial and S&OP processes eliminates manual errors and delays


  • Financial Planning as a Roadmap: Financial planning provides yearly targets and quarterly updates that guide the overall planning process


  • S&OP Drives Feasibility: S&OP offers the latest demand and supply forecasts, ensuring financial plans are grounded in realistic production capabilities


  • Continuous Financial Impact Assessment: Monthly evaluations of the financial impact based on the latest S&OP results enable course correction and proactive decision-making


  • Financial Steering for Performance: By maximizing revenue and minimizing costs based on integrated planning, the financial plan acts as a compass for organizational performance


Financial Planning Integrated Business Planning
Figure 1 : By integrating financial and sales & operations planning, the overall performance can be steered towards maximum revenue and minimum costs

The Benefits of a Unified Approach

Connecting financial, sales, and operational planning provides a multitude of benefits:

Firstly, increased transparency between financial and supply chain planning leads to enhanced data accuracy and reduced fluctuations. With both departments working from the same data set, discrepancies and misunderstandings become a thing of the past. This translates into more reliable forecasts and budgets, allowing for better resource allocation.

Secondly, supply chain planning can be strategically steered towards achieving financial targets. With clear visibility into financial goals, supply chain decisions regarding capacity, sourcing (make-or-buy), and resource allocation can be optimized to align with overall financial objectives.

Finally, the integration of sales, supply chain, and finance fosters a culture of collaborative decision-making. Consistent planning scenarios based on unified data empower all departments to work towards shared organizational goals. This fosters a sense of shared responsibility and accountability, leading to more informed and strategic choices across the entire organization.

Case Study: A Global Semiconductor Company Achieves Full Integration of Financial and Supply Chain Planning

A leading semiconductor company faced a decentralized planning process reliant on disparate Excel spreadsheets. This fragmented approach lacked comprehensive financial planning and integration with S&OP, leading to disjointed handoffs and inconsistent planning data.

The company undertook a strategic initiative to:

  • Identify Planning Disconnects: Analysis of the existing process to pinpoint discrepancies between current practices and best-in-class financial planning standards


  • Merge Financial Metrics into S&OP: Integration of key financial planning metrics into the S&OP process, fostering a holistic view of the organization’s performance


  • Harmonized Data Model Creation: Establishment of a unified data model across S/4HANA, Integrated Business Planning (IBP) systems, Salesforce, and SAP Analytics Cloud (SAC) to ensure data consistency


By implementing these changes, the company achieved:

  • Centralized Planning: A centralized planning approach promoted transparency and collaboration across all departments, fostering a “one number” mentality


  • Enhanced Decision-Making: Data harmonization across various systems led to more informed and granular decision-making


  • Actionable Metrics: The synchronization of financial planning with S&OP provided quantifiable metrics to monitor progress and identify areas for improvement


  • Improved Resilience: Scenario planning capabilities were strengthened by enabling simulations across different processes and systems, allowing better preparation for unforeseen circumstances


Integrating financial planning with S&OP offers a powerful path towards achieving a truly unified business plan. By breaking down silos and fostering a collaborative environment based on shared data, companies can make more informed decisions, streamline operations, and achieve lasting success.

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