Most people who are working on IBP can sum up the goals they’re trying to achieve with this process. Those goals usually are defined in their KPI’s and linked to their performance program. These goals and KPI’s are the hard benefits of IBP. Amongst these hard factual goals or benefits of IBP are improved:
– Working capital
– Forecast accuracy
– Customer service levels
What not every stakeholder in the IBP process realizes is that the hard benefits usually come after the soft benefits. Amongst the soft benefits are improved:
– Cross functional communication
– Empowered decision making
When implementing IBP, it is important to manage expectation from senior stakeholders that benefits will usually come in this order. I’ve seen several situations where a couple of months in to the new IBP process, questions from senior leaders arise. Comments like; ‘why have we not seen improvement in this KPI?’ or ‘I thought IBP would solve these issues’, are not unfamiliar in this context.
As IBP manager, the best early indications you can get that things are moving in the right direction are in this ‘soft’ area. An example is a trade marketer who said; ‘since we’re working on the IBP process with you, marketing and sales are communicating much better with each other’. Or a senior executive that mentioned; ‘I really start to believe that IBP is the way to go’.
Many soft indicators can be found in IBP meeting behaviours. If the language used in meetings move from using aggressive and defensive language to using more constructive language, you are heading in the right direction. If not every number in the meeting is scrutinized for its validity, there is improved trust. Meetings that close with a roundtable where all participants provide feedback on the meeting effectiveness and improvement opportunities, show there is a safe environment to discuss these matters.
Soft benefits are harder to measure then hard benefits. Therefore as IBP manager it’s first of all important to make the soft benefits happen, secondly to capture and document these indicators and thirdly to let IBP stakeholders know about them. IBP progress is initially not always visible in the measurements many stakeholders have as their goals, but those measurements are only the top of the IBP iceberg. It’s the soft benefits that hold the IBP iceberg stable in the water.