Business

A Brief Guide To Business Integrated Planning

Arnab Dey

Business Jun 20, 2022

First, let’s begin by stating the definition of integrated business planning (IBP). While used across vast industries, it also can’t be denied that it’s not exactly the most popular term in the business sector. To set it straight this early on, IBP is an enhanced form of Sales & Operations Planning (S&OP) that includes the entire value chain of the business that uses it.

The whole premise of IBP is that it ties together profit-related and strategic business objectives with short and mid-term operational planning decisions through a cross-functional scenario analysis.

Despite its importance, so many businesses still struggle to get started with IBP. Likewise, once they’ve created it, the struggle may not end there since they may find it challenging to integrate it into their entire operations.

To further convince you that it’s definitely worth giving business integrated planning (IBP) a second look. Here’s a brief guide to help you get started as you enrich your knowledge with more information and realize that it’s ideal and feasible for your business.

What business Integrated Planning (IBP) Does

Compared to S&OP, business integrated planning has various advantages. To begin, one of its most significant benefits is that it assists in aligning all of an organization’s different divisions and activities toward a common purpose. This results in ‘soft’ benefits such as increased trust and confidence.

Companies using IBP in their system can expect the following benefits:

1. It Supports Business’ Long-Term Strategy

S&OP methods are most commonly used to support medium-term planning strategies with a maximum period of 18 months. IBP, on the other hand, operates for a longer time to coincide with long-term strategic planning. This includes budgetary planning, as information is entirely compatible with budgets.

2. It Increases Visibility

The term ‘visibility’ refers to supply chain and strategic plan projections. Cross-departmental visibility will improve, allowing those projections and plans to be consolidated into a single corporate strategy, both on your own and with the help of professionals such as a business development consultant. This has the additional advantage of potentially generating better and more robust financial ventures.

3. It Measures Performance In Financial Terms

IBP can evaluate financial performance goals and achievements, mainly when they’re applied from a financial standpoint. This proves to be a significant advantage for firms because it allows them to track their financial objectives. Keep in mind that when your business has that information, effective business management can now be within reach.

4. It Consistently Delivers Outstanding Results

IBP leaders have consistently shown timely and well-delivered outstanding results. This brings in improvements in both the bottom-line and top-line customer service of a company.

5. It Fosters Better Supply & Planning Decisions

Supply chain planning is one of the most critical components that firms must understand. Poor supply chain planning can have disastrous consequences, affecting corporate operations.

You can’t meet client requests if you don’t have enough supplies at any particular time. Not only will you lose economic potential, but you’ll also lose consumer satisfaction. On the other hand, if the supply is overabundant, there will be a lot of waste and surplus storage. This can cause unduly high warehouse operating expenses.

Additionally, if you’re finding it challenging to have optimal supply chain operations, that’s when IBP will come in handy. The information it carries can help support supply chain planning. Now, it’s possible to identify decisions that can improve the bottom line, influencing supply chain planning while enhancing profits.

6. It Improves Accountability Throughout The Organization

Accountability means that you can immediately identify failure to deliver and unsatisfactory performance. That way, they may be addressed before the problems worsen. Better accountability is a natural result when each department has a better knowledge of its plans and responsibilities.

What Are The Basic Elements Of Business Integrated Planning

IBP’s ability to integrate its finances with its business operations is critical. Other fundamental requirements, on the other hand, are as follows:

1. Marketing & Sales Strategy

This is what closes the loop with strategic planning and market research. The sales strategy can be considered successful when the products and services are sold at the expected level.

2. Demand Forecasting & Predictive Analysis

This refers to the use of qualitative methodology, which is regularly checked against the actual sales results.

3. Market Research & Strategic Planning

With this, all documents needed to develop the research and planning methods are available to all employees who need them. Moreover, goal-setting and strategy processes are also well-achieved, without any exceptions.

4. Profitability Analysis

The profitability of a business is shaped by specific financial metrics identified as the cost of goods sold (COGS), net and operating profit margin, and the business’ cash flow. Furthermore, a more accurate profitability analysis can be achieved when all this information is adequately identified.

What Are The Common Pitfalls

A discussion on business integrated planning can’t be complete without discussing the pitfalls and risks when applying it to your business. In addition, awareness of those risks can give you an idea of what needs to be avoided for your IBP efforts and pursuit to be successful.

To start, here are some of the common risks related to business integrated planning:

A lack of commitment comes from the departments responsible.
A thorough understanding of what the trade-offs may be lacking.
Targets and forecasts can be mixed.
Decisions and plans may be too granular.
Information may not be readily available as you expected it to be.

Final Thoughts

Business integrated planning may be highly technical, but it’s not hard to master, especially when you make it a clear-cut goal to learn and adapt for your business. In essence, it combines classic planning, cloud-based solutions, and modern machine-learning heuristics to make better predictive functions.

If you’re keen on applying IBP in your business, it would be best to consult the experts to guide you through the right process. When you have an expert team working to implement this, you can be sure how IBP can benefit your business and yield exemplary results in the long run.

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Arnab Dey

Arnab is a professional blogger, having an enormous interest in writing blogs and other jones of calligraphies. In terms of his professional commitments, He carries out sharing sentient blogs.

What Is A Holding Company? – Importance, Operation, And Pros & Cons

What is a Holding Company? - A Holding Company is a type of company that generates revenue by owning assets and does not conduct any operations, ventures, or active tasks. If you want to start a holding company, you must be prepared to earn revenue by not engaging in the buying and selling of products and services. You can form it to gain control over one or more companies or any other assets. In this article, you will learn about what a holding company is and what is the importance of having a holding company. Apart from that, you will also learn how a holding company works, where we will give you an idea of its operations. Finally, you will learn about the major pros and cons of running a holding company. Hence, to learn more about holding companies read on through to the end of the article. What Is A Holding Company? According to Investopedia, “A holding company is a business entity—usually a corporation or limited liability company (LLC). Typically, a holding company doesn’t manufacture anything, sell any products or services, or conduct any other business operations. Rather, holding companies hold the controlling stock in other companies.” You can understand from this definition that a holding company basically owns the assets of other companies. However, it has the power of only overseeing those assets. Just having a mere oversight does not let the holding company actively participate in the business’s daily operations or the operations of its subsidiaries. In many cases, holding companies are also termed as “umbrella” or parent companies. The major purpose of creating a holding company is to have ownership of investments, which can be private businesses as well. The businesses that a holding company owns are known as subsidiaries. All the subsidiaries of a holding company are responsible for their own debts, and hence holding companies remain protected from the liability of subsidiaries. On the other hand, subsidiaries of a holding company and minority shareholders of the main company can also experience a reduction in the level of control they have over a business. Read More: Marginal Cost: Definition, Formula, Examples, And More Why Is A Holding Company Important? Having a holding company gives the parent business greater control of its smaller investments. According to the Corporate Finance Institute, “It gives the holding company owner a controlling interest in another without having to invest much. When the parent company purchases 51% or more of the subsidiary, it automatically gains control of the acquired firm. By not purchasing 100% of each subsidiary, a small business owner gains control of multiple entities using a very small investment.” In addition to that, if a particular holding company has control over different small subsidiaries, each of the subsidiaries can be considered a legal entity. It implies that if one subsidiary faces a lawsuit (for whatever reasons), the plaintiffs do not have the right to claim the assets of other subsidiaries in the holding company. Apart from that, if the subsidiary that is under lawsuit acts independently, then no one can hold the parent company responsible. This is how the parent company can save its assets from lawsuits by creating a holding company. Other than strategic decisions and monitoring the performance of the subsidiaries, a holding company cannot get involved in the activities of its subsidiaries. This means that the management of the subsidiary retains its roles and continues to conduct business as usual. How Does A Holding Company Work? According to Indeed.com, “A holding company is a corporation that doesn't run a particular business or participate in the daily operations of a business. Holding companies hold or own investments such as private businesses, stocks, bonds, mutual funds, real estate, gold, patents, and copyrights. Holding companies are parent corporations that maintain the oversight capabilities of companies that they own.” Due to being parent organizations, holding companies can oversee all the management decisions of their subsidiaries, as well as have control of the policies inside. The sole purpose is to have control over other companies. Apart from that, holding companies can also get ownership of properties like real estate, stocks, trademarks, patents, and more. Holding companies have this kind of structure, as it serves to limit the financial and legal liability exposure of itself (and also of its subsidiaries). It also has the power to depress the overall tax liability of a corporation. They can do this by strategically basing certain parts of their business in those areas where there are lower tax jurisdictions. What Are The Pros And Cons Of A Holding Company? The following are the major pros and cons of having a holding company: Pros Of A Holding Company Here are the major pros of holding companies that you will benefit from: Holding companies can oversee the assets of the business and make decisions related to it. They can make strategic decisions and monitor business performance. These companies enjoy the benefit of protection from the losses of their subsidiaries. These companies enjoy the benefit of protection from lawsuits against a subsidiary. It is easy to create or change a holding company. Cons Of A Holding Company Here are a few cons of holding companies that you must be aware of: Along with a subsidiary, the holding company can also experience capital loss and a decline in net worth. It is difficult to find an accurate financial health of the holding company. Unethical directors might hide their losses by moving debt among their subsidiaries. Holding companies can also force or exploit their subsidiaries to make decisions. Read More: Inventory Turnover Ratio: Definition, Formula, Working, And More Final Thoughts What is a holding company? - Hope this article was helpful for you in getting an idea of how holding companies operate. A holding company is a financial organization that owns a controlling interest in other companies. The holding company oversees the assets of the business, while the parent company manages the daily core operations of the business. Holding companies have protection from losses that their subsidiaries make. Hence, if a subsidiary goes bankrupt, the holding company is not responsible. Do you have any more information to add regarding holding companies? Share your information and ideas with us in the comments section below. Read Also: Trial Balance: Definition, Working, Importance, And More What Is Net Operating Income? How To Calculate NOI? What Is The Leverage Ratio And How to Calculate It?

How To Buy An LLC? – Steps To Follow

LLC stands for Limited Liability Company. It can be daunting for an entrepreneur to start an LLC from scratch. A good alternative to that is purchasing an already existing limited liability company. However, before you buy an LLC, you will need to consider a variety of factors, including careful research on the LLC, as well as future costs of running the LLC. Apart from that, you will also need to be fully aware of all written agreements. In this article, you will learn about how to buy a limited liability company (LLC). However, before that, we will discuss what a limited liability company is and how it works. Apart from that, we will share with you some essential steps that you need to follow to buy a limited liability company that will be profitable as well as successful. Hence, to learn more about buying an LLC, read on through to the end of the article. What Is A Limited Liability Company (LLC)? According to the Forbes Advisor, “A limited liability company, or LLC, is a type of legal entity that U.S. business owners can select for the operation of their enterprise. Creating an LLC protects an individual’s or group’s personal assets in case of legal trouble or bankruptcy. It also allows for flexible taxation options, as not all businesses operate in the same way. Some may elect for taxation as a sole proprietorship, but others may be taxed as a corporation.” However, before you purchase an LLC, consider a tax advisor to determine whether it is a good option for your case or not. One of the best things about a limited liability company (LLC) is that it can offer you protection and other perks. Basically, buying an LLC will allow you to realize your entrepreneurial dreams without having to start from scratch. Check Out: LLC vs Sole Proprietorship How Does A Limited Liability Company Work? According to Investopedia, “Limited liability companies are hybrid entities that combine the characteristics of a corporation with those of a partnership or sole proprietorship. While the limited liability feature is similar to that of a corporation, the availability of flow-through taxation to the members of an LLC is a feature of a partnership rather than an LLC.” Basically, as an owner of an LLC, you will stay away from the business liability. If the company is in debt, the debtors will not pursue you, in this case, for the repayment of the company’s debts. An LLC is permitted to operate under state laws in the United States. Hence, the regulations that govern LLCs vary from state to state. The owners of an LLC are called members. In some states, there is no restriction on ownership - which means that anyone can be a member of the LLC. However, some business entities cannot form LLCs - mostly, banks and insurance companies fall under this category. To form an LLC, you will need to file articles of organization with the Office of the Secretary of the State you are in. Furthermore, it is easier to set up an LLC than a corporation, and comparatively, an LLC provides more flexibility and protection to investors. How To Buy An LLC? - A Few Steps To Follow According to ContractsCounsel.com, “A limited liability company offers many characteristics of both a corporation and a general partnership or sole proprietorship. The structure of an LLC is such that the company is responsible for most debts or losses. At the same time, the owners reap the benefits of forming a partnership. This is done through the articles of organization and is vital for purchasing an already existing LLC.” Step 1: Find The Right Business To Buy Find a business that is up for sale. Since it is not easy, try to create a network. Also, communicate with your local chamber of commerce or a trade group for your industry. Step 2: Start Your Negotiations This goes without saying. In this case, be sure who you are dealing with or someone who has authorization to negotiate on your behalf. Make sure to prepare the confidentiality agreement. Step 3: Do All The Necessary Task Basically, you will thoroughly review the business here. The following are the things that fall under this step: Home inspection Title report containing details of the financial condition. The operations of the business, and many more. Step 4: Agree On The Memorandum Of Understanding The Memorandum of Understanding (MoU) consists of all the things that are agreed upon by the owners of the business. Outline whether you are buying the whole LLC or some of its assets. You can also outline what is included in the purchase and what is not. The MoU also consists of preliminary price and payment terms. Step 5: Draft A Purchase Agreement And Similar Documents Once you have completed all the necessary tasks and due diligence, you will need to draft a purchase agreement for the LLC. It is a formal legal document that contains information about everything related to the business, including the purchase, purchase price, remedies, etc. Make sure to have other related agreements ready as well. Step 6: Notify Your State Once you have purchased an LLC, as well as its assets, you will need to notify the state where the LLC is located about the change in ownership of the business. Also, provide information to the state about the registered agent if you have changed the registered agent of the LLC. Wrapping Up Hope this article was helpful for you in getting a better understanding of how to buy an LLC. One of the biggest disadvantages of an LLC is that it is not easy to expand. However, LLCs are easy to run and maintain, provided the taxation system is different. If you run a business, you must have a business plan. If you are looking to limit your personal liability in the business, then only you will need to go for an LLC. The LLC system is a better option if you want to protect yourself from the liabilities of the business. Do you have any more info to add regarding LLCs? Share your ideas and opinions with us in the comments below. Global Business News: Click Here For The Latest Headlines!! How To Become A Strategy Consultant? Roles & Responsibilities What Is Strategy Consulting? – Career, Importance, And Scope How Digital Marketing Consultant Can Help Your Business In 2023?

Everything Any Entrepreneur Needs To Know Before Starting A Business

Are you considering launching a business? Here's what you should know. Although no two businesses are exactly alike, there are a few standard processes that entrepreneurs and aspiring business owners must follow before starting a new company. When launching a business, it's crucial to comprehend and manage challenges relating to legal, financial, sales and marketing, intellectual property protection, liability protection, human resources, and other sectors. Let's dive in to look at some critical things you should know before starting a business. The Top 9 Things to Do Before Starting a Business Figure out your business goals and objectives When starting a business, it is essential to determine your business goals and objectives. What do you hope to achieve? What are your specific goals? Your goals should be attainable and measurable, such as increasing revenue by a certain percentage or expanding your customer base. Once you have a clear grasp of your goals and objectives, you can start developing a plan to achieve them. Research your industry and competitors When starting a new business, it's ideal to research and understand your industry and competitors. What are the trends in your industry? Who are the major players? What challenges are you likely to face? You should also be aware of your competitors. What do they provide that you do not? What are their advantages and disadvantages? How will you set yourself apart from them? Research is essential for a successful business, so do your research before launching your venture. Create a business plan and financial projections Creating a business plan and financial projections is critical for any new business. This process can help you outline your business goals and strategies, as well as determine how much money you may need to get your business off the ground. Making a business plan often demonstrates sincere dedication but requires potential business owners to respond to critical and possibly tough questions from the start of the development process. For example, potential investors may request a copy of your business plan to borrow money fast. They may also need a detailed description of your prospective business idea, your level of industry knowledge and understanding of the possibility, the necessary funding, and the potential rewards. Creating a business plan and financial projections may appear daunting, but remember that it is a process. You can significantly increase your chances of success by taking the time to plan out your business and its finances. Choose a legal structure Choosing the right legal structure for your company from the start is critical, especially since changes can take time to implement. Considering each type of legal entity has its unique criteria and limitations, only certain types of corporations may be appropriate for your specific business needs. If you need help, a corporate lawyer or an experienced business accountant can provide prompt and precise guidance for establishing the proper legal framework for your planned firm. Obtain business licences and permits When starting a business, you must obtain various licences and permits. The type of licences and permits you need will depend on the type of business you are creating. You will likely need a business licence, a tax ID number, and a zoning permit, among other things. It is essential to research what licences and permits you need and start the application process as soon as possible. Delays in obtaining the necessary licences and permits can cause problems for your business down the road. Choose a company name and register it with the state Now that you have a great business idea, it's time to choose a company name and register it with the state. This is a crucial step, as it will legally establish your business. So ensure you do your research and choose a name that is available and meets all of the state's requirements. Create a brand and marketing strategy Creating a brand and marketing strategy can take time and effort. You may want to ensure that you’re reaching your target audience and that your brand is recognizable and memorable. There are a few things to remember when creating your brand and marketing strategy. -First, you need to determine your target audience. Who are you trying to reach with your product or service? Once you know your target audience, you can start to create messaging and marketing materials that will resonate with them.-Second, make sure your brand is recognizable and memorable. Your brand should be easily recognizable across all marketing channels, from your website to your social media profiles to your ads. Brand visibility can help people remember your name and what you offer.-Finally, maintain consistency in your branding and marketing across all channels, and keep your marketing campaigns up to date. This will help you keep your brand in front of your target audience and achieve your business objectives. Invest in good quality equipment and supplies. When starting a business, investing in good-quality equipment and supplies is important. This will help ensure that your company has the best chance of success. Quality equipment and supplies can be a bit more expensive, but they may last longer and perform better. Get professional help and advice. When getting help and advice for your business, it's essential to get professional help. This means finding a qualified and experienced business advisor or consultant who can help you with everything from starting your business to growing and expanding it. There are many benefits to working with a professional business advisor, including getting access to their wealth of knowledge and experience, getting help with specific tasks or challenges, and getting an objective perspective on your business. Starting a business can be a lot of work, but it can also be fun. Just ensure you're prepared for everything that comes your way. Consider these tips for entrepreneurial success! Additionals: Tips to Update Your Manufacturing Business through CNC Machines What Is an Operating Agreement: Does Your Business Need One? Understanding How VPS Hosting Can Help You Grow Your Online Business

Which Entrepreneur Made Tractors Before Entering The Sports Car Business?

Do you want to hear an exciting story of a tractor maker becoming a sports car business owner? It can help you understand that innovation is no one personal property but a talent you need to showcase to the world. There are several incidents and inspiring stories in the business world that you would love to hear. However, these are not just stories rather real-life events that need your attention to read patiently at your end. There are different types of marketing but Lamborghini does not need any one of them. And while we are talking about legends who made history, how can we not mention the GT7 Legend? Don’t forget to check it out as well! Moving on, I will share the most inspiring story of an entrepreneur who has to make things happen in his favor. Starting from zero, he has become a hero in his journey of life. Which Entrepreneur Made Tractors Before Entering The Sports Car Business? Ferrucio Lamborgini made the tractors before he pondered his way to the sports car business. In my article, you will get the answer to which entrepreneur made tractors before entering the sports car business. The real-life story of this entrepreneur is quite exciting and impressive for many upcoming generations of the world aspiring to become the next generation of entrepreneurs. So build up your data that can work well in your favor. The Roots Ferruccio Lamborghini Ferrucio Lamborgini was born in 1916 at the time of world war 1. He is among one of the most eminent personalities of the world who have created wonders and magic in his lifetime. You cannot just explain his stories only using mere words; instead, you must understand the mentality to achieve your goals. His parents were viticulturists, and they have a firm where they can quickly free the grapes and the wine. So today, the world knows about Lamborghini and high-end sports cars all over the world. So in Laborgini’s life, the family business has played a very crucial role. Let’s dig deeper into the Story to get a better understanding of it. He grew up under a farming lifestyle. More importantly, as agricultural machinery. He developed a strong passion and enthusiasm. It has been Fratelli Taddia Institute near Bologna where Lamborghini has completed his study on mechanics. Which Entrepreneur made tractors before starting the sports car business? Will no longer be a matter of doubt to you. During his studies, Lamborghini worked as an intern in the workshop. Things have changed rapidly after world war II as Lamborghini ended up getting a job in the Italian Royal Airforce as a mechanic in 1943. Which entrepreneur made tractors before entering the sports car business? After the rigorous 4 years of conflict, Italians have decided that they do not want to fight anymore. When the British took control of the Rhodes, then Lamborghini was captured by the British Army and he was given the task to work on the automobiles. After that incident, he had returned to Italy. In his first attempt, he started producing and selling the tractors. After that soon other ventures followed a lot. It includes the design, manufacture of the air condition of the heating system. After he received success in his life,e he began buying luxurious cars for himself. At this point in time, he had driven a Ferrari For the First time. He was known as a great mechanic and was also said to be a bad driver. A Journey Towards Glory: First Sports Car Of Ferruccio Lamborghini Do you want to witness the journey of Ferruccio Lamborghini's first sports cat that has created a history in the automobile industry? If yes, then do not leave my article in a mid-way to the interesting real-life story of this man. After the end of the devastating Second world war, he had opened a carport in the Pieve di Cento. The most interesting part of his life story now begins from here when his first attractive sports car took part in 1948's Mile Miglea open this was an open street car racing championship. It was a simple vehicle but Lamborghini has turned this two-seater simple car in a 750cc racing car. Unfortunately, he had smashed the car in the accident on the sidewall of the street side hotel and lost the competition. Still, it paves the way for the new era of sports cars by holding the hands of the best car maker. In 1963, he has designed his first sports car Lamborghini 350 GTV. Life-Changing Incident Of Lamborghini & Birth Of Lamborghini Sports Car Lamborghini has owned the 250GT Ferrari where he has observed that there are numerous issues regarding the technicalities associated with this car. He reported this fact to Enzo Ferrari, the owner of Ferrari Sportscar. Thus, two exotic car makers have disputes among them that made Lamborghini bravely decide to start their own auto company. Lamborghini Started His Journey As A tractor Maker Lamborghini's first tractor was built on the market in 1948 and was named Carioca. He decided to make the tractors cheap and sell them cheap; on the market. The best things about his tractors were they were small and powerful. There are very few businesses that make more profit in a short time span like Lamborghini. He could sell his tractor at a reasonable price as the mechanical parts are easily affordable and accessible. Due to its cost-effectiveness, Lamborghini stood out in the market. This is one of the most outstanding, achievements of this person on whom you can make your bet in the right direction. It was not just a dream car of many car lovers of the world, but an iconic legacy that carmakers will remember in the upcoming decades. However, the journey was not that simple as it sounds, as there were many turmoils in the pathway. Journey Of The Sports Car Lamborghini Armed with full confidence, Lamborghini has started manufacturing the Lamborghini car after being motivated to produce the best sports car of the century. He has begun creating the best sports car of the century to make it the best one for all the sports car lovers of the world. His car was named, wronged after the bulls. One of the most exciting facts about Lamborghini is that his business quickly took off in a short period. He has never advertised his sports car in the market for its promotion, but still, the performance and style of the car have attracted many buyers towards it. People have started buying this car with so much enthusiasm that this car has become iconic in nature within a short time span. Volkswagen, in the late 1990s, purchased this car. It is one of the best Sports cars to have with you right now. This story of the legendary car maker is quite inspiring to many new generation car makers of the world. Final Take Away Hence, from now on, you may not have the confusion of which entrepreneur made tractors before entering the sports car business? Lamborghini is not just a sports car but a well-dreamt legacy that no car maker of the world could ever forget in his lifetime. Proper planning can make things easier and effective for your business to enjoy this place that can work well in each aspect. If you have any opinions, anything more than this, I have shared with you. Feel free to communicate with us. Read Also: Why Create A Powerful Business Continuity Plan? What Is Network Marketing And How To Do It In 2021 How To Start A Business In 2021 – Best Business Strategies

A Brief Guide To Business Integrated Planning

What business Integrated Planning (IBP) Does