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Oliver Wight Blog

HR’s Role in IBP | Part One: Forget Me Not

By Stuart Harman, Partner at Oliver Wight Asia Pacific

1 October 2018

Integrated Business Planning (IBP) aligns strategic and tactical plans each month and allocates the critical resources – people, equipment, inventory, materials, time, and money – to satisfy customers in the most profitable way. Despite IBP’s indispensable capabilities, we still see instances where plans from certain functions in an organisation are being left out. A key example of this is Human Resources (HR).

In this blog series, we will explore why HR is often left out in the cold, how the department can be reintegrated into an organisation’s change process and why HR plays a crucial role in ensuring any business’ long-term success. In the first part, we look at the importance of HR and symptoms when not engaged in an organisation.

HR the Matchmaker
The Human Resources department, alternatively referred to as People Operations, Human Capital or People & Culture can cover a myriad of responsibilities as shown in Figure 1, but the one common thread is people.

IBP’s principle role is deployment of the business strategy. As well as the core IBP plans for product, demand, supply and strategy deployment, there are two other key output plans: financials and, where applicable, inventory. One of the most significant assets in any organisation in delivering strategy and the core plans is people. The best in business recognise that people are the key drivers in any change programme and that success depends on the organisation’s ability to cultivate the right people in the right roles. As such, people plans and the plans for HR-related activities in an organisation are a key ingredient in IBP. This is an area which is often overlooked and disregarding it in any change management program can lead to serious disruptions within the process.

The Danger of Forgetting
The Oliver Wight monthly IBP cycle requires the various functional departments in an organisation to each review their past performance and their future plans. This is so they can develop an integrated view of the plans for Product & Portfolio, Demand, and Supply, and with the resulting financials project over a two-year planning horizon. An effective IBP process reviews and, where necessary, realigns the plans across the entire organisation each month to arrive at an integrated “whole of organisation” plan that will guide the entity to achieve its goals.

Some of the symptoms a business will experience if the HR function is not engaged and involved in IBP include:

1. Incomplete or delayed people plans required to support the operational plans of the organisation
2. Lack of people resource to deliver company-wide and strategic initiatives and projects resulting in delays to deliverables
3. A lack of resource to execute the HR plan e.g. performance appraisals, role descriptions, education and training plan, etc.
4. No visibility of people measures including appraisals done, position descriptions reviewed and updated, absenteeism rates, training plan completion rate, mean lead time for recruitment, etc.

Forget HR, and your business risks getting stuck in a short-term cycle of hindering potential growth or success.

Join us soon for Part Two, in which we’ll discuss how HR fits in to a fruitful IBP process.

This blog was taken from Oliver Wight’s latest whitepaper, People Watching: HR’s Role in Integrated Business Planning, which is available for free download here.