Headline:

Integrated Business Planning should make cash flow forecasting issues a thing of the past.  But it isn’t!  This article explains why this is and what finance executives can do to fix it.

Introduction:

Six years have passed since my cash flow forecasting (CFF) web chat on CTM file, which can be accessed here.  It described how Integrated Business Planning (IBP) could dramatically improve CFF by embedding it into a single rolling forecast that brings together strategic, financial and operational planning and performance management (P&PM) processes.

In theory, IBP should make CFF issues a thing of the past.  In reality, it isn’t!   CFF remains one of the top challenges for treasurers.  The same is true of related processes like foreign currency exposure and working capital forecasting.  This article makes two key points about why this is and what global manufacturers (GMs) can do about it:

• • • Four capability gaps explain why GOs are not realizing the expected value and benefits expected of IBP
    • Resolving these gaps and improving CFF, requires a more holistic approach to IBP and P&PM processes

Underlying these perspectives is one reality about IBP maturity.  The market continues to view IBP (and P&PM processes and technologies in general) through outdated and siloed lenses.  Especially by financial and operational P&PM software companies, whose solutions often fall short of meeting the needs of GMs.  Appreciating these perspectives starts with an understanding why CFF remains such a challenge for GMs.

The full version of this article can be found here.  It was published on the site of Corporate Treasury Management.  Included in the article were several exhibits, further details about which are available in separate articles, the links to which are provided below:

• • • Exhibit 1: Four Critical Capabilities For Planning, Managing & Governing Performance In Complex Global Manufacturers – View
    • Exhibit 2: Integrated Planning and Performance Management Maturity Model – View
    • Exhibit 3: Characteristics That Should Be Absent From Mature IBP Process – View

Related Articles:

Other articles on this website provide further details about these perspectives, which are summarized below:

• • • What Fully Integrated Planning & Performance Management Processes Look Like – View
      
    • Strategic IBP: Driving Profitable Growth In Complex Global Organizations – View
    • Maximizing IBP Value And Benefits To Finance – View
    • Institutionalizing Integrated Reporting & Thinking Through Mature Planning & Performance Management Processes – View