What are the top priorities for CFOs and finance leaders in 2023? Find out in…
When looking at modern fashion & luxury retail complexities, robust integrated planning and analytics are needed for retailers to keep ahead of the curve. The rise of web-based shopping and the shifting habits and concerns (such as issues around sustainability) of its many consumers leaves the industry more competitive than ever before. Add the impact of the COVID-19 pandemic, which, for many businesses, turned bricks and mortar retail on its head, and these uncertainties begin to create a significant challenge.
Data is the key to overcoming an uncertain period and defining a future-proof foundation to take retailers forward. However, we still see a reliance on legacy ways of working, such as Excel-led planning and data stored in disparate systems with little-to-no reliable automation and integration within the industry. There is no place for a siloed approach to planning. Retailers must adapt and react to changes instantly – spreadsheets and disparate tools and systems do not allow for this. Instead, an integrated approach to business planning is essential.
What is truly meant by Integrated Business Planning (IBP), however? For many specialized decision-making software vendors, IBP is a buzzword that alludes to having solutions that cover all the possible planning domains. While this has elements of truth around it, the real meaning of IBP goes a step further.
A best practice IBP approach incorporates financial and operational data from across the organization. It enables companies to maximize their output by linking strategic plans with sales, operations, and finance to create greater visibility of the relationships that link resources, processes, and results. In turn, this delivers one set of reliable data, a single version of the truth, which cannot be contradicted elsewhere.
IBP, then, is the foundation for excellent planning and analysis, a foot on the accelerator to realizing a digital transformation journey (so to speak).
Imagine the retail business as a complex machine with lots of moving parts. Right now, the machine is working overtime to try and keep up with all the new inputs (i.e. changes to the market, changes to consumer habits, unprecedented external factors, the rise of the web, and so on). Its efficiency is compromised; it needs a new upgrade to handle everything.
Enter Integrated Business Planning, a five-sided cog that fits perfectly into the retail machine. Each spoke of the cog represents a specific element of integration – each side crucial to making the cog turn and power the machine.
Only when these five integrations are in place can organizations say the metaphorical machine is operating at its best. A unification across strategy, finance, and operations enable C-level executives to federate into the planning process. Top-level goals and targets cascade down to the rest of the company’s operational teams in a fully transparent platform to ensure greater alignment between teams and the C-Level while providing the insight the business needs to increase performance and revenue.
The one thing for sure is data is the key to the future success of retail organizations. Markets will undoubtedly continue to be unsettled, so clinging to spreadsheets and legacy systems across multiple platforms will prove a hindrance. Digital transformation is, quite simply, necessary to bring organizations up to the standard demanded of retailers right now. Data must lead this transformation, just as it will lead the insights to plan and analyze the decision-making processes in place and/or to be put in place.
To fully embrace this journey, retailers must select the right technology to inherently deliver the “real” IBP approach. After all, with the proper adoption, it becomes possible to plan for every eventuality and react rapidly to fluctuating conditions – an essential part of driving performance in modern retail.
After an extremely turbulent period in the retail industry, and with ongoing uncertainty over what “normal” is going to look like, fashion and luxury retailers will continue to face disruption for the foreseeable future. Download this eBook to get practical advice on how your retail organization can plan for the unpredictable and evolve to meet the needs of tomorrow’s consumers.
In this eBook, get practical advice on how your retail organization can plan for the unpredictable and evolve to meet the needs of tomorrow's consumers.