What’s the Difference Between S&OP and IBP – and Why It Matters Now

If you lead a supply chain, finance, or operations team at a mid-sized company, chances are you’ve been running some form of Sales & Operations Planning (S&OP) for years. Maybe you have monthly meetings, a demand forecast, and a supply plan. Maybe you even call it IBP. But is it?

Today, many companies are realizing that while S&OP got them aligned operationally, it doesn’t always get them aligned strategically. That’s where Integrated Business Planning (IBP) comes in.

But let’s be clear: IBP isn’t just a new name for S&OP. It’s a fundamentally different approach that ties planning decisions directly to business goals—across functions, horizons, and performance metrics.

So what’s the real difference? And why is this distinction becoming more important than ever for mid-market companies?

The Short Answer: S&OP Aligns Operations. IBP Aligns the Business.

S&OP was designed to bring together demand and supply in a structured, predictable way. It’s about balancing what customers want with what the business can deliver—typically on a monthly cadence, using historical data and constrained planning.

IBP, on the other hand, connects those operational decisions to financial targets, strategic goals, and enterprise-wide decision-making. It’s cross-functional, forward-looking, and designed to drive business performance—not just supply chain efficiency.

“IBP is not S&OP with a new name. It represents a significant transformation in the way companies plan, govern, and execute.”
— Gartner, “The Road to Integrated Business Planning,” 2023

Why This Shift Matters Now—Especially for Mid-Sized Companies

There was a time when IBP felt like something only Fortune 500s needed—or could afford. But that’s changed. Today’s mid-sized businesses face:

• Longer lead times and unpredictable demand
• Higher cost pressure and tighter capital access
• More executive scrutiny on planning decisions
• Greater need for scenario-based agility

And the systems that support traditional S&OP—often Excel and disconnected planning modules—just can’t deliver the visibility or speed required to respond strategically.

According to McKinsey, companies that moved from S&OP to IBP saw up to:

• 20% improvement in forecast accuracy
• 10–15% reduction in inventory
• 5–10% increase in EBIT

That’s not just planning improvement. That’s business improvement.

Most Companies Aren’t “Doing IBP”—Even If They Think They Are

Many companies believe they’re doing IBP because they have:

• A rolling forecast
• A monthly exec meeting
• Input from multiple departments

But unless you’re:

• Aligning financial targets and strategic plans with operational plans
• Running scenarios tied to P&L impact
• Empowering decisions that cross functional boundaries

…you’re probably still in the S&OP zone. That’s okay. The point isn’t to jump straight into IBP. The point is to understand where you are—and what comes next.

IBP Is a Journey—Not a Switch You Flip

One of the biggest misconceptions about IBP is that it’s a software implementation. In reality, it’s an organizational maturity curve—one that blends people, process, and technology in a way that fits your business.

For mid-sized companies, the path forward is about:

• Getting executive buy-in
• Integrating finance into planning
• Moving beyond Excel
• Focusing on agility over perfection

Conclusion: Know the Difference. And Know What It Means for You.

If you’re running solid S&OP processes today, that’s a strong foundation. But if your business wants to:

• Respond faster
• Align better
• Plan smarter
• Hit financial targets more predictably

…then it may be time to start the journey toward IBP.

In this blog series, we’ll break down what IBP really looks like in practice—and how to take steps toward it without overengineering or overspending.

Because the truth is: IBP isn’t just for the big guys anymore.