The Annual Operating Plan (AOP) and the Latest Best Estimate (LBE) are two of the most important forecasting processes a biotech or pharma commercial team runs. They are also among the most misunderstood, usually over how the two should work together. I caught up with Amanda Randall, Senior Director, Implementation at J+D Forecasting, to talk about about what goes wrong and why. You can read the full interview, along with our best practice guide here.

• A single source of truth across the long-range plan (LRP), annual operating plan (AOP) and latest best estimate (LBE) is the ideal. How often do you see it in practice, and what does the gap look like?
  Honestly, it’s rarely achieved. Most organizations have multiple forecasts running at the same time – LRP, AOP, LBE, sales targets, demand/supply and others – built by different teams, at different times, for different purposes. The disconnect is almost inevitable.

  The gap usually shows up in a couple of ways. The LRP and AOP often aren’t properly anchored to each other before the year has even started. Then as the year progresses, one of the most common mistakes is allowing the LBE to effectively replace the AOP as the primary reference point – which hides performance gaps rather than addressing them. Getting closer to that single source of truth really comes down to having the right governance and tools in place to support it.

• How hard is it to start planning from strategy rather than financial targets when there’s budget pressure from above?
  It can be really hard and it’s one of the most common tensions we see. The pressure to hit a number often means teams work backwards from the target rather than building up from strategy. The problem is that a plan built that way tends to be fragile – it looks right on paper but lacks the strategic logic to hold up when things change. The organizations that do it well are the ones where leadership actively protects the strategy-first conversation, even when the numbers are uncomfortable.
• Prior-year reviews should measure against the original AOP, not the final LBE. How do you approach that, and what does an LBE comparison miss?
  Measuring against the LBE is comfortable, but it’s not honest. By the time you get to year-end, the LBE has often absorbed all the bad news – so comparing against it just tells you how well you predicted the deterioration, not how well you performed against the original plan. The AOP is the real benchmark because it reflects the commitments made at the start of the year. The LBE comparison misses accountability – it lets teams off the hook for gaps that should have been addressed, not just forecasted.
• What makes teams actually sustain an assumption log rather than let it slide?
  Two things: ownership and relevance. If the assumption log sits in a spreadsheet that no one looks at between cycles, it will die. The teams that keep it alive are the ones that make it a live document – referenced in reviews, updated when things change, and tied directly to the numbers. It also helps when there’s a clear owner, not just a shared responsibility, because shared responsibility usually means no one does it.

The full article covers these themes in depth, alongside practical guidance on reforecast triggers, global-affiliate friction, and the role AI can realistically play in the planning process.

Read the full article here or get in touch to learn how we can support your forecasting processes.