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Process-Enabled Technology: Driving Maximum Benefit from Your S&OP Initiative

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Conventional wisdom says that the sales and operations planning (S&OP) process should be completely defined before technology is implemented. This approach has been advocated by both process …

Conventional wisdom says that the sales and operations planning (S&OP) process should be completely defined before technology is implemented. This approach has been advocated by both process consultants as well as ERP and APS technology providers. The real reason for this is that these tools are not purpose-built for S&OP and lack the flexibility to adapt rapidly to business processes. Thus, companies have historically had to settle with a serial approach to process and technology.

For more information about S&OP please visit: http://www.steelwedge.com/solutions/

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  • 1. PROCESS-ENABLED TECHNOLOGY DATA SHEET Process-Enabled Technology: Driving Maximum Benefit from Your S&OP Initiative Page 1 of 2 | © 2012 Steelwedge Software, Inc. All rights reserved. – info@steelwedge.com – 925.460.1700 ¹ Source: Technology Strategies for Integrated Business Planning, June 2006, Author: Nari Viswanathan Conventional wisdom says that the sales and operations planning (S&OP) process should be completely defined before technology is implemented. This approach has been advocated by both process consultants as well as ERP and APS technology providers. The real reason for this is that these tools are not purpose-built for S&OP and lack the flexibility to adapt rapidly to business processes. Thus, companies have historically had to settle with a serial approach to process and technology. Steelwedge can provide the best of both worlds. We do not recommend months of S&OP process deployment before beginning the delivery phase of the tool. In our experience, this slows S&OP success because process participants will require technology to support their new planning responsibilities. We DO however recommend a hybrid approach where we (lead by a Steelwedge change management expert) drive S&OP process adoption for the first 3-4 months of design / delivery supported by manual templates ( i.e, Steelwedge Compass Express™). This allows your team to enjoy the immediate benefits of a technology-enabled S&OP process. In other words, our flexible platform and hybrid deployment approach provides you with the unique ability to introduce process AND technology in parallel. Seventy-eight percent (78%) of companies, according to research by Aberdeen Group¹, report that technology is either critical or very important for their S&OP process. There are several important reasons why technology plays a critical role in helping companies achieve better S&OP results and move toward an integrated business planning (IBP) process. Why is Technology Needed to Enable Processes, Especially for S&OP? Data management. Today’s organizations often have myriad sources of data colored by many different perspectives: sales, customers, marketing, suppliers, manufacturing, logistics, and finance. Because this data tends to be present within disparate systems and are complex in nature, data management and integration capabilities are needed to ensure that data inputs are timely, complete, and are incorporated into the S&OP plan in an accurate manner (e.g., adjustments are made for differing units of measure, customer and item master inconsistencies, variable time horizons, and so on). Multi-dimensional goals and views. S&OP places the spotlight on different goals – revenues, margins, working capital, forecast accuracy, supply/demand match. Organizations need to look at the data in different ways in terms of aggregation as well as units. For instance, finance and sales typically look at the product family level and in dollar unit sales and manufacturing looks at unit level and end item SKU level. Creating multi-dimensional views of the plan that also support what-if analysis is something beyond the capacity of a spreadsheet process. More dynamic business processes. Faster and more frequent S&OP cycles are required to keep pace with shorter product life cycles, compressed order lead time requirements, and more dynamic demand. Technology automates these processes and decreases the time that S&OP planners spend on manual operations versus doing more productive work. Most importantly, technology enables the ability to rapidly react when real-life scenarios unfold in real-time like supply shortages, plant breakdowns, etc. The Traditional Approach Process Technology Steelwedge Approach Process Technology Reduced time to value
  • 2. Steelwedge Software, Inc. Steelwedge integrated sales, operations and finance planning solutions provide the "shock absorbers" to recognize, recalibrate and respond in a volatile environment. Business agility starts with Steelwedge for a clear line of sight from plan to performance to profit. For additional information, please email us: info@steelwedge.com. Page 2 of 2 | © 2012 Steelwedge Software, Inc. All rights reserved. – info@steelwedge.com – 925.460.1700 Consultants like Oliver Wight had to develop a tool of their own because of the same reason. The problem is that their tool is not enterprise ready and is a stop gap solution. "Leave behind" tools that consultants like Oliver Wight, IBM Global Services, etc. have developed are not the answer since the work that is done for these apps cannot be reused as an enterprise solution. Steelwedge provides the ideal mix of enterprise ready tools as well as process flexibility to do iterative process automation. Any process change follows a “Form, Storm, Norm, Perform” pattern as the transition away from current process progresses. This approach minimizes the storming and builds broader support for changes. This approach honors the interconnected nature of the tools and processes while utilizing scarce resources effectively. The Steelwedge solution enables process change, helps manage the volume of change and optimizes resource utilization. The end goal is better business performance through better planning. Stakeholders realize the maximum benefit sooner while minimizing the pain associated with the change. More decision parameters. Integrated business planning (IBPP which cannot be tackled by manual technology. Some critical decision parameters (e.g., overall margin, product family level margins, budget (financial plan), inventory, supply capacity, demand accuracy, service level requirements, etc.) are often multi-dimensional and involve attributes that may be different at different levels of aggregation. For example, demand accuracy at a product family level may be measured differently than the demand accuracy at a SKU level. These require support from technology to not only model but also to manage and monitor. PROCESS-ENABLED TECHNOLOGY DATA SHEET