Hurricanes and tsunamis. Diverse and aggressive competition. Volatile financial markets. Fickle consumers. Uncertainty is clearly the new norm.
Gone are the days of rigid business plans and fine-tuned demand forecasts. Today’s businesses need unprecedented organizational agility to quickly recognize, recalibrate and respond to shifting demand in the face of volatility.
Integrated business planning (IBP) – the next phase of S&OP maturity – aligns sales, operations, finance and other functional areas into a single line of sight, from plan to performance to profit. But how do you achieve the accessibility, collaboration and immediacy needed to act on a unified planning view at the speed of business?
The answer lies in the cloud.
According to Gartner, cloud computing-based solutions, across S&OP and all of supply chain management, are quickly becoming the requirement. Case in point: integrated business planning. IBP requires that executives (and systems) across functional areas – e.g. sales, marketing, operations, supply chain, manufacturing, finance– have the tools and processes to work together. Only a cloud-based platform can quickly deliver on this promise, and here are four reasons why.
#1 Executive Buy-In
IBP requires a connected, collaborative view of S&OP processes across the enterprise to answer pivotal questions, such as the variance between revenue forecast, budget and compensation target by service line; or expected quarterly revenue by business unit. The lynchpin to this connected approach is executive buy-in from all functional areas. Many cloud solutions today allow you to quickly prototype micro applications. This ‘try before you buy’ approach offers a no-risk, hands-on evaluation that can help prove the system’s value and break down resistance to change.
#2 Any Time, Anywhere Access
To truly engage today’s professionals in the process, you need a platform-neutral approach that works on both enterprise and modern mobile platforms, inside and outside of your corporate network. With the cloud, you can leverage existing system investments and easily merge multiple data sources – whether it’s from legacy on-premise ERP, CRM or finance applications or with Software as a Service applications like Salesforce.com – and deliver them on demand to anyone in your organization, anywhere in the world.
#3 S&OP Ecosystem Connectivity
Organizations are dealing with increasing variety and volumes of “big data” coming from internal, partner, customer and social sources. For S&OP, the big data management requirement is exacerbated by the need to look at revenue, product, SKU and component information across a variety of geographies, operating divisions and time horizons, and then roll up that data for review at quarterly, monthly and even weekly increments. This, in turn requires a significant boost in processing power and analytics to make sense of the data for faster decision-making.
Connecting all of this data into planning and understanding how shifts in supply and demand will impact operations calls for scalability and flexibility that traditional on-premise solutions can’t deliver from one platform. With a single IBP platform in the cloud, you ensure a level of always-on elasticity to meet your data demands as they grow. Plus, the cloud’s pay as you go model enables you to scale as your business demands, not as your procurement dictates.
#4 Predictive Analytics
Not only is processing power important for developing actionable plans based on vast amounts of input data, but it’s a critical consideration to allow for contingency planning – a key driver for agility, and the heart of true IBP. Strategic, “what if” scenario modeling enables you to explore a myriad of business scenarios that impact the bottom line. Creating ad-hoc modeling to understand not only supply/demand trade-offs, but also the customer and financial implications of those moves would be cost-prohibitive without the elastic computing power of the cloud.
With the shift away from traditional annual or quarterly calendars, S&OP conversations and technologies need to be different. The cloud provides an ideal foundation for modern business plan decision making, allowing you to sense for signals of change and take a tighter look at interdependencies that impact departmental and corporate processes.