Category Archives: Sales Forecasting

Why S&OP Belongs in the Cloud

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sales and operations planning softwareHurricanes 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.

Final Thoughts

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.

 

“Scenario Modeling: What Don’t You Know About Your Business?”

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MetroPCS knows a lot about its 9.5 million customers. With churn of smart phones and handsets shrinking annually, this  leading provider of mobile service is all about predicting demand and understanding each of hundreds of features and functions that will sell the best across a portfolio of phones.  But it wasn’t until MetroPCS worked with Steelwedge that if found out that it’s business was not bound by seasonality.

Check out MetroPCS’ video story on scenario modeling to see how they tapped cloud-based planning solutions from Steelwedge to get a whole new perspective on their business.  Ask yourself:  “what don’t I know about my business?”

 

How S&OP-Ready Are You?

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This week, one of Steelwedge’s flagship customers, Jack Lyon, the VP of Operations at Enterasys, led a thought-provoking webinar discussion on the benefits of S&OP for delivering long term growth. Enterasys has enjoyed an enviable streak of q/q growth for the past 3 years, and credits their S&OP foundation for powering better business agility to support that growth.

Equally interesting was the participant engagement via live polling during the session. Test yourself on these S&OP readiness questions, then see how you fared vs. the replies from more than 300 registrants spanning from CIOs to VPs of Supply Chain, Sales and Marketing, and Demand Planners.

What is your biggest planning challenge?

  1. Global volatility: 14%
  2. Demand visibility: 18%
  3. Supply excess: 3%
  4. Collaborative planning and engagement: 29%
  5. All of the above 35%

At Steelwedge, we’ve seen a big evolution in this answer over the past 10 years alone. What started as a heavy focus on managing supply constraints, has morphed with the increasing dependency on trading partners and suppliers around the globe.  Today, there is a necessary focus on collaboration—not only within the “four walls” of the company, but also including partners and customers.  As business becomes more global, companies lose control and visibility of their supply chains due to outsourcing.  And they are increasingly realizing the need to trade out control for better alignment with their partners in exchange for better visibility.  Connecting the dots gives them what Enterasys has–agility to grow.

How long have you been doing S&OP?

1.     Not doing it: 5%
2.     Considering it: 14%
3.     Less than a year: 24%
4.     Less than 10 years: 40%
5.     More than 10 years: 17%

This identified the Gordian knot of S&OP. A practice that has been around for 30 years, S&OP is still fraught with challenges.  81% of the webinar participants have been practicing S&OP –and nearly 1/5 for have been at it for more than a decade.  But they are still looking for how to optimize the practice.  Part of the challenge is the rapidly—and constantly—changing global marketplace. Part is crossing the chasm in S&OP maturity—like Enterasys did—from operational reacting and demand/supply matching (where Gartner expects the majority of companies are stuck today) to more strategic, proactive and agile collaboration and pre-emptive orchestration of their business.

As Jack said:

“ You can’t do S&OP without a solid strategy and executive level sponsorship/engagement.  But, equally, you can’t do S&OP well without technology to transform the process and provide real-time data to get you to the end game quicker.”

Without a cohesive technology framework to support an evolving S&OP process maturity, companies spin their wheels year after year.

What technology are you using for S&OP?

  1. Nothing: 3%
  2. Spreadsheets: 60%
  3. Existing ERP, SCM and/or CRM: 18%
  4. S&OP specific technology: 11%
  5. All of the above: 8%

This portrays the biggest technology dilemma companies face: what to do with the ubiquitous spreadsheet?  The reality today: both laggards and leading companies use spreadsheets.  And many use them to mainly bridge process gaps left from one-size-fits all technology. But spreadsheets alone don’t do the trick. They are not scalable, forcing S&OP teams to try and aggregate, manually, a view that can take a week or longer—every month—to produce. At the same time, spreadsheets can contain a process unique to a business, that can’t otherwise be leveraged in a centralized S&OP automated tool.

At Steelwedge, one of our design principles is to power agility, and allow for configuration within our integrated, single platform system that can automatically populate, aggregate and harmonize data collected from across the company in dozens of spreadsheets, as well as to extend our platform to create apps right on top so that businesses can fold in the processes unique to them.

As we learned from Enterasys , there is no one size fits all approach to S&OP, nor is there a way to build it and be done. It is a journey. Done well, the journey drives continuous, incremental value that can get and keep your business growing, regardless of the market situation.

Where are you in your planning journey? We’d like to hear from you. dderrico@steelwedge.com

 

It’s Storm Season: Is Your Supply Chain Insurance in Place?

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It took only minutes in 2011 for natural disasters to break apart supply chains that took global companies 30 years to build.

As a result, companies worldwide moved supply chain insurance to the top of their corporate agendas.  Supply chain/business interruption losses are the largest unknown; but for context, already insured companies incurred more than $55 billion in losses in 2011. Today companies can insure carry up to $1 billion in supply chain insurance, ranging in cost from 2% to an undisclosed a la carte pricing determined by presented risk.  Supply Chain insurance went from a “nice to have” to a matter of national criticality, as evidenced by a Presidential directive in January this year, when President Barack Obama directed the Departments of State and Homeland Security to come up with a plan to protect the $14.6 trillion U.S. economy from interruptions in the supply chain. The White House released a National Strategy for Global Supply Chain Security to make recommendations on identifying risks and making commercial infrastructure more resilient.

“We have seen that disruptions to supply chains caused by natural disasters — earthquakes, tsunamis and volcanic eruptions — and from criminal and terrorist networks seeking to exploit the system or use it as a means of attack can adversely impact global economic growth and productivity,” President Obama said in a letter earlier this year.

Are you insured for Storm Season?

As companies swept up and wrung out after the carnage to their bottom lines, it is understandable that they’d want a policy to help pay for the damage. Yet, that is only part of a smart insurance plan.  In fact, just like the medical industry has evolved to drive a heavy pre-emptive care agenda to boost healthier living and mitigate avoidable health issues, so too should businesses explore pre-emptive supply chain insurance.

Indeed, many are.  According to International Data Corporation, a leading technology research firm, the #1 supply chain “solution” for manufacturers is Sales & Operations Planning.  S&OP –a process established nearly 30 years ago –uniquely unites together people and process to better balance supply and demand. Yet,  over the past decade—driven by global business volatility—S&OP has garnered a new level of attention and leverage

Linking Tactical Performance with Executive Sales and Operations Planning (S&OP)

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Too often, I’ve noticed a disconnect between an executive sales and operations planning (S&OP) process and the tactical, execution-level implementation of the plan. For example, the operations staff lacks the executive sponsorship necessary to provide input on process improvements or executive S&OP plans are not communicated to the tactical team for implementation. How do you reconcile S&OP strategy with tactical execution?

We see that companies are either too focused on execution without consideration of strategy or have a disconnected strategic  and execution oriented process. In today’s situation, this is not sufficient.

Ideally, companies should adopt a continuous Sales and Operations planning process that spans the strategic & operational horizon. The company should also integrate the execution process tightly to obtain feedback in both directions and ensure that plans are actually converted into viable action. It may so happen that the execution may vary greatly from the plan, it is fine if that is the case, but only if the reasons are clearly understood. Continue reading →