|
|
About the Author |
|
by
Glen Margolis
Founder and Chief Executive Officer
Steelwedge
Glen Margolis, the founder and CEO of Steelwedge Software, the leader in cloud-based sales and operations planning (S&OP) solutions. Glen has extensive executive experience leading software, management consulting and manufacturing organizations. His background includes the management of both strategy and systems implementation projects for high technology manufacturers. He has written numerous articles on sales and operations planning, collaboration and performance management, and is frequently quoted by the press.
For more information, please visit
http://www.steelwedge.com.
|
|
Supply Chain Comment
By Glen Margolis, Founder and Chief Executive Officer, Steelwedge
November 29, 2012
|
Why S&OP Belongs in the Cloud
The Cloud Provides an Ideal Foundation for Modern Business Plan Decision Making
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?
Margolis Says: |
 |
| Today's businesses need unprecedented organizational agility to quickly recognize, recalibrate and respond to shifting demand in the face of volatility. |
|
What Do You Say?
|
|
|
|
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. |
|
|
|
Recent Feedback |
As much as IT marketing and VC's want everything including your sock drawer "in the cloud" I beg to diverge.
Our experience is at best the Cloud should be one of 3 to 5 run options for your chosen S&OP code. S&OP is not an application but IS the business and I cannot imagine a firm of any significance and/or their leadership that do not want and need control of the profitability analysis and techniques without queing in a software modification que behind dozens if not hundred of other firms.
So a single software code base available in the following forms seems most logical to a CEO:
1. Hosted dedicated server and code applied to one client.
2. Purchase as software.
3. Dedicated appliance behind customers firewall.
4. Source code availability to make strategic mods.
Running your S&OP in a shared CLOUD code base with a network model is a big an over-complicated way and can create catastrophic failure permutations that are hard to think through all contingincies.
With all that being said, the supply chain execution data from partners, logistics providers, contract manufacturers etc. does seem perfect for "a cloud" as data can be used by many. An S&OP plan is not shared with partners except in pieces and is strategic, confidential and not complicated.
In conclusion the cost to have a dedicated server for YOUR S&OP with your tweaked code based is minimal and a client should at the minimum have the ability to control behind their own firewall. Any customer who puts their critical data and process to make decisions in a form without the ability to mirror or duplicate behind their own firewall is risking a lot if not everything to VC's, offshore developers, security challenges etc. for no real upside and likely a big loss of agility and control.
The best place for the cloud is the execution data that feeds the S&OP plan not the core S&OP process, planning algorithms, plan vs. actual comparison etc.
www.DCRASolutions.com
Jon Kirkegaard
President
DCRA Inc.
Nov, 29 2012
|
I completely agree with your thoughts. To meet the corporate strategy of demand driven enterprises where demand variability leads to increased demand inaccuracies and the solution is, access real demand data across the supply chain and have the agility to react to changes in demand.
S&OP on cloud could be a common platform for all stakeholders to review and improve stakeholder agility to calibrate demand changes. I think the bucket of S&OP review meetings could be reduced from monthly to every fortnight, thus creating S&OP plans with more accurate numbers.
kumprashant@gmail.com
Prashant Kumar
Supply Chain Lead
CSC India
Nov, 30 2012
|
|
|
| |
|
|
|
