What's More Important in Integrated Business Planning (Advanced S&OP) – The People, The Processes, or The Tools?

Written by: Ken Carlson

Based on the graphic above, "The Integration of People, Processes and Technology," most people believe that the deployment of an Integrated Business Planning (Advanced S&OP) project requires equal portions of people, processes, and technology. In fact, what our customers tell us, shown on the right side of the graphic with the large circle indicating people involvement, is what is needed to be successful. Why is this?

Our customers tell us people are the key to success. Energized, process-educated, and focused people make Integrated Business Planning work.

First – there is a need for leadership - a senior manager who is the champion for the Integrated Business Planning project and is in control of the resources (people, budget, etc.). This individual must be committed and engaged.

The next requirement is a team of positive employees and a project coordinator. This team will be charged to work on the individual tasks that make up our Integrated Business Planning process. In all cases, this team will consist of the major process owners and a project coordinator who should be able to manage the process. These people are usually the best and typically the busiest because they have the ability to get things done.

Once we have our team, we need to ensure that they are able to focus on their new responsibilities. The team must set aside time every month to have review meetings and working sessions in order to make decisions that will guide the future direction of the company. If this time is not set aside, other responsibilities of the business will consume all of their time, and this process will become ineffective.

Without the commitment of leadership, the right team, and time to work effectively on the process, success is sure to be limited. No leadership – no commitment. No time – no gain.

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Most companies say they have S&OP in place but, arguably, they are not truly doing S&OP/IBP. Why Is that?

Written by: George Palmatier

Sales and Operations Planning has proven to be a valuable process for virtually all companies that have had the discipline to implement it, as has been validated by numerous independent research studies. Some companies get far more performance benefits than others. These same studies, upon closer inspection, indicate that 70 to 80% of companies that say they have an S&OP process do NOT have participation at the executive level.

Since Sales and Operations Planning is, by definition, a senior management process, I would argue that those companies without executive management participation are not doing Sales and Operations Planning at all. Inevitably we find that they are doing demand/supply balancing in the near term at the detail level and calling it "S&OP." Whereas, this detail demand/supply balancing is necessary and provides benefits to the company, calling it S&OP falsely lulls a company into to believing they are doing S&OP.

Unfortunately, they then miss out on the even greater benefits available to companies that recognize S&OP done well is truly an integrated business planning and management process. We are finding that larger companies are beginning to call a mature S&OP process with active executive participation Integrated Business Planning to clearly differentiate it from the current detailed demand/supply near-term planning processes. These companies with Integrated Business Planning achieve higher levels of performance with less management effort than those without it.

Should you have an independent diagnostic assessment of your current "S&OP" process?

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