Every organization at one point or other considers implementation of a company wide Sales and Operations Planning (S&OP) initiative as a panacea to treat all its planning inefficiencies. While the vision of such a change management exercise is laudable, what many fail to realize is that this journey should be taken up only after doing a reality check and a readiness assessment. All good things start at home, so forecasting and building an internal consensus around the end vision state by various stakeholders is a preferred approach before taking up this initiative.
No matter how big or small a company is, what industry it is in, or what geographies it caters to, these basic considerations need to be carefully assessed for a successful implementation:
- Justification of business need: This upfront requirement involves an internal fact-finding exercise to determine the driving force. What is the need of the organization? Is it to get quick returns based on some short term tactical planning OR are they open for having capital investments upfront with realizing constant returns over period of time?
- Ownership of the process: S&OP is and should be owned by business. Either it could be owned by an existing business division like Sales & Marketing, Supply Chain OR it could be formed as a new division carved from such departments. While the IT function of the organization can help sustain this process, it can never be the stakeholder or owner of the process.
- Process first, not tool: The detailed process should be laid out agnostic to any tool capability. This could be done by having a cross functional team of business stakeholders and by laying out the end state desired process. Even inside the same organization, the various geographies have diversified business processes because of local needs. So, an upfront validation and sign-off of proposed business process by each geography prior to implementation kick start helps in the long run. This gives a “global” approach to the whole initiative and eases acceptance by end-users, rather than being treated as a headquarter initiative which they have to embrace by force.
- Implementation Strategy: What should be the change management strategy? The answer depends on the organization assessment of change acceptance based on output of Step #1 mentioned above. Should the implementation go A) big-bang across all geographies in one stretch OR B) be piloted out based on sample geographies, then rolled out across entire organization? The later approach of pilot and rollout comes in handy most of the times as it makes sure to validate the solution first before rollout. In some cases, the choice of diverse geographies as a sample pilot helps to test out the extremities of the solution.
- Data Readiness: Gartner has a 5 stage S&OP Maturity model with “React” being the basic stage and “Orchestrate” being the most mature stage. Many implementations never see the light of day of even at the “React” stage, but the maximum numbers fall within the first and fifth stage. One of the most common reasons for these failures is not a bad implementation strategy but because of the data readiness of transactional systems. Good and reliable transactional data is a building block for any successful planning system, let alone S&OP implementation. Bad data adds to the classic example of “garbage in garbage out” concept.
Inspirage already has pre-configured S&OP Solutions which enable companies to deploy an effective S&OP solution or to scale up existing S&OP capabilities. The step by step process coupled with Inspirage’s experience in implementing such solutions successfully over years, helps companies to take out the vagueness around the S&OP initiative. This also helps customers to quickly vet out the solution and realize results. Many customers like to do a pilot first, “crawl-before-walk” approach.
Contact the experts at Inspirage today to learn more about our S&OP solution.
