Assessing S&OP’s Place in the Cloud
As interest in cloud computing grows, so do the number of applications that companies are moving off premises and onto hosted platforms. Sales and operations planning (S&OP) isn't immune to the trend as firms strive to integrate their sales, marketing, finance, operations, supply chain, and manufacturing functions into fine-tuned machines that work well together.
In his recent opinion post, Why S&OP Belongs in the Cloud, Glen Margolis, founder and CEO of business planning solution provider Steelwedge, says the cloud helps companies achieve the organizational agility necessary to "quickly recognize, recalibrate, and respond to shifting demand in the face of volatility." Cloud-based integrated business planning (IBP), Margolis remarks, delivers on this promise because it requires executive buy-in; can be accessed anytime, anywhere; connects data points across the supply chain; and provides predictive (what if?) analytics.
Bryan Ball, vice president and principal analyst, supply chain management, at Aberdeen Group in Boston, expects more companies to move their S&OP applications into the cloud over the next 12-24 months. With cloud adoption currently hovering around 10-15 percent - and with 50 percent of companies currently "considering" hosted options - Ball says total cost of ownership (TCO) will be a driving factor behind the movement.
"At this point it's less about affording the licenses for on-premise software and more about total cost of ownership - and about getting up and running faster in the cloud," says Ball, who expects Microsoft Dynamics ERP users to factor in maintenance, support, and other ongoing costs and responsibilities when integrating S&OP applications.
"In some cases it will make sense to use your ERP's S&OP solution but in others it will be more practical to go to a cloud-based option," says Ball. "We're seeing that across the board right now with all applications. Many times cloud-based, managed solutions are easier to deploy and to start realizing benefits from without having to develop an entirely new, in-house skill set."
Expect to see more firms considering those key issues over the next year as they hone their S&OP processes in the increasingly competitive business environment. "The cloud provides an ideal foundation for modern business plan decision-making, allowing you to sense for signals of change," Margolis states in his post, "and take a tighter look at interdependencies that impact departmental and corporate processes."