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 ...