Author: Bob Allen, Hanna Hamburger and Tyler Roth, The Hackett Group
Sales and operations planning (S&OP) has become a cumbersome and complex business management process for many companies.
This is due to a lack of executive and leadership buy-in or a failure to align and synchronize the relevant business functions, such as sales, marketing, finance, engineering and manufacturing.
Leading companies that have integrated strategic and financial planning with traditional S&OP into integrated business planning (IBP) models are also frustrated by process complexities.
Numerous signs indicate when an organization’s S&OP or IBP processes have become overly complex, including: failure of the process to deliver timely and actionable insights to management; key leaders losing interest in the process; emergence of “shadow” planning processes and tools; and the need for a lot of “muscle” to complete the process each month.
This article looks at what causes process complexity and offers examples of innovative solutions that industry leaders are implementing to reestablish S&OP as an effective, exception-based and value-added planning capability that is successfully integrated with financial planning (i.e., IBP). These strategic solutions generally span four key dimensions: simplification, analytics, automation and data quality.
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