Technology Spending Plans
Approximately 40% of companies indicate that they plan to spend more on S&OP technology in 2006 versus 2005, while only 13% say they plan to spend less. Tellingly, companies with best in class order fill rates plan to spend more on S&OP technology than their peers (an average of $250,000). This indicates that the best in class companies see S&OP technology as critical to improving on their already strong corporate performance.

Creating a Roadmap for Integrated Business Planning Technology

Figure 7 shows key technology components for an Integrated Business Planning process.

Most companies have many of the Integrated Business Planning components today, but discover that certain components need to be upgraded to produce better plans and performance (e.g., extended forecasting to enable collaboration). However, it is common for organizations to also identify areas in which the current technology support is missing or requires so much manual effort that brand-new implementations are required. In addition to the individual supporting components, it is critical that the overlying Integrated Business Planning Workbench or S&OP-specific technology contain the data management, role-based support, and what-if analysis capabilities necessary to create an easy to use solution.

Companies should view the path to Integrated Business Planning as an evolution and not something they deploy wholesale. Chapter 4 provides specific recommendations on how to approach this technology enhancement process. Following are the key aspects to look for in each of these technology components, as well as insights into how companies are implementing these technologies to fits into the framework of Integrated Business Planning.

Sales and Revenue Planning
Only 14% of companies indicate that their sales and revenue planning process is adequate. Companies are overcoming this gap by investing in advanced sales and revenue planning technologies. Here are the key characteristics needed for effective sales and revenue planning technology:
• Help to systematically manage on a real-time basis the sales forecast and build the sales plan while capturing assumptions, events, and exceptions.
• Support analysis of the overall corporate objectives of profit margins and revenue.
• Are simple, “no training” tools for sales and visibly increase the forecast accuracy. They heavily leverage Microsoft Excel-based interfaces and email-based workflows to ensure participation by sales. Direct participation by sales in traditional S&OP is dismal and often Supply Chain Operations personnel ‘guess’ what the sales reps really want.
• Fit into the sales pipeline process and bring meaningful market intelligence to the demand collaboration process.
• Provide proactive visibility to sales opportunity mismatches with operational plans. They improve the demand shaping (promotions process) and reduce investment in last-minute incentives and last-minute rush or overtime production to accommodate sales target increases.

A leading data networking and bandwidth management solution company is using such a tool to enable their Sales Revenue Planning process. The company has independent planning processes through various departments: sales created revenue forecasts, finance created revenue targets, and operations performed product forecasts – all different processes usually with different measurements that did not tie together.

Using their S&OP plug-in application solution that enables sales revenue planning, the company creates a consensus forecast that incorporates direct feeds from its sales opportunity pipeline system and balances the bias of operational systems with quantitative and qualitative input from cross-functional teams. According to its director of supply chain, “[The company] gained greater visibility and predictability in their business and a less costly, more effective way of planning”.

The tool has been extended to the company portal, giving users and executives access to current and historical pipeline numbers and forecasting analysis. This has resulted in improved executive visibility and driven efficiencies through the organization.