AMR (now Gartner) defined 4 stages of S&OP transformation: 1: Reacting, 2: Anticipating, 3: Collaborating, 4: Orchestrating.
They report that many companies get stuck in stage 2 because it is stage 3 where they really need to go through an organizational transformation. As a vendor we need to ensure that we have the capabilities to support this transformation and take them on to stage 4. What I find unfortunate, is that companies will design processes without first getting an understanding of the business process transformation enabled by the technology available to them.
Many will try to take their existing process, which was supported by Excel and a myriad other tools and manual processes, and try to duplicate it in whatever technology system they select to employ. The consequence is often a great deal of customization – cost and time – with, more often than not, little added benefit, and in fact, probably less benefit than could have been achieved by deploying the standard service and changing processes to accommodate it.
I realize that this is a very vendor-centric perspective, but it does have merit. (And despite the fact that we are a vendor with this perspective, we too have fallen victim to having done this when deploying some technology solutions – it’s an easy thing to do as it is natural to think that the way you do things is the only and best way.) Without a doubt, applications can always be improved, but the one-sided perspective of designing the process without consideration of the technology used to support the process has both short term cost consequence – heavy customization – and long term transformational risk – doing it like we always did.
Current S&OP processes, especially those advocated by some of the traditionalists, were designed when Excel was a novelty, when companies manufactured most of their own product, when China was “very far away”, and when the internet was a military weapon designed for DARPA. It took a month to collect the data let alone analyze it.
Why can’t an S&OP cycle be run in less than a week? Why can’t S&OP be a continuous process? Anyway, enough of my sermonizing. Let me ask, do you agree?