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07 May IBP FAQ: Questions from ASUG / SAPPHIRE NOW

(By Wade Smith)

It’s been a great week for SCM Connections at the SAPPHIRE NOW/ASUG conference in Orlando, FL.  As we did at the SAPInsider conference, we once again got the opportunity to demonstrate our knowledge of the IBP S&OP module on our live system for a variety of clients and onlookers.  We got some great questions this week and we figured, if some of the attendees had these questions, there are probably others out there asking the same questions.  So here are our answers.

1. Is IBP ready for prime time?

Typical consulting answer: It depends.  From an IT perspective, it is a solid application since it uses components from established SAP applications.  For example, the HANA database, the MS Excel front end, and the HCI data integration platform, etc. are all proven SAP technologies.  The S&OP application in IBP is mature enough to be implemented right now and should provide value quickly.  It was evident from the IBP roadmap session here at Sapphire that there was a lot of functionality in release 6.0 (due later this year) that a client may just want to wait for (e.g. statistical models, full optimization, etc.).  So the full answer here is that it will depend on your individual requirements as to which parts of IBP would make sense to implement in your organization today.

2. Why should I implement IBP now and not just wait?

 One of the interesting revelations from Sapphire is that IBP is just a good platform for unmet business needs – not necessarily supply chain functionality that SAP is developing.  One company is using it strictly as a financial budgeting tool, while another suggested using it for deployment calculations.  With the Excel frontend, a speedy HANA database, and standard data extraction toolset, there is really no limit to what we’ll see companies using this tool for in a few years.  So the sooner you get into the tool and start using it, the more ideas you are going to get to use it.  Also the S&OP functionality is ready to go and leverages the same data that will be needed for demand and supply – so why not learn how to walk before you can run?

3. Does IBP integrate with BPC?

We have no doubt at all that IBP can extract whatever data is necessary from a BPC system.  What is unclear at this time is what data can be integrated back into the BPC system; at the IBP roadmap session, nothing was specifically highlighted.  For a more in depth answer to this question, refer to the SCN blog entry by Arnaud Sergent here (note that SCN requires SAP login).

4. Do we need to buy a separate HANA product (i.e. S/4, BW, etc.) in order to use IBP?

No, the IBP system (cloud version) comes with its own HANA database and does not require additional HANA purchases to be able to utilize IBP functionality.

5. How long does an IBP implementation really take?

Generally, we are recommending that a typical IBP S&OP implementation would be on the order of 3-6 months, depending on the complexity of the requirements.  An important point to keep in mind is that IBP is a cloud application; configuration can start as soon as the initial setup is complete (days) and initial prototypes should be complete in a week or two.

6. Do we need to implement IBP big bang or can we phase the implementation?

There should be no “need” to implement the entire company on IBP at once.  In fact, IBP tends to lend itself to implementation in smaller sections (e.g. division by division, plant by plant, functionality by functionality, etc.), utilizing lessons learned from previous implementations to fine tune the models as it is rolled out.

7. How is SAP pricing IBP?

Some general points of discussion concerning SAP’s IBP pricing strategy:

  • Generally speaking, IBP is a cloud application that utilizes a revenue based yearly subscription model (standard disclaimers apply here…I don’t work for SAP, cannot speak for SAP, etc.).
  • There is a separate yearly subscription required for each module (S&OP, Control Tower, Demand Management, Inventory, Response and Supply Management)
  • There looks to be a revenue “floor” under which the pricing model no longer calculates. That said, I have heard rumors that SAP is looking for a way to address this in the near future but no details have yet been communicated.

8. Do I have to choose between APO and IBP or can both applications live in blissful harmony (much like ECC and APO do today…)?

No, both of these applications can live in relative harmony, although we think that APO is looking at IBP with the green eyed jealousy of a 4 year old with a newborn sibling.  APO is still king of the long term statistical forecast in the SAP landscape (for now) as it has many more statistical models and forecasting bells and whistles to support the forecast generation process. Where IBP really shines is its ability to allow for forecast overrides without the inevitable disaggregation issues or having to use drill down macros that can dim the lights.  Using both of these applications in unison could provide a blended toolset that provides your users the best of both worlds if you are already using APO Demand Planning.  If you have no APO footprint currently, you will again need to look to your individual requirements to understand how IBP can currently meet those requirements as a standalone application.

Thanks to the SAP community for the great questions this week.  To learn more about IBP and what it can do for your organization, email us at ibp@nullscmconnections.com, check out our blogs on IBP, or visit our YouTube channel where we have intro videos on getting started and an inside look at the tool itself.

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