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03 Aug Why IBP Is Hard to Sell (and Buy)

(By Mike Raftery)

I can see it now, and I totally get it.  In order to build an application as large and complex as SAP’s Integrated Business Planning solution, you need to divide and conquer.  There are too many moving parts and the timelines are too short and you can’t possibly deliver the entire thing at once.  But this modular fashion makes it difficult to sell, and to buy.  Here’s why:

Integrated Processes

As soon as you spend any time with the IBP application, you realize that the total platform is more than the sum of its parts.  You can’t generate an inventory plan without seeing its impact on the supply chain.  Demand is limited if you don’t see its impact on supply.  In practice, users will never notice the boundaries between the modules.  There will merely be questions and answers, information and analysis.

The speed and integration of the application will allow for a seamless process across the supply chain.  Capacity issues will create inventory problems, inventory proposals will require storage analysis and demand shifts will need a supply simulation.  These processes will become just the way you run a supply chain, and nobody will care what module you are in when you’re running it.  So trying to buy IBP in the modular fashion flies in the face of the very way it was designed to run as a process: seamlessly.

Integrated Technology

The secret sauce behind Integrated Business Planning will be the single planning area.  The walls within APO disappear with a single planning area.  No more forecast release from DP to SNP.  Finally, a customer-level demand signal in the supply planning process.  The need for a batch job goes away and everyone sees the same picture at the same time.

This integration is at the heart, and in the title, of IBP.  When you try to buy the application as a modularized solution, it takes away the very thing that makes it special.  With a single planning area and a single plugin for excel, how can you possibly segment the functionality effectively?

Integrated Licensing

Buying each module in IBP as an a la carte solution truly cheapens the entire platform as a whole.  It prevents you from developing as time goes on and is a disincentive from truly utilizing the application as it is intended.  Customers should be using it as one whole, and it should be sold as one.

APO is offered, the majority of the time, as the entire suite.  Many of the customers who bought APO for demand planning eventually used it for supply, and vice versa.  It made the application versatile and allowed it to grow as the customer grew.  It’s the same thing with IBP.  Even if the client has a specific gap in their portfolio and IBP fits that gap, the true value of IBP is in the overall solution, not just the one-off solutions.  And it should be treated as such.

So, in an ideal world, how would IBP be sold (and bought)?  SAP is finding itself in that really tough position.  I’m sure there were endless PowerPoints, visions and functional specs that enforced a modular structure to the application, but that cannot dictate how the user community will adopt the application.  So in an ideal world, IBP would be repackaged as an integrated planning application, which it has been all along.  It’s used as one solution and in an ideal world, it would be purchased as one solution.  After all, it is a single, fully integrated, fully functional planning solution.  It’s time to treat it as one.

As always, we’d love your thoughts and feedback.  Ping us on Facebook or Twitter, @scmconnections.

For more on this topic, check out our video series: IBP in 30 minutes.  Or download our free Intro to IBP eBook here.  Or, if you’re really curious about IBP, contact us for a one-on-one demo of IBP, at IBP@nullscmconnections.com.