A successful S&OP ‘marriage’ depends on more than just functionality


Sales & Operations Planning (S&OP) is a tough nut to crack, according to renowned American analyst Lora Cecere of Supply Chain Insights. Recent research reveals disappointing results: only half of all S&OP projects recoup the investment in the business case, only one in three are delivered on time and only one in ten stay within budget. So where does it all go wrong? Cecere blames a lack of understanding among the senior management and difficulties with supplying the necessary data within the deadline.

During my presentation at Supply Chain Media’s S&OP Vendor Day in October 2021, I asked the audience what they considered to be the most important obstacles to S&OP. The main ones were related to executive support and poor change management, followed by the lack of clear organization and processes, available data, employee skills and the business case. And finally, at the very bottom, came the supporting software.

A recent poll on LinkedIn generated 184 responses that painted a similar picture. Management buy-in received half the votes, followed by change management and skills which accounted for 40% between them. The business case and the software received the remaining 10% of the votes.

This seems to make it pretty clear that the S&OP difficulties are due to factors other than the business case and the software, and this is consistent with my own experience. Having worked on around a hundred consultancy assignments with a very wide variety of companies, I agree that the problem does not lie with the business case or the tools; it’s because of the people and the data.

Focus on software functionality

But when companies are searching for an S&OP solution, guess what they focus on in their Request For Proposal (RFP)? That’s right, software functionality! Can the software handle artificial intelligence? If so, what should they do with it? Will the solution be a Software-as-a-Service or an on-premise implementation? Can the software also handle external data? Does the software optimize costs? And so the list goes on. The answer to these questions, by the way, is simple: 90% of the solutions listed in analyst firm Gartner’s Magic Quadrant for S&OP Software have the necessary functionality.

I find RFP processes to be slightly strange. In a sense, they are like arranged marriages. Companies hire experts (consultants) who pick the perfect match for them based on the company profile (size, industry, etc.). Since multiple candidates are competing in the selection process, there is little direct contact between the candidates and the company itself. Instead, the consultant tends to act as the go-between. But when, after a lengthy process, a software vendor is finally matched with the company, it’s not merely about a project. It’s about a partnership for the next five to ten years.

Foundation of trust

So what should the RFP process focus on instead? The focus should be on the questions that really matter, such as how can this partner help us to gain management buy-in, to manage change, to handle the sometimes sensitive discussions about organization and skills, and to clarify the position of demand planning? And if you’re a software vendor who is keen to become the chosen partner, it’s essential to gain insight into the organization and get a sense of the challenges in terms of change management, skills and data quality so that you can outline the right approach.

Whereas a traditional RFP starts from a position of distrust, it should really be based on a foundation of trust. And whereas a traditional RFP is built around questionnaires, ideally it should involve workshops in which solutions are outlined together from a broader perspective. This would give companies a true insight into the prospective partner’s experience, their understanding of the problems and their ability to come up with concrete solutions. Is it important to see the tool? Yes, of course, but only in the right context. The software is not the critical success factor, so it should not be allowed to dominate the selection process!

Bram Desmet, Chief Executive Officer at Solventure and Adjunct Professor Operations & Supply Chain at the Vlerick Leuven Gent Management School.