Planning in ERP?

I recently presented at the UKISUG SAP User Group’s Analytics Symposium and demonstrated use of SAP Analytics Cloud (SAC) integrated to provide a comprehensive Order Intake through to Cash Flow budgeting and forecasting capability.

It was great to be there, albeit virtually, however, the time on the day sitting at the virtual stand and chatting to the delegates gave me an opportunity to take stock of just why people who have invested in an ERP system often continue to plan and forecast outside of that system. That was prompted specifically by one question that I had: “We have just spent a significant amount of money on our ByD implementation, we want to get away from spreadsheets for our forecasts, why can’t we just do that in our ERP”.

It’s a great question, and one which has been asked may times before. In this case, the user was nearing the completion of their ByD deployment which was an upgrade from an old Microsoft based ERP. They both, along with many other ERP’s struggle with the same fundamental challenge – and that is that the ERP is actually designed to run the business as usual processes, manage what we are doing today and record faithfully what we have done in a transactional manner.

So here are my top 5 reasons why planning is and will remain a non-ERP process:

1. Planning is not about transactions, it’s about modelling at often aggregated or partially aggregated levels across different business dimensions.

2. It’s about the future where there is uncertainty and many possible outcomes and therefore needs the ability to create and compare scenarios or trace progress between different versions.

3. You almost always need data from different systems – how many organisations have a single ERP spanning all of payroll, logistics, production, sales and CRM etc. giving them a comprehensive operational capability in one place?

4. How do you accommodate a change in the business? Customers who don’t exist yet, products that haven’t been launched, new recruitment and re-organisations, each of which impacts or is impacted by master data that doesn’t yet exist.

5. Planning, be that long range plans, MTPs, budgets, forecasts or any form of forward looking prediction or resource allocation process is just that – a set of processes. They need a system designed to manage and support those processes that incorporates models and various types of data as well as analytical capabilities.

Many people do solve these problems to an extent with offline spreadsheets compromising on visibility, lack of agility and control as well as the hidden costs of maintenance and management of those systems.

If this is an interesting topic for you, or, you wish to find out more or ask any questions, do feel free to drop me a line and I’d be happy to discuss.

About the Author

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Simon Bell

Simon is Sales and Marketing Director at Opal Wave and an expert in Enterprise Performance Management, with a specific focus on strategic alignment, planning, budgeting and forecasting.

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