You can almost hear a group of employees saying it: “But that’s the way we’ve always done things!” It’s the legacy thinking siren song, but spend any time at all doing a gap analysis on S&OP processes and you’ll see the problems inherent with continuing to use a manual planning system, notably based in Excel spreadsheets.
Even as recently as 2015, 92% of companies were using spreadsheets to manage S&OP. Of those, 29% relied exclusively on spreadsheets and email to document and circulate the data. Excel certainly has had its time in the spotlight but that was before connected, cloud-based planning tools and the increasingly complex and competitive business environment. As the title suggests, a Chief Financial Officer needs to be thinking ahead, to take the business from simply executing tasks in departmental silos to conducting strategic, cross-functional S&OP processes.
Here are some of the reasons CFOs need to lead by example and say goodbye to their spreadsheets and hello to cloud software for S&OP.
Collaboration is easier
Collaborating in real time is one of the major benefits of a cloud-based planning system. Accurate and up-to-date data is available to all those who need access to it, regardless of where they are in the process. Furthermore, rather than waiting for someone to access a spreadsheet and manually manipulate the data with new information, it can be automated, which will allow individuals within the process to make effective use of the new data, in real time.
Errors go down, productivity goes up
Reducing manual processes, like importing and exporting data from other systems, and inputting data and manipulating it with formulas to get the reports required, improves productivity and dramatically reduces the potential for error. Planning efforts from demand to supply are optimized by having the time to actually leverage the data instead of spending all the time inputting or altering it.
Data transparency is readily available
With a reduction in errors and business processes that are sped up, from demand forecasting right through supply and distribution planning, a company can be more agile and more competitive. Automated bi-directional integration with ERP systems is another key driver of improved efficiency and reduced errors.
After all, data resting in silos and individual computers / departments is not useful. Without central control of the data, the result is different spreadsheets with varying numbers residing with several functional groups. With a centralized system, the same data is available for the benefit of all those who touch the S&OP process. This allows for rapid opportunity identification, faster decisions based on facts vs emotion and course corrections when demand and supply don’t sync up.
With all these benefits set against the pitfalls of manual spreadsheets, company CFOs continue to use them. Why? Because change is hard. Learning a new system and new processes is often considered difficult by employees who are fully immersed in their legacy planning methods.
CFOs can lead by example
It’s the role of the C-Suite to set the tone and embrace the change to a centralized S&OP solution that will bring the advantages mentioned above to bear. With their support and guidance, change can be managed to the advantage of all employees involved in the S&OP process.
To learn more about DemandCaster cloud-based S&OP software, watch the replay of our webcast: Move from Reactive to Proactive Planning.
