20: The Right Solution for the Wrong Problem?
Recently, a former colleague asked me about S&OP in a much smaller company than the large corporation they used to work at. They've been running S&OP for a year, and now the team is asking: "Are we doing this right?"
Good question.
If you're a small company asking whether your S&OP is sophisticated enough, you're probably asking the wrong question.
Likewise, if you're in a large corporation, asking if your IBP is sophisticated enough - again, you're asking the wrong question.
The right question, irrespective of how big you are, is: "Is our S&OP/IBP solving the problems we actually have?"
You could also measure this by sense-checking if senior management is deeply engaged in it. That's telling too.
The Seduction of Sophistication
Small to medium companies get seduced by the full five-step IBP (Integrated Business Planning) process when what they actually need is something far simpler.
You read the case studies. You attend the conferences where big corporations showcase elaborate planning processes with dedicated teams, advanced analytics, and beautiful dashboards. It looks impressive. And you think: "We should do that too."
But here's the reality: only 15% of organisations report successful S&OP or IBP implementation, and a big reason why is overcomplication. Companies design processes so sophisticated that they collapse under their own weight.
Too often, companies build the right solution for the wrong problem.
What Problem Are You Actually Solving?
Before you design any S&OP process, answer one fundamental question: What problem are you really trying to solve?
In my experience working with companies, small or large, the real problem is usually this: everyone is fighting today's fires instead of looking ahead together.
Sales is scrambling to close this month's deals. Operations is battling this week's supplier issues. Finance is focused on this quarter's numbers. Nobody's looking forward. Nobody's aligned. Everyone's reacting.
If that's your problem, you don't need a sophisticated five-step IBP process. You need something that drags everyone's perspective forward into the future - consistently, monthly, without bureaucracy.
In fact, maybe you don't need a fancy process at all. Maybe all you need is the leaders sitting around a table, hands out of their pockets, making decisions about the future that actually make sense.
Is your S&OP or IBP doing exactly that?
If not, you're solving the wrong problem with the wrong solution.
The key is knowing what "simple" really looks like - and having the discipline to resist the seduction of sophistication.
What does good look like in practice? What are the essential elements that work, what you can safely ignore, and how do you know if you're getting it right? Watch this spot for future insights.
Until then: What fires are consuming your team's attention right now? And who's looking three months ahead? Let alone 12 months ahead.
Want to discuss how to simplify your S&OP or IBP process? Find me at www.planninglab.co.nz
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